Intermediate Macroeconomics Review for EXAM 1 Spring 2011 Chapter 2 National Income Account a. What counts toward GDP b. What are left out from GDP measurement c. Define nominal and real GDP. Why the differences between nominal and real GDP are important? d. Calculate Nominal GDP, Real GDP, and GDP deflator. e. Define the GDP price deflator. How does it related to nominal and real GDP? f. Define the CPI. Compute the cost of market basket, compute CPI, and inflation. g. Which one is the Laspeyres index and which one is Paasch index? h. How does the GDP price deflator differ from the consumer price index (CPI)? i. Define unemployed vs. out of labor force j. Calculate unemployment rate and labor force participation rate. Chapter 10 (until p. 301) IS curve and the Good Market: a. Keynesian-cross model: i. What is the planned expenditure? ii. What does 45-degree line imply? iii. What is MPC? Relate MPC from the consumption function to the planned expenditure curve. iv.
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