EXAM 3 REVIEW (224)

EXAM 3 REVIEW (224) - REVIEW EXAM 3 ECON 224 a Review...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: REVIEW EXAM 3 ECON 224 a Review Circular Flow Diagram (relationship between production and ' income) 9 Define Gross Domestic Product (GDP) 6 Real vs. Nominal GDP 0 Categories of GDP v 6° C+I+G+In 0 v C is the largest component o Fluctuations in GDP 0 v Peak, Trough, Expansion 93° Recession definition '9 Sustained increase in real GDP ——>—+Economic Growth 6 GDP and Welfare? V 6 M Outside markets ' M Underground economy ° _ Environmental issue 0 06 9 0 6 o Unemployment: Definitions . 6 9 s Unemployed Employed Labor Force ° Unemployment Rate 0 6 .0 6 °¢ ‘9 6’6 0 Types of Unemployment ‘ '2' Cyclical 01° Frictional 0 v Structural 0 Cost of Unemployment —->——>Op—portunity Cost » e atural Rate of Unemployment e a Full Employment—aaNot 0% ai-Labor Force Participation Rate a Define Inflation I a What is the CPI? 9 What is the inflation rate? 6 Cost of Inflation?———>——>Reality Principle '0 Aggregate Supply and Demand I 0 Consumption 0 Investment 0 Government spending 0 Net exports ?fl6fl ’ 6 Why downward sloping V 6 9 ° > Wealth effect ° Interest rate effect . 9 International trade effect 66 Q 66 6 9 a Shifts in Aggregate Demand? w Changes in money Supply v ' Changes in taxes 9° Changes in government spending Long-run ' Aggregate Supply Full employment Long-run equilibrium assumed to occur at full employment: Clssical Economists Short-run equilibrim need not be at full employment, John Maynard Keynes e What isfiscal policy? _ 6 What are the goals of fiscal policy? 9 EXPANSIONY FISCAL POLICY 0:6 TG ' 3% @ 6:0 o CONTRACTIONARY FL POLICY 1 Pee“; e DISCREATIONARY POLICY : ~e AUTOMATIC STABILIZERS 1% GOAL: Full- _ .04 employment Q _ _ _ _ _. _ _‘ _ _ _ _ _ _ .. “Lu-543‘s": Year I (A) Successful stabilization policy- can dampen fluctuations, ozs PROBLEMS o INSIDE LAGS' o OUTSIDE LAGS ...
View Full Document

This note was uploaded on 02/10/2011 for the course ECON 224 taught by Professor Ozturk during the Fall '09 term at South Carolina.

Page1 / 7

EXAM 3 REVIEW (224) - REVIEW EXAM 3 ECON 224 a Review...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online