1020 exam 3 study guide fall 2016 - Jacob Randall 872842050 Study Guide ECON 1020 Exam 3 Chapter 23 Aggregate Expenditure and Equilibrium Output Explain

1020 exam 3 study guide fall 2016 - Jacob Randall 872842050...

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Jacob Randall 872842050 Study Guide – ECON 1020 Exam 3 Chapter 23: Aggregate Expenditure and Equilibrium Output Explain the principles of the Keynesian theory of consumption Explain how equilibrium output is determined
Jacob Randall 872842050 Describe the multiplier process Chapter 24: The Government and Fiscal PolicyFiscal policy Gov spending and taxing policies Monetary PolicyBehavior of federal reserve on interest ratesFederal surplus or deficitFed gov receipts minus expendituresDiscuss the influence of fiscal policies on the economyDescribe the effects of three fiscal policy multipliers
Jacob Randall 872842050 1/MPS Impact on Y Delta G x 1/MPS Tax multiplier multiplier -(MPC/MPS) Impact on Y Delta T x –(MPC/MPS) Balanced budget multiplier Multiplier 1 Impact on Y Delta G or Delta T because delta G= delta T Compare and contrast the federal budgets of three US government administrations Clinton Increased fed income taxes (max 13%) Same with national debt Bush Lowere fed icome tax (min around 9%) Same for debt Obama Increased fed income tax (about 10%) Same for debt Explain the influence of the economy on the federal government budget Automatic stabilizers Chapter 25: Money, the Federal Reserve, and the Interest Rate Define money and discuss its functions o Money Means of payment or mediums of exchanges What sellers accept Bartering required double coincidence of wants o Store of value

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