Focus Topics for Test#6-Wednesday, April 14th ‘04

 

Study and know very well the following topics:

 

Topic#1-Miscellaneous Themes

 

·          The ten (10) principles of economics and the three (3) categories into which they are organized

 

·          Study and know how to calculate slopes of demand and supply curves and the meanings of positive vs negative vs vertical and horizontal slopes (Study the Mathematical Appendix in your Textbook)

 

Topic#2-The Keynesian Income-Expenditure Method

 

·          Definition of AD in an economy

 

·          Definition of AS in an economy

 

·          Definition of macroeconomic equilibrium

 

·          Definition of macroeconomic disequilibrium

 

·          Definition and examples of injection variables in closed and open Keynesian models

 

·          Definition and examples of leakage variables in closed and open Keynesian models

 

·          Identification of cause of economic downturn in Keynesian models

 

·          Definition of Keynesian consumption function

 

·          Definition of Keynesian saving function

 

·          Definitions of MPC and MPS in an economy

 

·          Definition and significance of dis-saving

 

·          Identification of endogenous and exogenous variables in Keynesian models

 

·          Definition and significance of multiplier in Keynesian models

 

·          Calculation of the multiplier in a simple Keynesian macroeconomic model-Y= C+ I

 

·          The effect of multiplier on autonomous macroeconomic aggregates

 

·          Computation of short-run GDP or national income in open and closed Keynesian models

 

Topic#3-Inflation

 

·          Definitions of inflation and deflation

 

·          Difference between inflation and deflation

 

·          Difference between inflation and the rate of inflation

 

·          Difference between deflation and the rate of deflation

 

·          Definitions of the rate of inflation and rate of deflation

 

·          Computation of the rate of inflation and rate of deflation

 

·          Interpretation of the rate of inflation and rate of deflation

 

·          Definition and differences between the following types of inflation:

 

·          Creeping or moderate inflation and galloping inflation

 

·          Creeping or moderate inflation and hyperinflation

 

·          Galloping inflation and hyperinflation

 

·          Identification of the causes of inflation

 

·          Definition of demand-pull inflation

 

·          Definition of cost-push inflation

 

·          Identification of the causes of inflation (Be able to identify the factors that cause inflation in an economy)

 

·          Identification of the consequences of inflation in an economy (Be able to identify the factors that cause inflation in an economy)

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