Economics for Investment Decision Makers: Micro, Macro, and International Economics -- Copyright -- Contents -- Foreword -- Acknowledgments -- About the CFA Institute Investment Series -- Chapter 1: Demand and Supply Analysis: Introduction -- Learning Outcomes -- 1. Introduction -- 2. Types of Markets -- 3. Basic Principles and Concepts -- 3.1. The Demand Function and the Demand Curve -- 3.2. Changes in Demand versus Movements along the Demand Curve -- 3.3. The Supply Function and the Supply Curve -- 3.4. Changes in Supply versus Movements along the Supply Curve -- 3.5. Aggregating the Demand and Supply Functions -- 3.6. Market Equilibrium -- 3.7. The Market Mechanism: Iterating toward Equilibrium-or Not -- 3.8. Auctions as a Way to Find Equilibrium Price -- 3.9. Consumer Surplus-Value minus Expenditure -- 3.10. Producer Surplus-Revenue minus Variable Cost -- 3.11. Total Surplus-Total Value minus Total Variable Cost -- 3.12. Markets Maximize Society's Total Surplus -- 3.13. Market Interference: The Negative Impact on Total Surplus -- 4. Demand Elasticities -- 4.1. Own-Price Elasticity of Demand -- 4.2. Own-Price Elasticity of Demand: Impact on Total Expenditure -- 4.3. Income Elasticity of Demand: Normal and Inferior Goods -- 4.4. Cross-Price Elasticity of Demand: Substitutes and Complements -- 4.5. Calculating Demand Elasticities from Demand Functions -- 5. Summary -- Practice Problems -- Chapter 2: Demand and Supply Analysis: Consumer Demand -- Learning Outcomes -- 1. Introduction -- 2. Consumer Theory: From Preferences to Demand Functions -- 3. Utility Theory: Modeling Preferences and Tastes -- 3.1. Axioms of the Theory of Consumer Choice -- 3.2. Representing the Preference of a Consumer: The Utility Function -- 3.3. Indifference Curves: The Graphical Portrayal of the Utility Function -- 3.4. Indifference Curve Maps.

3.5. Gains from Voluntary Exchange: Creating Wealth through Trade -- 4. The Opportunity Set: Consumption, Production, and Investment Choice -- 4.1. The Budget Constraint -- 4.2. The Production Opportunity Set -- 4.3. The Investment Opportunity Set -- 5. Consumer Equilibrium: Maximizing Utility Subject to the Budget Constraint -- 5.1. Determining the Consumer's Equilibrium Bundle of Goods -- 5.2. Consumer Response to Changes in Income: Normal and Inferior Goods -- 5.3. How the Consumer Responds to Changes in Price -- 6. Revisiting the Consumer's Demand Function -- 6.1. Consumer's Demand Curve from Preferences and Budget Constraints -- 6.2. Substitution and Income Effects for a Normal Good -- 6.3. Income and Substitution Effects for an Inferior Good -- 6.4. Negative Income Effect Larger than Substitution Effect: Giffen Goods -- 6.5. Veblen Goods: Another Possibility for a Positively Sloped Demand Curve -- 7. Summary -- Practice Problems -- Chapter 3: Demand and Supply Analysis: The Firm -- Learning Outcomes -- 1. Introduction -- 2. Objectives of the Firm -- 2.1. Types of Profit Measures -- 2.2. Comparison of Profit Measures -- 3. Analysis of Revenue, Costs, and Profits -- 3.1. Profit Maximization -- 3.2. Productivity -- 4. Summary -- Practice Problems -- Chapter 4: The Firm and Market Structures -- Learning Outcomes -- 1. Introduction -- 2. Analysis of Market Structures -- 2.1. Economists' Four Types of Structure -- 2.2. Factors That Determine Market Structure -- 3. Perfect Competition -- 3.1. Demand Analysis in Perfectly Competitive Markets -- 3.2. Supply Analysis in Perfectly Competitive Markets -- 3.3. Optimal Price and Output in Perfectly Competitive Markets -- 3.4. Factors Affecting Long-Run Equilibrium in Perfectly Competitive Markets -- 4. Monopolistic Competition -- 4.1. Demand Analysis in Monopolistically Competitive Markets.

4.2. Supply Analysis in Monopolistically Competitive Markets -- 4.3. Optimal Price and Output in Monopolistically Competitive Markets -- 4.4. Factors Affecting Long-Run Equilibrium in Monopolistically Competitive Markets -- 5. Oligopoly -- 5.1. Demand Analysis and Pricing Strategies in Oligopoly Markets -- 5.2. Supply Analysis in Oligopoly Markets -- 5.3. Optimal Price and Output in Oligopoly Markets -- 5.4. Factors Affecting Long-Run Equilibrium in Oligopoly Markets -- 6. Monopoly -- 6.1. Demand Analysis in Monopoly Markets -- 6.2. Supply Analysis in Monopoly Markets -- 6.3. Optimal Price and Output in Monopoly Markets -- 6.4. Price Discrimination and Consumer Surplus -- 6.5. Factors Affecting Long-Run Equilibrium in Monopoly Markets -- 7. Identification of Market Structure -- 7.1. Econometric Approaches -- 7.2. Simpler Measures -- 8. Summary -- Practice Problems -- Chapter 5: Aggregate Output, Prices, and Economic Growth -- Learning Outcomes -- 1. Introduction -- 2. Aggregate Output and Income -- 2.1. Gross Domestic Product -- 2.2. The Components of GDP -- 2.3. GDP, National Income, Personal Income, and Personal Disposable Income -- 3. Aggregate Demand, Aggregate Supply, and Equilibrium -- 3.1. Aggregate Demand -- 3.2. Aggregate Supply -- 3.3. Shifts in Aggregate Demand and Supply -- 3.4. Equilibrium GDP and Prices -- 4. Economic Growth and Sustainability -- 4.1. The Production Function and Potential GDP -- 4.2. Sources of Economic Growth -- 4.3. Measures of Sustainable Growth -- 5. Summary -- Practice Problems -- Chapter 6: Understanding Business Cycles -- Learning Outcomes -- 1. Introduction -- 2. Overview of the Business Cycle -- 2.1. Phases of the Business Cycle -- 2.2. Resource Use through the Business Cycle -- 2.3. Housing Sector Behavior -- 2.4. External Trade Sector Behavior -- 3. Theories of the Business Cycle.

3.1. Neoclassical and Austrian Schools -- 3.2. Keynesian and Monetarist Schools -- 3.3. The New Classical School -- 4. Unemployment and Inflation -- 4.1. Unemployment -- 4.2. Inflation -- 5. Economic Indicators -- 5.1. Popular Economic Indicators -- 5.2. Other Variables Used as Economic Indicators -- 6. Summary -- Practice Problems -- Chapter 7: Monetary and Fiscal Policy -- Learning Outcomes -- 1. Introduction -- 2. Monetary Policy -- 2.1. Money -- 2.2. Roles of Central Banks -- 2.3. Objectives of Monetary Policy -- 2.4. Contractionary and Expansionary Monetary Policies and the Neutral Rate -- 2.5. Limitations of Monetary Policy -- 3. Fiscal Policy -- 3.1. Roles and Objectives of Fiscal Policy -- 3.2. Fiscal Policy Tools and the Macroeconomy -- 3.3. Fiscal Policy Implementation: Active and Discretionary Fiscal Policy -- 4. The Relationship between Monetary and Fiscal Policy -- 4.1. Factors Influencing the Mix of Fiscal and Monetary Policy -- 4.2. Quantitative Easing and Policy Interaction -- 4.3. The Importance of Credibility and Commitment -- 5. Summary -- Practice Problems -- Chapter 8: International Trade and Capital Flows -- Learning Outcomes -- 1. Introduction -- 2. International Trade -- 2.1. Basic Terminology -- 2.2. Patterns and Trends in International Trade and Capital Flows -- 2.3. Benefits and Costs of International Trade -- 2.4. Comparative Advantage and the Gains from Trade -- 3. Trade and Capital Flows: Restrictions and Agreements -- 3.1. Tariffs -- 3.2. Quotas -- 3.3. Export Subsidies -- 3.4. Trading Blocs, Common Markets, and Economic Unions -- 3.5. Capital Restrictions -- 4. The Balance of Payments -- 4.1. Balance of Payments Accounts -- 4.2. Balance of Payments Components -- 4.3. Paired Transactions in the Balance of Payments Bookkeeping System -- 4.4. National Economic Accounts and the Balance of Payments -- 5. Trade Organizations.

5.1. International Monetary Fund -- 5.2. World Bank Group -- 5.3. World Trade Organization -- 6. Summary -- Practice Problems -- Chapter 9: Currency Exchange Rates -- Learning Outcomes -- 1. Introduction -- 2. The Foreign Exchange Market -- 2.1. Market Functions -- 2.2. Market Participants -- 2.3. Market Size and Composition -- 3. Currency Exchange Rate Calculations -- 3.1. Exchange Rate Quotations -- 3.2. Cross-Rate Calculations -- 3.3. Forward Calculations -- 4. Exchange Rate Regimes -- 4.1. The Ideal Currency Regime -- 4.2. Historical Perspective on Currency Regimes -- 4.3. A Taxonomy of Currency Regimes -- 5. Exchange Rates, International Trade, and Capital Flows -- 5.1. Exchange Rates and the Trade Balance: The Elasticities Approach -- 5.2. Exchange Rates and the Trade Balance: The Absorption Approach -- 6. Summary -- Practice Problems -- Chapter 10: Currency Exchange Rates: Determination and Forecasting -- Learning Outcomes -- 1. Introduction -- 2. Foreign Exchange Market Concepts -- 2.1. Arbitrage Constraints on Spot Exchange Rate Quotes -- 2.2. Forward Markets -- 3. A Long-Term Framework for Exchange Rates -- 3.1. International Parity Conditions -- 3.2. Assessing an Exchange Rate's Equilibrium Level -- 3.3. Tying It Together: A Model That Includes Long-Term Equilibrium -- 4. The Carry Trade -- 5. The Impact of Balance of Payments Flows -- 5.1. Current Account Imbalances and the Determination of Exchange Rates -- 5.2. Capital Flows and the Determination of Exchange Rates -- 6. Monetary and Fiscal Policies -- 6.1. The Mundell-Fleming Model -- 6.2. Monetary Models of Exchange Rate Determination -- 6.3. The Taylor Rule and the Determination of Exchange Rates -- 6.4. Monetary Policy and Exchange Rates-The Historical Evidence -- 6.5. Fiscal Policy and the Determination of Exchange Rates -- 7. Exchange Rate Management: Intervention and Controls.

8. Currency Crises.