StudyGuide3%281%29

StudyGuide3%281%29 - Prof. Andrea Civelli International...

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Prof. Andrea Civelli International Macroeconomics and Finance Short Study Guide for the preparation of Test 3 The third test is going to cover the material presented in the slides in Lecture 6, 7, and 8 that are posted in Blackboard. These refers to Chapters 9, 10, and 11 (see below for more details). After the consumption function, Chapter 9 brings into the picture the aggregate demand and the Keynesian cross. This chapter is very important because it introduces a set of crucial concepts that we will use for the rest of the semester such as the multiplier and the definition of the gaps. Make sure you know and understand: 1. The definition of expenditure and how it is related to the consumption function. The exp/GDP diagram is the graphical device we have used to study the expenditure line and the (demand side) equilibrium GDP. Do not forget the role of the 45 degree line… 2. The difference between a shift of the expenditure line and a movement along this curve. What are the factors that affect the expenditure line? What is the slope of the curve?
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StudyGuide3%281%29 - Prof. Andrea Civelli International...

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