1 Introduction to Macroeconomics
2 Measuring the Macroeconomy
3 An Overview of Long-Run Economic Growth
4 A Model of Production
5 The Solow Growth Model
6 Growth and Ideas
7 The Labor Market, Wages, and Unemployment
8 Inflation
9 An Overview of the Short-Run Model
10 The IS Curve
11 Monetary Policy and the Phillips Curve
12 Stabilization Policy and the AS/AD Framework
13 The Global Financial Crisis: Overview
14 The Global Financial Crisis and the Short-Run Model
15 The Government and the Macroeconomy
16 International Trade
17 Exchange Rates and International Finance
18 Parting Thoughts




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Chapter 17: Exchange Rates and International Finance

Study Plan

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This chapter addresses the role of exchange rates and international finance in macroeconomics. How are nominal and real exchange rates determined, in both the short run and the long run? What is the key role played by the law of one price in determining exchange rates? How do we incorporate exchange rates and a richer theory of the open economy into our short-run model? How can we understand international financial systems, including the gold standard, the Bretton Woods system, and the current system of floating exchange rates? What lessons can we learn from recent financial crises in Mexico, Asia, and Argentina?


  1. Read the assigned sections from Chapter 17 in your print text or ebook and review the numbered “Summary” points that concludes each chapter This concept summary section highlights the key ideas that you will read about in the chapter.
  2. Read and print-out the Chapter Outline to bring to lecture and use it for note-taking. Check items that your instructor covered in class.
  3. Use the Vocabulary Flashcards to test your memory of the key terms in the chapter. You can even shuffle cards from earlier chapters if you’re trying to study for a test.


  1. Read the Chapter Summary to review key ideas presented in the assigned reading.
  2. Take the Diagnostic Quiz to assess your understanding of basic concepts.  Examine the diagnostic quiz feedback, then review your notes and re-read sections in your textbook or ebook that correspond to questions you missed.
  3. Answer the Review Questions and submit your answers to the Norton Gradebook for your instructor to review and grade.


  1. Watch the Concept Tutorial Animations to get step-by-step explanations and derivations of the most important macroeconomic models and concepts presented in the text.
  2. Use the Data Plotter to see how various sets of real macroeconomic data are modeled and represented in graphical form.
  3. Access the Country Snapshots document to complete the end-of-chapter exercises in the text.
  4. Work the end of chapter Problems assigned by your instructor. If your instructor has assigned SmartWork online homework, click here.