Study_Guide_for_Test_3 - Study Guide for Test 3 Chapter 10...

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Study Guide for Test 3 Chapter 10 1. Be able to do problems like question 3 on ‘Second Chance Chapter 10 Problem Set’ on Aplia (week 10). There are at least six problems on the test that pertain to that set of questions. 2. Memorize the formula for the spending multiplier (1/(1-mpc) 3. Understand the relationship between the AE curve and the Aggregate Demand curve (Study 10F and 10G) 4. Be able to determine how a change in any of the parameters of the AE equation affects the graph of the AE curve and the graph of the AD curve. (10B, 10C, 10D, 10F, and 10G). 5. Thoroughly understand the 45-degree line diagram – 10C, 10D, and 10E. Chapter 11 1. Be able to identify a contractionary or expansionary gap in a diagram of the AD, SRAS, and LRAS curves. (Study 11D) 2. Be able to explain how the self-correcting mechanism works to close an output gap. (See class notes from Monday, November 3. This is also explained in your textbook on pages 236-243. Practice these concepts by doing 12A, Part A #7 and 12A, Part B #13.
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This note was uploaded on 10/20/2010 for the course ECON 101 taught by Professor Ohler during the Fall '08 term at Washington State University .

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Study_Guide_for_Test_3 - Study Guide for Test 3 Chapter 10...

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