List of Figures

Figure 1.1: Two Identical Plants

Figure 1.2: Representing Points in a Two-Dimensional Space

Figure 1.3: Relationships between Variables

Figure 1.4: A Graph of the Total Cost (TC) Function

Figure 1.5: The Relationship between Output and Total Cost

Figure 1.6: An Upward Shift of the Total Cost Function

Figure 1.7: Two Extreme Cases

Figure 1.8: The Slope of a Nonlinear Curve

Figure 1.9: A Graph of the Absolute Value Function

Figure 1.10: A Straight Line Connecting Two Points

Figure 1.11: Problem 4

Figure 2.1: The Economic Problem

Figure 2.2: A Production Possibilities Table

Figure 2.3: Marginal Benefit and Marginal Cost

Figure 2.4: The Condition for Allocative Efficiency

Figure 2.5: Relaxing the Assumptions of the Model

Figure 2.6: The Role of Investment

Figure 2.7: Unbalanced Growth

Figure 2.8: A Combination of Growth and Contraction

Figure 2.9: Historical Application: Petrodollar Recycling

Figure 2.10: A Neoclassical Classification Scheme for Economic Systems

Figure 2.11: Market Capitalism and the PPF

Figure 2.12: A Marxian Classification Scheme for Modes of Production

Figure 2.13: Problem 1

Figure 2.14: Problem 2

Figure 3.1: The Neoclassical Circular Flow Model

Figure 3.2: The Basic Structure of the Neoclassical Supply and Demand Model

Figure 3.3: Representations of Demand

Figure 3.4: The Horizontal Summation of Individual Demands

Figure 3.5: The Market Demand Curve

Figure 3.6: A Change in Quantity Demanded

Figure 3.7: Changes in Demand

Figure 3.8: Changes in Demand due to an Increase in Consumers’ Incomes

Figure 3.9: Representations of Supply

Figure 3.10: Horizontal Summation and the Market Supply Curve

Figure 3.11: A Change in Quantity Supplied

Figure 3.12: A Rise in Supply

Figure 3.13: An Increase in the Price of a Related Good

Figure 3.14: Competitive Market Equilibrium

Figure 3.15: Changes in Demand

Figure 3.16: Changes in Supply

Figure 3.17: A Simultaneous Rise in Supply and Demand

Figure 3.18: Consumers’ Surplus

Figure 3.19: Producers’ Surplus

Figure 3.20: A Price Ceiling in the Gasoline Market

Figure 3.21: A Price Floor in the Gasoline Market

Figure 3.22: A Negative Externality in Production

Figure 3.23: A Positive Externality in Consumption

Figure 3.24: Problem 5

Figure 3.25: Problem 6

Figure 4.1: A Marxian Circular Flow Model

Figure 4.2: The Simple Form of Value

Figure 4.3: The Expanded Form of Value

Figure 4.4: The General Form of Value

Figure 4.5: The Money Form of Value

Figure 4.6: The Price-Form

Figure 4.7: Paper as the Symbol of Value

Figure 4.8: Supply and Demand

Figure 4.9: A Commodity Circuit

Figure 4.10: The General Formula for Capital

Figure 4.11: The Inclusion of Labor-Power in the World of Commodities

Figure 4.12: The Division of the Working Day

Figure 4.13: The Component Parts of the Total Value

Figure 4.14: The Relationship between the Value Components and the Total Product

Figure 4.15: The Expanded Version of the Circuit of Capital

Figure 4.16: The Production of Absolute Surplus Value

Figure 4.17: The Production of Relative Surplus Value

Figure 5.1: Calculating the Slope of a Linear Demand Curve

Figure 5.2: The Inadequacy of Slope as a Measure of Consumer Responsiveness

Figure 5.3: A Situation that Requires the Arc Elasticity Formula

Figure 5.4: A Situation that Requires the Point Elasticity Formula

Figure 5.5: The Decline in Price Elasticity of Demand along a Linear Demand Curve

Figure 5.6: The Division of a Linear Demand Curve into Elastic and Inelastic Sections

Figure 5.7: A Perfectly Inelastic Demand Curve

Figure 5.8: A Perfectly Elastic Demand Curve

Figure 5.9: The Demand Curve and Total Revenue

Figure 5.10: The Relationship between Elasticity and Revenue

Figure 5.11: Price Elasticity of Supply in the Short Run and Long Run

Figure 6.1: Total Utility and Marginal Utility

Figure 6.2: The Economic Problem Facing the Consumer

Figure 6.3: The Derivation of the Individual Demand Curve

Figure 6.4: The Marginal Utility Solution to the Paradox of Value

Figure 6.5: The Commodity Space

Figure 6.6: The Budget Set

Figure 6.7: An Example of a Budget Line

Figure 6.8: Changes in the Budget Set

Figure 6.9: An Indifference Curve

Figure 6.10: The Marginal Rate of Substitution (MRS)

Figure 6.11: An Indifference Map

Figure 6.12: The Utility Maximizing Choice

Figure 6.13: The Modern Derivation of the Individual Demand Curve

Figure 6.14: A Fall in the Price of a Veblen Good

Figure 6.15: A Rise in the Price of Cigarettes with Endogenous Preferences

Figure 6.16: Problem 5

Figure 7.1: The Total Product Curve

Figure 7.2: The Marginal Product and Average Product Curves

Figure 7.3: The Derivation of the Total Variable Cost Curve

Figure 7.4: The Total Cost Curves

Figure 7.5: The Average Fixed Cost Curve

Figure 7.6: Relationships among the Unit-Cost Curves

Figure 7.7: The Relationship between the Product Curves and the Unit Cost Curves

Figure 7.8: The Total Product Curve as Generated in MS Excel

Figure 7.9: The AP and MP Curves as Generated in MS Excel

Figure 7.10: The Scale Expansion of an Oil Pipeline Opening

Figure 7.11: The Long-Run Average Total Cost Curve

Figure 7.12: The Relationship between the Long Run and Short Run Average Total Cost Curves

Figure 7.13: Minimum Efficient Scale (MES)

Figure 7.14: Variation in LRATC by Industry

Figure 7.15: A LRATC Curve with Many Output Levels that Minimize Unit Cost

Figure 8.1: Differing Degrees of Market Power

Figure 8.2: The Market Power Spectrum

Figure 8.3: Market Demand and the Demand Facing a Perfectly Competitive Firm

Figure 8.4: The Total Revenue Curve

Figure 8.5: The Marginal Revenue and Average Revenue Curves

Figure 8.6: Graphical Representations of Maximum Economic Profit

Figure 8.7: Profit Maximization Using Marginal Adjustments to Output

Figure 8.8: Case 1 – A Positive Economic Profit (P > ATC)

Figure 8.9: Case 2 – The Break-Even Point (P = ATC)

Figure 8.10: Case 3 – Operating at a Loss (ATC > P > AVC)

Figure 8.11: Case 4 – The Shutdown Point (P = AVC)

Figure 8.12: Case 5 – The Shutdown Case (P < AVC)

Figure 8.13: Marginal Cost and Short Run Output Supply

Figure 8.14: The Short-Run Supply Curve of a Perfectly Competitive Firm

Figure 8.15: Market Demand and Market Supply

Figure 8.16: Long-Run Equilibrium

Figure 8.17: Adjustment to Long-Run Equilibrium – The Case of Profits

Figure 8.18: Adjustment to Long-Run Equilibrium – The Case of Losses

Figure 8.19: The Optimal Plant Size

Figure 8.20: The Long-Run Industry Supply Curve for a Constant-Cost Industry

Figure 8.21: The Long-Run Industry Supply Curve for an Increasing-Cost Industry

Figure 8.22: The Long-Run Industry Supply Curve for a Decreasing Cost Industry

Figure 8.23: Problem 2

Figure 8.24: Problem 3

Figure 8.25: Problem 4

Figure 9.1: Economies of Scale as a Barrier to Entry

Figure 9.2: The Demand Curves Facing the Monopolist and the Perfectly Competitive Firm

Figure 9.3: The Average Revenue Curve Facing a Monopolist

Figure 9.4: The Total Revenue Curve Facing a Monopolist

Figure 9.5: The Marginal Revenue Curve Facing a Monopolist

Figure 9.6: The Marginal Revenue Curve Facing a Perfectly Competitive Firm

Figure 9.7: The Relationship between the MR and TR Curves Facing a Monopolist

Figure 9.8: Case 1 – The Monopolist Earning Economic Profits (P > ATC)

Figure 9.9: Case 2 – The Monopolist at the Break-Even Point (P = ATC)

Figure 9.10: Case 3 – The Monopolist Operating at a Loss (ATC > P > AVC)

Figure 9.11: Case 4 – The Monopolist at the Shutdown Point (P = AVC)

Figure 9.12: Case 5 – The Monopolist Shuts Down in the Short Run (P < AVC)

Figure 9.13: The Harberger Triangle and the Rectangle of Redistribution in Monopolistic Markets

Figure 9.14: A Natural Monopoly in the Electricity Industry

Figure 9.15: Perfect Price Discrimination

Figure 9.16: The Range of Political Responses to Monopoly

Figure 10.1: The Demand Curves Facing Two Different Firms

Figure 10.2: Short-Run Equilibrium Positions for a Monopolistically Competitive Firm

Figure 10.3: A Zero-Economic Profit Long-Run Equilibrium for a Monopolistically Competitive Firm (P = ATC)

Figure 10.4: A Price War Erupts in a Duopoly Market

Figure 10.5: The Kinked-Demand Curve Facing One Firm

Figure 10.6: The Marginal Revenue Curve of a Firm Facing a Kinked Demand Curve

Figure 10.7: The Price Leadership Model

Figure 10.8: A Duopoly Game (Example #1)

Figure 10.9: A Duopoly Game (Example #2)

Figure 10.10: A Duopoly Game (Example #3)

Figure 10.11: The Sets of All Possible Nash Equilibria and Dominant Equilibria

Figure 10.12: A Duopoly Game (Example #4)

Figure 10.13: A Duopoly Game (Example #5)

Figure 10.14: A Post-Keynesian Markup Pricing Model

Figure 10.15: Problem #3

Figure 10.16: Problem #4

Figure 10.17: Problem #5

Figure 11.1: The Labor Supply Curve Facing a Firm in a Perfectly Competitive Labor Market

Figure 11.2: The Total Resource Cost Curve

Figure 11.3: The Average Resource Cost Curve and the Marginal Resource Cost Curve

Figure 11.4: The Total Product and Marginal Product Curves

Figure 11.5: The Marginal Revenue Product (MRP) for a Perfectly Competitive Firm

Figure 11.6: The Marginal Revenue Product Curve and the Average Revenue Product Curve for a Perfectly Competitive Firm

Figure 11.7: A New Profit-Maximizing Rule: MRP = MRC

Figure 11.8: The MRP Curve as the Labor Demand Curve

Figure 11.9: The Market Demand for Labor

Figure 11.10: The Time Constraint (The Income/Leisure Tradeoff)

Figure 11.11: A Worker’s Indifference Curve

Figure 11.12: Worker Equilibrium: Utility Maximization

Figure 11.13: The Derivation of the Individual Worker’s Labor Supply Curve

Figure 11.14: The Backward-Bending Labor Supply Curve

Figure 11.15: The Labor Market Supply Curve

Figure 11.16: Labor Market Equilibrium

Figure 11.17: The Monopsonist and Supply

Figure 11.18: The Average Resource Cost Curve of the Monopsonist

Figure 11.19: Marginal Resource Cost for a Monopsonist

Figure 11.20: The Marginal Resource Cost Curve for a Monopsonist

Figure 11.21: Equilibrium in a Monopsonistic Labor Market

Figure 11.22: An Industrial Union in a Market with Many Employers

Figure 11.23: The Bilateral Monopoly Model

Figure 11.24: Three Expressions of the Value Produced in a Day (in a specific industry)

Figure 11.25: A 30% Productivity Increase (in this industry but not in the wage goods industry)

Figure 11.26: A Productivity Increase (in the wage goods industry but not in this industry)

Figure 11.27: A 30% Extension of the Working Day (in this industry)

Figure 11.28: A 30% Increase in the Intensity of Labor (in this industry but not across all industries)

Figure 12.1: The U.S. Official Poverty Rate, 1959-2016

Figure 12.2: The Lorenz Curve

Figure 12.3: Lorenz Curves Representing Income Distribution and Wealth Distribution

Figure 12.4: Two Combinations of Goods on a Production Possibilities Frontier (PPF) in 2001 and 2002

Figure 12.5: Income and Expenditure: A Neoclassical Identity

Figure 12.6: The Effect of Gross Investment and Depreciation on the Private Capital Stock

Figure 12.7: The Key Measures in the Transition from Gross National Product (GNP) to Gross Domestic Product (GDP)

Figure 12.8: A Diagram Representing the Two Approaches to GDP Measurement

Figure 12.9: Real GDP Fluctuations Around a Long-Term Trend Line, 1990 to 2017 (in billions of 2009 chained dollars)

Figure 12.10: Structural Cycles: The Cobweb Model

Figure 12.11: Real Gross Domestic Product Per Capita, 1947-2017

Figure 12.12: The Breakdown of the Population Using Labor Force Aggregates

Figure 12.13: The U.S. Civilian Labor Force Participation Rate, 1948-2018

Figure 12.14: The U.S. Civilian Unemployment Rate, 1948-2018

Figure 12.15: The U.S. Special Unemployment Rate: Unemployed and Discouraged Workers, 1994-2018

Figure 12.16: The U.S. Natural Rate of Unemployment and the Civilian Unemployment Rate, 1948-2017

Figure 12.17: The U.S. CPI Inflation Rate, 1960-2017

Figure 12.18: The Effect of Inflation on the Real Value of $1000

Figure 13.1: The Classical Theory of Employment and Output

Figure 13.2: Keynes’s Objection to Say’s Law of Markets

Figure 13.3: The Loanable Funds Market and the Equilibrium Rate of Interest

Figure 13.4: The Consumption Function

Figure 13.5: The Saving Function

Figure 13.6: Determinants of Consumption: Relaxing the Ceteris Paribus Assumption

Figure 13.7: The Building Blocks of Keynes’s Macroeconomic Theory

Figure 13.8: The Consumption Function and the Reference Line

Figure 13.9: The Saving Function and the Break-Even Income Level

Figure 13.10: The Determination of Planned Investment Spending

Figure 13.11: The Planned Aggregate Expenditures Curve

Figure 13.12: The Determination of Equilibrium Real GDP

Figure 13.13: The Calculation of Equilibrium Real GDP in the Keynesian Cross Model

Figure 13.14: The Saving-Investment Approach to the Determination of Equilibrium GDP

Figure 13.15: Injections of Investment and Leakages of Saving

Figure 13.16: The Calculation of Real GDP in the Saving-Investment Graph

Figure 13.17: A National Income Accounts Identity: Saving ≡ Actual Investment

Figure 13.18: The Keynesian Theory of Employment and Output

Figure 13.19: Application: The Paradox of Thrift

Figure 13.20: The Investment Multiplier in the Aggregate Expenditures Model

Figure 13.21: The Net Export Curve

Figure 13.22: The U.S. Balance of Trade from 1870-1914 (in millions of dollars)

Figure 13.23: Net Exports as a Component of Aggregate Expenditures

Figure 13.24: Equilibrium GDP in an Open, Private Economy

Figure 13.25: The Government Expenditures Curve

Figure 13.26: Government Expenditures as a Component of Aggregate Expenditures

Figure 13.27: Equilibrium GDP in an Open, Mixed Economy

Figure 13.28: Lump Sum Taxation and After-Tax Consumption

Figure 13.29: After-Tax Consumption as a Component of Aggregate Expenditures

Figure 13.30: Equilibrium GDP in an Open, Mixed Economy with Lump Sum Taxation

Figure 13.31: The Calculation of Equilibrium Real GDP in the Expanded Keynesian Cross Model

Figure 13.32: The Aggregate Demand (AD) Curve

Figure 13.33: The Derivation of the Downward-Sloping Aggregate Demand Curve

Figure 13.34: Determinants of Aggregate Demand: An Example

Figure 13.35: The Aggregate Supply (AS) Curve and Rising Per-Unit Production Costs

Figure 13.36: The Determinants of Aggregate Supply: An Example

Figure 13.37: Macroeconomic Equilibrium

Figure 13.38: A Horizontal Aggregate Supply Curve

Figure 13.39: Case 1 – Demand-Pull Inflation

Figure 13.40: Case 2 – The Great Depression

Figure 13.41: Case 3 – Cost-Push Inflation

Figure 13.42: Case 4 – Full Employment with Stable Prices

Figure 13.43: Case 5 – The Great Recession

Figure 13.44: The Long Run Aggregate Supply (LRAS) Curve

Figure 13.45: Demand-Pull Inflation in the Neoclassical Synthesis Model

Figure 13A.1: The Investment Multiplier and the Marginal Propensities to Consume and Save

Figure 13A.2: The Lump Sum Tax Multiplier and the Marginal Propensity to Consume

Figure 14.1: The Changing Distribution of Wages and Profits Over the Course of the Business Cycle

Figure 14.2: Fluctuations in Wages and the General Rate of Profit Over Time

Figure 14.3: Factors that Influence the Size of the Reserve Army of the Unemployed

Figure 14.4: The Pattern of the Real Wage and the Real Value Added Per Worker, 1820-2006

Figure 14.5: Key Linkages Contributing to the Growth of Systemic Risk in the Leadup to the 2008 Financial Crisis

Figure 14.6: The Structure of Production as Captured in Garrison’s Version of the Hayekian Triangle

Figure 14.7: The Market for Present Goods

Figure 14.8: A Change in the Structure of Production Due to a Change in the Time Preference of Laborers

Figure 14.9: A Change in the Structure of Production Due to a Change in the Time Preference of Capitalists

Figure 14.10: Neutral Versus Non-Neutral Monetary Expansions

Figure 14.11: A Change in the Structure of Production Due to a Non-Neutral Monetary Expansion (short run and long run)

Figure 15.1: The Growth of Principal Over Time

Figure 15.2: The Case of Compound Interest for a 2-Year Loan

Figure 15.3: The Case of Compound Interest for a 3-Year Loan

Figure 15.4: A 5-Year Bond with a Fixed Coupon Payment

Figure 15.5: The Linkage Between the Loanable Funds Market and the Bond Market

Figure 15.6: Simultaneous Equilibrium in the Bond Market and Loanable Funds Market

Figure 15.7: The Division of a Household’s Assets into Component Parts

Figure 15.8: The Transactions Demand and the Precautionary Demand for Money

Figure 15.9: The Asset Demand for Money

Figure 15.10: The Total Demand for Money

Figure 15.11: The Money Market

Figure 15.12: An Increase in the Money Supply

Figure 15.13: A Decrease in the Money Supply

Figure 15.14: An Increase in the Demand for Money

Figure 15.15: A Decrease in the Demand for Money

Figure 15.16: The Discrepancy Between Stock Prices and Bond Prices

Figure 15.17: The Relationship between the Rate of Interest (i) and the Rate of Profit of Enterprise (re)

Figure 15.18: The Point at which the Rates of Interest, Profit, and Profit of Enterprise are All Equal

Figure 15.19: The Loan Capital Market and the Movement of the Rate of Interest

Figure 16.1: The Relationship Between the Neoclassical Money Supply Measures

Figure 16.2: Growth Rates of the M1 and M2 Money Stocks, 1982-2017

Figure 16.3: Fractional Reserve Banking in Gold Standard Economies and Fiat Money Economies

Figure 16.4: The Balance Sheet of an Individual

Figure 16.5: The Consolidated Balance Sheet of all U.S. Commercial Banks, January 10, 2018, seasonally adjusted, billions of U.S. dollars

Figure 16.6: Changes in the M1 Money Supply in the Money Market

Figure 16.7: Cash Deposits and Cash Withdrawals Involving Checkable Deposits

Figure 16.8: The Role of the Fed in Processing a Check

Figure 16.9: Cash Deposits and Cash Withdrawals Involving Savings Deposits

Figure 16.10: Transfers between Savings Deposits and Checkable Deposits

Figure 16.11: The Expansion of the M1 Money Supply through LendingF

igure 16.12: A Bank Subject to a 10% Reserve Requirement

Figure 16.13a: The Withdrawal of the Loan Amount

Figure 16.13b: The Growth of the Loan Asset with the Accumulation of Anticipated Interest (i = 5%)

Figure 16.13c: The Borrower Deposits Funds to Repay the Interest and Principal Amount of the Loan

Figure 16.13d: The Contraction of the M1 Money Supply through Loan Repayment

Figure 16.14: The Impact of a Monetary Expansion on the Financial Markets

Figure 16.15: The Impact of a Monetary Contraction on the Financial Markets

Figure 16.16: First Regional Bank Accepts a Deposit and Grants a Loan

Figure 16.17: Second Regional Bank Accepts a Deposit and Grants a Loan

Figure 16.18: Third Regional Bank Accepts a Deposit and Grants a Loan

Figure 16.19: The Formula for the Circuit of Money Capital

Figure 16.20: The Circulation of Bank Capital

Figure 16.21: The Dynamics of Profit Rate Equalization Under Normal Conditions (market interest rate > general interest rate)

Figure 17.1: The Consolidated Statement of Condition of All Federal Reserve Banks (in millions of dollars)

Figure 17.2: The Fed Purchases Securities from a Bank

Figure 17.3: The Fed Sells Securities to a Bank

Figure 17.4: The Fed Grants a Discount Loan to a Bank

Figure 17.5: A Bank Repays the Fed for a Discount Loan

Figure 17.6: The Fed Reduces the Reserve Requirement

Figure 17.7: The Fed Raises the Reserve Requirement

Figure 17.8: The Fed Pursues an Expansionary Monetary Policy

Figure 17.9: The Impact of Expansionary Monetary Policy on Investment Spending

Figure 17.10: The Impact of Expansionary Monetary Policy on Net Export Spending

Figure 17.11: The Fed Pursues a Contractionary Monetary Policy

Figure 17.12: The Impact of Contractionary Monetary Policy on Investment Spending

Figure 17.13: The Impact of Contractionary Monetary Policy on Net Export Spending

Figure 17.14: The Impact of Expansionary Monetary Policy in the Short Run

Figure 17.15: The Impact of Expansionary Monetary Policy in the Long Run

Figure 17.16: The Historical Pattern of the M1 Money Velocity, 1959-2017

Figure 17.17: The Impact of a Rise in Government Spending in the AD/AS Model (with accommodation from the central bank)

Figure 17.18: The Fed Monetizing the Federal Debt

Figure 17.19: The Impact of a Rise in Government Spending in the AD/AS Model (with no accommodation from the central bank and consumer spending and investment spending falling)

Figure 17.20: The Impact of a Rise in Government Spending in the AD/AS Model (with no accommodation from the central bank and a decline in spending in input markets)

Figure 17.21: The Impact of Rising Input Costs in the AD/AS Model (with no accommodation from the central bank)

Figure 17.22: The Impact of the Wage-Price Inflationary Spiral on the Financial Markets (according to Post-Keynesian Theory)

Figure 17.23: The Impact of the Wage-Price Inflationary Spiral (with accommodation from the central bank)

Figure 17.24: Nonfarm Business Sector Labor Productivity, 1950-2017, all employed persons

Figure 17.25: The GDP Deflator, 1959-2017, seasonally adjusted, Index 2009 = 100

Figure 17.26: The M1 Money Supply, 1959-2017, seasonally adjusted, in billions of dollars

Figure 17.27: Median Weekly Real Earnings for Full-Time Wage and Salary Workers, 1979-2017, seasonally adjusted, 1982-1984 dollars

Figure 17.28: Median Weekly Nominal Earnings for Full-Time Wage and Salary Workers, 1979-2017, seasonally adjusted, in dollars

Figure 17.29: The Impact of an Open Market Purchase of Securities on the Central Bank’s Balance Sheet

Figure 17.30: The Impact of an Open Market Purchase and Discount Lending on the Central Bank’s Balance Sheet

Figure 18.1: The Impact of Expansionary Fiscal Policy in the Short Run – Lump Sum Tax Cuts and/or Government Spending Increases

Figure 18.2: The Impact of Expansionary Fiscal Policy with Some Price Flexibility – Lump Sum Tax Cuts and/or Government Spending Increases

Figure 18.3: The Impact of Contractionary Fiscal Policy in the Short Run – Lump Sum Tax Increases and/or Government Spending Reductions

Figure 18.4: The Impact of Contractionary Fiscal Policy with Some Price Flexibility – Lump Sum Tax Increases and/or Government Spending Reductions

Figure 18.5: Complete Crowding Out of Private Investment due to Government Borrowing

Figure 18.6: Partial Crowding Out of Private Investment due to Government Borrowing

Figure 18.7: Zero Crowding Out of Private Investment due to Government Borrowing

Figure 18.8: Partial Crowding Out due to Deficit Spending with Flexible Exchange Rates

Figure 18.9: Partial Crowding Out due to Deficit Spending with Fixed Exchange Rates

Figure 18.10: Partial Crowding Out due to Deficit Spending with a Regulated Trading Volume

Figure 18.11: Macroeconomic Implications of Budget Surpluses and the Repayment of Federal Debt

Figure 18.12: Introducing a Proportional Income Tax into the Consumption Function

Figure 18.13: Introducing a Proportional Income Tax into the Keynesian Cross Model

Figure 18.14: Progressive Tax Systems (Rising Average Tax Rates)

Figure 18.15: The Inherent Stability of a Progressive Tax System

Figure 18.16: Proportional Tax Systems (Constant Average Tax Rates)

Figure 18.17: The Stabilizing Power of Proportional Tax Systems

Figure 18.18: Regressive Tax Systems (Falling Average Tax Rates)

Figure 18.19: The Destabilizing Power of Regressive Tax Systems

Figure 18.20: A Balanced Full Employment Budget

Figure 18.21: A Full Employment Budget Deficit

Figure 18.22: A Full Employment Budget Surplus

Figure 18.23: The Impact of a Balanced Budget Policy during a Recession

Figure 18.24: The Impact of a Balanced Budget Policy during a Period of Inflationary Expansion

Figure 18.25: Full Employment Keynesian Policies versus Austerity Policies

Figure 18.26: Combinations of Tax Rates that Allow the Government to Pay the Interest Owed on its Debt

Figure 19.1: Production Possibilities Frontiers for Two Nations

Figure 19.2: The Limits to the International Terms of Trade

Figure 19.3: Expanded Consumption Possibilities: The Trading Possibilities Frontier

Figure 19.4: PPFs for Two Nations Facing Increasing Marginal Opportunity Costs

Figure 19.5: Partial Specialization in the Case of Increasing Marginal Opportunity Cost

Figure 19.6: The Equilibrium International Terms of Trade in the Case of Increasing Marginal Opportunity Cost

Figure 19.7: The Adjustment to Equilibrium in the Case of an Excess Demand for Wheat

Figure 19.8: The Adjustment to Equilibrium in the Case of an Excess Demand for Coffee

Figure 19.9: Economies of Scale in Retainable Industries

Figure 19.10: The Effect on GDP of Capturing Retainable Industries

Figure 19.11: The Distribution of Gains from Trade with the Capture of Retainable Industries

Figure 19.12: International Trade and the Supply and Demand Model

Figure 19.13: The Economic Consequences of an Import Tariff

Figure 19.14: The Economic Consequences of an Import Quota

Figure 19.15: A Metropolis and Its Satellites

Figure 19.16: A Case of Price and Profit Rate Equalization with Differential Wages

Figure 19.17: Problem #2

Figure 19.18: Problem #3

Figure 20.1: Foreign Exchange Rates

Figure 20.2: Fluctuations in the Dollar-Pound Exchange Rate

Figure 20.3: Two Perspectives of Foreign Exchange Markets

Figure 20.4: The Reciprocal Interaction between Exchange Rates

Figure 20.5: The Quantity Demanded of Foreign Exchange

Figure 20.6: Changes in the Demand for Foreign Exchange

Figure 20.7: The Quantity Supplied of Foreign Exchange

Figure 20.8: Changes in the Supply of Foreign Exchange

Figure 20.9: Cases Involving Changes in Demand

Figure 20.10: Cases Involving Changes in Supply

Figure 20.11: The Elimination of a U.S. Balance of Payments Deficit in the Case of Floating Exchange Rates

Figure 20.12: A Fixed Exchange Rate Policy in the Case of a Shortage of Euros

Figure 20.13: The Elimination of a U.S. Balance of Payments Surplus in the Case of Floating Exchange Rates

Figure 20.14: A Fixed Exchange Rate Policy in the Case of a Surplus of Yen

Figure 20.15: Balance of Payments Deficits in Thailand

Figure 20.16: A Case of Inter-Regional Arbitrage with a Common Currency

Figure 20.17: A Case of International Arbitrage (assuming a fixed exchange rate of $2/₤)

Figure 20.18: A Case of International Arbitrage (assuming flexible exchange rates that adjust from $2/₤ to $1.3333/₤)

Figure 20.19: An Imperialist Road Map

Figure 20.20: The Influence of Supply and Demand on Exchange Rates in Marxian Economics

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