Review Exam 3 spring 2008

Review Exam 3 spring 2008 - Understand how the three graphs...

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Review Exam 3 Chapter 17 Understand the effects of expected and unexpected inflation Chapter 18 Understand how an open economy impacts GDP and savings Understand what is counted in NCO Understand the relationship between NX and NCO Understand the relationship between Savings, Investment and NCO and what is true about these values if country runs trade surplus or deficit Understand the difference between nominal and real exchange rate and how they’re determined Understand the theory of purchasing power parity and the implication this has on the real exchange rate and the price of goods Chapter 19 Understand what makes up supply and demand for loanable funds in an open economy and how this determines the interest rate (and how changes in these values can change the interest rate) Understand the relationship between r and NCO Understand what makes up the supply and demand of domestic currency in the foreign exchange market and how they vary with the real exchange rate
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Unformatted text preview: Understand how the three graphs interact Understand how a change in deficits will effect S, I, r, NCO, NX and e Understand how trade polices affect S,I, NCO, r, NX and e Understand how changes in NCO affect S,I, r, NX and e Chapter 20 Understand the three facts of short run fluctuations Understand why the AD curve is negatively sloped Understand what will shift the AD curve Understand why the LRAS curve is vertical and what will shift it Understand how we can use the AD curve and LRAS curve to explain changes in GDP and inflation Understand why the SRAS curve slopes upward in the short run and why sticky wages are a big explanation for this. Understand how a change in AD will affect the economy in the short run Understand how the economy will adjust back to YN in the long run Understand how a change in SRAS would affect the economy in the short run and long run...
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This note was uploaded on 10/16/2008 for the course ECO 181 taught by Professor Cherry during the Spring '07 term at SUNY Buffalo.

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