About the Authors

Arthur O'Sullivan, Ph.D

Arthur O'Sullivan is a professor of economics at Lewis and Clark College in Portland, Oregon. After receiving his B.S. degree in economics at the University of Oregon, he spent two years in the Peace Corps, working with city planners in the Philippines. He received his Ph.D. degree in economics from Princeton University in 1981 and has taught at the University of California, Davis, and Oregon State University. He recently accepted an endowed professorship at Lewis and Clark College, where he teaches microeconomics and urban economics.

Steven M. Sheffrin, Ph.D

Steven M. Sheffrin is dean of the division of social sciences and professor of economics at the University of California, Davis. He received his B.A. from Wesleyan University and Ph.D. in economics from the Massachusetts Institute of Technology. He has been a visiting professor at Princeton University, Oxford University, and the London School of Economics and served as a financial economist with the Office of Tax Analysis of the United States Department of the Treasury. Professor Sheffrin is the author of numerous books and articles in the fields of macroeconomics, public finance, and international economics.

Copyright © 2007 by Pearson Education, Inc., publishing as Pearson Prentice Hall, Boston, Massachusetts 02116. All rights reserved. Printed in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458.

Pearson Prentice Hall™ is a trademark of Pearson Education, Inc.

Pearson® is a registered trademark of Pearson plc.

Prentice Hall® is a registered trademark of Pearson Education, Inc.

ExamView® is a registered trademark of FSCreations, Inc.

TeacherExpress™ is a trademark of Pearson Education, Inc.

13-digit ISBN 978-0-13-133483-0

10-digit ISBN 0-13-133483-2

4 5 6 7 8 9 10 11 10 09 08 07


End ofPage ii

Table of Contents

Economics: Principles in Action Unit 1 Introduction to Economics Unit 2 How Markets Work Unit 3 Business and Labor Unit 4 Money, Banking, and Finance Unit 5 Measuring Economic Performance Unit 6 Government and the Economy Unit 7 The Global Economy Reference Section