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test reading guide


Table of Contents
CH 01 INTRODUCTION 2

THE BIG PICTURE 3
KEY FORCES SHAPING TODAY’S ECONOMY 4

Technological Change 4
Globalization 5
The Evolution of Financial Markets 7
THE ROLE OF GOVERNMENT 7

Economic Competition 7
Government Intervention 8
Finding a Balance 9
THE DEFINITION OF ECONOMICS 9

Indicators of Prosperity 9
The Safety Net 11
DISAGREEMENTS IN ECONOMICS 11
APPENDIX THE BASICS OF GRAPHS 16

READING DATA FROM GRAPHS 16
PLOTTING GRAPHS FROM DATA 17
CONCLUSION 19
CH 02 DEMAND AND SUPPLY: THE BASICS OF THE MARKET ECONOMY 22

PRICES, BUYERS, AND SELLERS 23

Local, National, and Global Markets 23
The Market Price 24
HOW PRICE AFFECTS THE QUANTITY DEMANDED 25

The Law of Demand 26
The Special Case of Zero Price 26
Graphing the Demand Curve 28
HOW PRICE AFFECTS THE QUANTITY SUPPLIED 29

The Law of Supply 30
Graphing the Supply Schedule 31
NEW MARKETS 32