TOPICS FOR MACROECONOMICS TESTS

TOPICS FOR MACROECONOMICS TESTS - TOPICS FOR FINAL EXAM:...

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TOPICS FOR FINAL EXAM: MACROECONOMICS PROFESSOR KENKEL Factors of production: land labor, capital, entrepreneurship What is meant by rational economic behavior Positive and Normative statements Common Errors in Economic Reasoning 1. Fallacy of false cause 2. Fallacy of composition 3. Ceteris paribus fallacy (other things being equal) What is meant by fiscal policy; monetary policy Employment Act of 1946 Major Macroeconomic policy goals in the United States 1. Price stability 2. Full employment 3. Economic growth 4. Stabilize the business cycle Phases of the business cycle Recession or depression, trough, expansion, peak Importance of John Maynard Keynes The General Theory of Employment, Interest and Money, 1936. Adam Smith and the Invisible Hand; advantages of specialization Wealth of Nations, 1776 Production possibilities frontier Assumptions 1. Fixed resources 2. Fixed technology 3. Full employment of resources Law of increasing costs - diminishing marginal returns Economic growth shifts the frontier Technological advance shifts the frontier Capital goods vs. consumption goods; present consumption versus future growth Defense goods vs. consumption goods Opportunity cost Comparative advantage Types of economic systems: characteristics Laissez faire Capitalism Command economy Socialism Barter Economy requires double coincidence of wants The role of profit in the economy The role of prices in the economy Forms of business enterprise: advantages and disadvantages 1. Sole proprietor 2. Partnership 3. Corporation
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Limited and unlimited liability Corporate income taxes and double taxation of profits
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TOPICS FOR MACROECONOMICS TESTS - TOPICS FOR FINAL EXAM:...

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