final study guide - Macroeconomic Principles Final Exam Study Guide Dr Bryan C McCannon I Introduction A basic terms micro v macro definition of

final study guide - Macroeconomic Principles Final Exam...

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Macroeconomic Principles Final Exam Study Guide Dr. Bryan C. McCannon I. Introduction A. basic terms: micro v. macro, definition of economics II. Inflation A. Basic terms: inflation, inflation rate, deflation, disinflation, Laspeyres, base year , real variable, nominal variable B. Be able to calculate a fixed basket price index C. Be able to discuss measurement issues (ways to measure, potential problems, CPI) D. Be able to discuss intelligently the problems with inflation and the problems with deflation III. Money A. Know the definition of money B. Know the functions of money C. Know the types of money D. Know the measurements of money E. Be able to discuss intelligently why we need money (double coincidence of wants, comparable values, information) IV. Monetary Policy A. Know the basic history and structure of the Federal Reserve B. Know the primary functions/objectives of the FED – be able to discuss examples of each function C. Tools of Monetary Policy a. Be able to discuss discount lending b. Be able to discuss how the required reserve ratio affects money supply (including the money multiplier and fractional-reserve banking) c. Open Market Operations c.i. Know the structure of the FOMC c.ii. Be able to discuss in detail how the FOMC conducts monetary policy c.iii. Know the important issues regarding demand (demand, demand curve, Law of Demand, shifts in demand, individual vs. market demand,

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