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Easy Economics: A Visual Guide to What You Need to Know

ISBN: 978-1-118-11806-1
252 pages
November 2011
Easy Economics: A Visual Guide to What You Need to Know (1118118065) cover image


Let's face it, economics can be boring…but we all need a decent understanding of the basics if we want to survive in these difficult and uncertain times. Let's make it more interesting. Easy Economics isn't packed with reams of text or stacks of numbers, this book is visual and engaging. The book aims to bring you up to speed, in a way that entertains while it informs, through a collection of many of the most frequently asked questions--plus some you probably haven't thought of--on the subject of economics. The topics range from:
  • The difference between Debt and Deficit
  • Causes and cures of recessions
  • The Financial Crisis of 2007-2009 explained
  • Is globalization good or bad?
  • How fiscal and monetary policies differ
  • Bubbles and Busts

Unlike so many other books on the subject, it explains through a Q & A format with entertaining and informative illustration, providing material that many people ordinarily find uninviting and even intimidating in an easy-to-digest, appealing way.

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Table of Contents

Chapter 1: MONEY page 10
It's fairy dust, but because we believe in it, it works

What happened before there was money?
When did barter become popular?
Isn't barter an awkward way to trade?
How did traders get around that complication?
When did coins appear?
Who decides what money is?
When did paper money begin?
What did early Americans use for money?
How did we get to the dollar bill?
If it isn't backed by gold, what makes the dollar mighty?
When did checking accounts start?
Why did electronic money catch on?
Will paper money disappear?
Whatever happened to barter?

Chapter 2: BOOMS & BUSTS page 42
As smart as they are, the pros can't remove all the bone-rattling bumps

What do the experts mean when they say the economy is doing well or is doing poorly?
What makes up the GDP?
What makes the GDP grow?
When is the economy booming?
Why is overheating bad?
What's productivity?
How does an overheated economy cool down?
Is that what causes a recession?
What is deflation?
How do you end a recession?
How long can a bust last?

Chapter 3: TAXING & SPENDING page 66
Policy makers often argue over which is a better steering wheel

What is fiscal policy?
Who controls tax policy?
Where do taxes come from?
How come the rich get away without paying taxes?
What's a flat tax?
What's a consumption tax?
Who decides how to spend money?
How can government spending increase GDP and employment?
Does it work?
Can government cut taxes to speed up the economy?
Can government increase taxes to slow down the economy?
What's the bottom line? Are government spending and taxing good ways to fix a troubled economy?

Chapter 4: GETTING INTO DEBT page 92
It’s been around from the beginning, but the cause has become more worrisome

What’s the difference between deficit and debt?
How can the U.S. spend more money than it takes in?
Should the government ever borrow?
When is borrowing wrong?
How much debt is too much?
How long can the U.S. get away with this?
Do we need a balanced budget amendment to the Constitution?
So how do we get out of this mess?
What are entitlements?
So will Social Security be eliminated?

Chapter 5: THE FED page 114
This very powerful institution performs a kind of magic

If the Federal Reserve can't prevent banking failures, who needs it?
So what does the Fed do?
What's monetary policy?
Why not just make as much money available as people want?
How does the Fed set monetary policy?
How does the Fed increase and decrease the amount of money available in the economy?
Where does the Fed get the money to buy bonds?
So the Fed doesn't print money?
How does the Fed destroy money?
But where does it go?
How does the Fed's buying bonds on Wall Street increase the amount of money in the pockets of ordinary consumers and businesses?
Does the Fed's selling government bonds on Wall Street decrease the amount of money in the pockets of ordinary consumers and businesses?
How does the Fed influence interest rates?
What's the Fed funds rate?
Does the Fed have any control over rates on longer loans, such as car loans and mortgages?

Chapter 6: HIGH-FLYING FINANCE page 174
The Wall Street elite can make the planet tremble

Who were the first financiers?
How did Wall Street and big-time finance get started?
How do big companies finance themselves today?
How do new high-tech companies get financed?
What caused the financial crisis of 2007-2009?
What is leverage?
How do you "short" a stock?
What are hedge funds?
What are private equity funds?
What are derivatives?
Why do derivatives have a bad name?
What's a speculative bubble?

Chapter 7: GLOBALIZATION page 202
Nowhere to hide: Everywhere is connected to everywhere else

What is globalization?
Can Americans own and operate companies overseas?
What are financial and capital flows?
Is globalization good or bad?
How does trade affect inflation?
What is the balance of trade?
Must a country be in balance with every trading partner?
What happens when a country runs a trade deficit?
What is the balance of payments?
Is it bad for a country when its currency is cheap?
Do countries manipulate currencies to keep them cheap?
What does the World Trade Organization do?
What's the World Bank?
What's the International Monetary Fund?
What is the G-20?
What is the World Economic Forum?

Ripples and Waves page 236
What happens next? How to anticipate the possible consequences of economic events

Key Words and Phrases page 240
A glossary to help you understand a complex economic world

Index page 250

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Author Information

Although they didn't know each other at the time, Leonard Wolfe and Lee Smith were both students at Yale together: Smith as an undergraduate, and Wolfe as a graduate student. Eventually they worked together at Fortune, where Wolfe was an art director and Smith a senior writer/editor who served as Fortune's bureau chief in both Tokyo and Washington.

Stephen Buckles, who served as the book's economics consultant, has had a distinguished career in economics education and currently teaches economics at Vanderbilt University.

Roy Doty, whose charming illustrations grace these pages, is considered one of this country's finest cartoonists, and his work has appeared in almost every major publication in America.

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Press Release

January 24, 2012
Easy Economics Clarifies the Important Economic Issues of the 2012 Presidential Debate

Book Uses a Collection of Uncomplicated Questions, Answers and Illustrations to Help Explain a Complex Economy


This election year is one that is going to make economics more important than it’s been in any presidential election in two decades. It was in 1992 that candidate Bill Clinton’s advisor James Carville offered this head-clearing advice “It’s the economy, stupid!” Well, it’s the economy again.

How do voters follow the debates among the candidates as they tussle over what makes the economy grow? How can people evaluate their plans for reducing unemployment? How do we separate facts about taxes and spending from nonsense?  There is no better primer for understanding the fundamentals than Easy Economics; A Visual Guide to What You Need to Know (Wiley, Paperback and e-book, 978-1-1181-1806-1; $27.95).

The book, by former colleagues at Fortune magazine Leonard Wolfe and Lee Smith, economics consultant and Vanderbilt University professor Stephen Buckles and illustrator Roy Doty, bring readers entertaining and informative answers to many of the most frequently asked questions on the subject of economics through a collection of easy-to-digest questions and answers and illustrations.

The book clarifies the basics behind the important issues that will be discussed by all candidates this election year, such as:

  • What goes into GDP and how fast should it be growing?
  • What’s an acceptable unemployment rate?
  • How long can a recession last? Who controls tax policy?
  • How do the rich get away without paying taxes?
  • How much debt is too much?
  • Do we need a balanced budget amendment to the Constitution? 
  • Will Social Security be eliminated?
  • And much more including chapters on the history of money; how the Fed works; the sorry tale of the high-flying finance that caused the real estate and financial collapse of 2007-2009; and a handy glossary of all the terms you’re likely to hear in this highly-charged year.

Unlike other economics books, Easy Economics isn't packed with reams of text or stacks of numbers. It informs readers of the things everyone needs and ought to know about economics and does so with easy-to-understand content that makes exploring the subject enjoyable.

For an example of the Q&A format and related illustrations, please see several sample pages from one of the chapters in the book here.

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