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CHAPRER 1 Introduction 1

TEXT A Why Study Economics 1

TEXT B What is Economics 6

TEXT C The Uses of Economics 16

CHAPTER 2 Basic Concepts of Economics and Basic Problems of Economy 25

TEXT A Macro and Micro Economics 25

TEXT B The Three Problems of Economic Organization 32

TEXT C Market，Command，and Mixed Economics 37

CHAPTER 3 Markets and Governments in a Modern Economy 45

TEXT A The Market Mechanism 45

TEXT B How a Market Solves the Three Economic Problems 52

TEXT C Who Governs the Market 60

CHAPTER 4 Basic Elements of Supply and Demand 70

TEXT A Introduction to Supply and Demand 70

TEXT B Demand 75

TEXT C Supply 83

CHAPTER 5 Labor，Land，and Capital 93

TEXT A Labor 93

TEXT B Land，Natural Resources，and Rent 100

TEXT C Capital 107

CHAPTER 6 Business Organization 114

TEXT A The Nature of the Firm 114

TEXT B Big，Small，and Infinitesimal Businesses 120

TEXT C Features of a Modern Corporation and Advatages and Disadvantages of Corporations 126

CHAPTER 7 Major Concepts in Macro Economics 131

TEXT A GNP，NNP and GDP 131

TEXT B Consumption，Income，and Saving 137

TEXT C Investment and Capital Formation 147

CHAPTER 8 Money 154

TEXT A The Essence of Money 154

TEXT B Interest Rates 162

TEXT C Banking and the Supply of Money 169

CHAPTER 9 The Federal Reserve System 178

TEXT A Structure of the Federal Reserve 178

TEXT B The Fed's Operations 187

TEXT C International Reserve Movements and Other Activities 198

CHAPTER 10 Business Cycles and Their Effects to the Economy 208

TEXT A Business Cycles 208

TEXT B Unemployment 218

TEXT C Inflation 227

CHAPTER 11 Fiscal Policy，Budget，Deficits，and the Government Debt 241

TEXT A Fiscal Policy 241

TEXT B Fiscal Deficits:Concepts and Trends 251

TEXT C Government Debt 261

CHAPTER 12 International Trade and the Theory of Comparative Advantage 272

TEXT A The Sources of International Trade 272

TEXT B The Principle of Comparative Advantage 279

TEXT C Protectionism and Free Trade 287

Answers to Exercises 301