Having gained art overview of the policies and objectives of macroeconomics, along with a preview of the elements of aggregate supply and demand, we turn in the following chapters to a detailed discussion. Figure 5-12 provides a road map of the terrain in the pages ahead of us. Here is the plan.
We begin with a close look at the measurement of national output and income (Chapter 6). The next three chapters ('1; through 9) introduce the basic elements which determine aggregate demand including the demand for investment and consumption along with Keynesian and classical theories. Chapter 10 examines the determinants of aggregate supply, along with modern supply-side economics.
The next five chapters analyze money, unemployment, and inflation. We introduce money in Chapters 11 and 12, which show why households hold money and how the Federal Reserve controls the money SUP‘ ply. Once money is understood, we turn to an anal)“ sis of the policy issues of unemployment and inflation in Chapters 13 through 15.
The final two chapters on macroeconomics turn to the major policy issues of today: the way that money affects the economy, the use of fiscal policy to Stabilize the economy, the stubborn fiscal deficits that have plagued the American economy in the 19805, and alternative approaches to macroeconomics. The concluding chapters will help to explain why macroeconomics is both the most exciting and the most controversial area of economics today.