imilar to the Fed's — and averted a potential Lehman-like collapse in Europe. (Mitt Romney's two most prominent academic advisers, Glenn Hubbard and Gregory Mankiw, seem to recognize this, but Romney apparently doesn't. As recently as August the Republican presidential nominee repeated his criticisms of the Fe

Figure 1.3.1 above shows a simple macroeconomic model of an economy. This model is taken from figure 1 of chapter 2 of 'Principles of Economics', by Gregory Mankiw [Mankiw 2004]. Figure 1.3.2 below shows a modified version of the diagram. The two 'markets' between the firms and households have been removed, in