MIME-Version: 1.0 Content-Location: file:///C:/51962312/review2.htm Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii" Intro Macro; Fall 2006: Review Guide for the SECOND EXAM

Intro Macro; spring 2009: Review Guide for the SECOND = EXAM

 

I.&n= bsp;            = ;      Long Run Economic Growth

a.&n= bsp;            = ;     the Rule of 70

b.&n= bsp;            = ;     sources of economic growth

c.&n= bsp;            = ;      the aggregate production function

d.&n= bsp;            = ;     productivity: measurement and importance

e.&n= bsp;            = ;     measures to increase capital, skill and resources per capita

 

II.&= nbsp;           &nbs= p;   Savings and Investment in a Closed Economy

            a.        =   GDP, public and private savings

a.&n= bsp;            = ;     closed economy: show why savings must equal investment

 

III.=              the Loanable Fun= ds Market

a.&n= bsp;            = ;     why people save

b.&n= bsp;            = ;     how people save

c.&n= bsp;            = ;      the supply curve of loa= nable funds

d.&n= bsp;            = ;     who borrows and why

e.&n= bsp;            = ;     the demand for loanable= funds

f.&n= bsp;            = ;       impacts of policies on the loanable funds market

 

       IV.<= span style=3D'mso-spacerun:yes'>     Unemployment

   &nbs= p;              a.        Measurement: UR, LFPR …<= /p>

   &nbs= p;              b.        Trends in labor force participation

        =           c.        Spells and duration of unemployment

        =           d.        Unemployment, by type

   &nbs= p;            &= nbsp;           &nbs= p;       1.         = Frictional

   &nbs= p;            &= nbsp;           &nbs= p;       2.         = Structural

   &nbs= p;            &= nbsp;           &nbs= p;       3.         = Cyclical (for each identify and suggest remedies)

   &nbs= p;              e.&= nbsp;     Issues in unemplo= yment: Minimum wages, job search, efficiency

   &nbs= p;            &= nbsp;           wages.

 

        V.       Money

        &= nbsp;         a.     Functions and ty= pes of money

        &= nbsp;         b.     Definitions of <= st1:country-region w:st=3D"on">US money supply: M1, M2,...

        &= nbsp;         c.      the “FED”

        &= nbsp;           &nbs= p;           &= nbsp;   1.         = policy tools: OMO, reserve requirements, discount rate=

        &= nbsp;           &nbs= p;            &= nbsp;  2.         = federal funds rate

        &= nbsp;         d.      fractional reserve banking

        &= nbsp;           &nbs= p;           &= nbsp;   1.         = how it works

        &= nbsp;           &nbs= p;           &= nbsp;   2.         = the simple money multiplier

        &= nbsp;           &nbs= p;           &= nbsp;   3.         = currency drain and other leaks

 

        VI.    INFLAT= ION

        &= nbsp;          a.       Level of prices and the value of mo= ney

        &= nbsp;          b.       The money market: demand, supply and equilibrium

        &= nbsp;           &nbs= p;           &= nbsp;   1.         = changes in demand or supply and impacts

        &= nbsp;           &nbs= p;           &= nbsp;   2.         = the money adjustment process

        &= nbsp;           c.     <= span style=3D'mso-spacerun:yes'> The “Classical Dichotomy̶= 1;

        &= nbsp;           d.     Q= uantity theory of money

        &= nbsp;           &nbs= p;           &= nbsp;   1.         = velocity

        &= nbsp;           &nbs= p;           &= nbsp;   2.         = equation of exchange

        &= nbsp;           &nbs= p;           &= nbsp;   3.         = money and the price level

        &= nbsp;           e.     I= nflation taxes and the fisher effect

        &= nbsp;           f.      The social= and private costs of inflation

        &= nbsp;           &nbs= p;           &= nbsp;   1.         = resource allocation, menu costs and shoe leather costs

        &= nbsp;           &nbs= p;           &= nbsp;   2.         = expected versus unexpected inflation