Economics is a living discipline, changing and evolving in response to developments in the world economy and in response to the research of many thousands of economists throughout the world. Through eighteen editions, this resource has evolved with the discipline. Our purpose in this edition, as in the previous seventeen, is to provide students with an introduction to the major issues facing the world’s economies, to the methods that economists use to study those issues, and to the policy problems that those issues create.

Hallmark features of this title

• Current. Economic growth, financial crisis pandemics, globalization, and the role of government are pressing issues of the day. Much of our study of economic principles and the Canadian economy has been shaped by these issues. In addition to specific coverage of growth and internationally oriented topics, growth and globalization appear naturally throughout the book in the treatment of many topics once thought to be entirely “domestic.”
• Global. Enormous changes have occurred throughout the world over the last few decades. Flows of trade and investment between countries have risen so dramatically that it is now common to speak of the “globalization” of the world economy. Today it is no longer possible to study any economy without taking into account developments in the rest of the world.
• Free Markets. Has the fundamental role of government changed significantly over the past 40 years? In order to understand the role of government in the economy, students must understand the benefits of free markets as well as the situations that cause markets to fail. They must also understand that governments often intervene in the economy for reasons related more to equity than to efficiency.

GenAI Study Tool

We’ve heard how important it is for students to use reliable AI tools in responsible and productive ways. To that end, Pearson is focused on creating tools that combine the power of generative AI with trusted Pearson content to provide students with a simplified study experience, delivering on-demand and personalised support that compliments your teaching and aligns with the text you’ve chosen. The Study Tool is available to students who access the Pearson eText on its own or through MyLab.

What can the AI Study Tool do?

• Generate simplified explanations of challenging sections
• Summarize material to help learners focus on key topics and ideas
• Students can ask for multiple choice or short answer questions related to a specific chapter or section to help fill knowledge gaps
• For extra practice, students can also generate flashcards and notes based on their chat interaction with the tool

New and updated features of this title

• Part 1: What Is Economics? In Chapter 1, we have added two new “hot” topics in the chapter opener: rising housing prices and the challenge of Indigenous Reconciliation. We have also added a few paragraphs early in the chapter to clarify how we will use the terms of “advanced” and “developing” economies throughout the textbook. In the discussion of scarcity, we have added an example of the problem of growing scarcity of water, and this leads to a new “Policy Briefing” podcast—the first topic in a new collection of podcasts examining a range of contentious policy issues.
• Part 4: The Economy in the Long Run. In Chapter 9 on the macroeconomic adjustment process, we have clarified the explanation of the Y* locus and have removed the detailed empirical discussion and graph of the Canadian Phillips Curve. This discussion proved to be too complicated for an introductory textbook. We have also clarified the discussion of automatic fiscal stabilizers. Our discussion of fiscal policy now leads to a Policy Briefing podcast that addresses the issue of whether government spending can “create jobs,” and under what conditions.
• Part 5: Money, Banking, and Monetary Policy. Chapter 13 provides a detailed discussion of Canadian monetary policy. When discussing how the Bank of Canada targets the overnight interest rate, we have modified our treatment to incorporate recent changes in the Bank’s policy, whereby it pays interest on reserves at the overnight rate and charges the bank rate on any loans to commercial banks. The “target range” is now only 0.25 basis points wide, with a floor at the target for the overnight rate.
• Part 6: Macroeconomic Problems and Policies. Chapter 14 examines inflation and disinflation in detail.While there have been no major changes in the structure of this chapter, the inflation that we witnessed in the immediate post-pandemic period is reflected in the discussion. In our final discussion of the costs of reducing inflation, we direct the reader to a Policy Briefing podcast on the age-old debate over the benefits of reducing inflation versus the (temporary) costs of raising unemployment.