Includes bibliographical references and index.

pt. I. Understanding the macro economy -- 1. Output -- Measuring national output -- Exchange of output across countries -- What makes output go up and down? -- Isn't wealth more important than output? -- 2. Money -- Money and its effect on interest rates, exchange rates, and inflation -- Nominal versus real -- Money and banking -- The art and science of central banking -- 3. Expectations -- Expectations and inflation -- Expectations and output -- Expectations and other macro variables -- pt. II. Selected topics, background and mechanics -- 4. A short history of money and monetary policy in the United States -- Defining the unit of account and the price of money -- The gold standard : a self-regulating mechanism? -- The creation of the Federal Reserve -- Finding the right monetary rule under a floating exchange rate -- The transformation of American monetary policy -- 5. The fundamentals of GDP accounting -- Three measurement approaches -- The nuts and bolts of the expenditure method -- Depreciation -- GDP versus GNP -- Historical and cross-country comparisons -- Investment, savings, and foreign borrowing -- 6. Reading a balance of payments statement -- A typical balance of payments statement -- Understanding credits and debits -- The power and pitfalls of BOP accounting -- 7. Understanding exchange rates -- The current account balance -- Inflation and purchasing power parity -- Interest rates -- Making sense of exchange rates -- Conclusion -- Glossary