Midterm2review - Chapter 8: This chapter starts the...

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Chapter 8: This chapter starts the development of our model of the macroeconomy. It introduces the ADAS model that we will use throughout the rest of the course and discusses what it means for macroeconomic equilibrium to occur either below or above full-employment. In many ways, this is the key chapter to the text, because it sets up much of what we will do in later chapters. Important topics: What are the differences in the general views of the classical economists, the Keynesians, the monetarists, and the supply-siders? Classical: Keynesians: Monetarists: Supply-sider: What is the business cycle? Why is it important to understand? What is the difference between real GDP and nominal GDP? Real GDP: Nominal GDP: What is aggregate demand? What is aggregate supply? How do they interact to determine macroeconomic equilibrium? Aggregate demand: Aggregate supply: How they interact: What are the effects related to AD and AS? AD: AS: What is full-employment? Why is it important? What causes a recession? What can “we” do to come out of it? Why? What causes inflation? What can “we” do to reduce it? Why?
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Chapter 9: This chapter discusses the AD curve in more detail. This is important because several of the tools “we” have for attempting to improve economic performance depend on “our” ability to create shifts in the AD curve (I say “we” and “our” because us citizens do not actually do anything, instead as we learn in later chapters, the federal government and the Fed do). To understand why, we need to understand the underlying components of the AD curve itself. Important topics:
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This note was uploaded on 02/14/2012 for the course ECON 20913 taught by Professor Rogerfrantz during the Fall '10 term at San Diego State.

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Midterm2review - Chapter 8: This chapter starts the...

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