Assignment

Economics, Ch. 29: The Aggregate Expenditures Model
Read pages 643-646.

Consider the following as you read:

• How do economists integrate the international sector (exports and imports) into the aggregate expenditures model?
• How do economists integrate the public sector (government expenditures and taxes) into the aggregate expenditures model?

Economics, Ch. 33: Money Creation
Read pages 731-743 of Economics.

Consider the following as you read:

• Why is the U.S. banking system called a "fractional reserve" system?
• How can a bank create money?

Economics, Ch. 34: Interest Rates and Monetary Policy
Read pages 752-769 of Economics.

Consider the following as you read:

• How is the equilibrium interest rate determined in the market for money?
• What are the goals and tools of monetary policy?

Economics, Ch. 38: International Trade
Read pages 839-854 and 857-865 of Economics.

Consider the following as you read:

• What are the key facts about international trade?
• How do differences between world prices and domestic prices prompt exports and imports?