Macroeconomics Chapter 1
Good vs Bad Economists
o Bad: focus on what is seen and the short-run effects
Every policy will provide us some benefit- focus on the benefit side
o Good: consider and think about the seen but understand the unseen or the
Macroeconomics Chapter 9
Monetary policy- money supply
Structural policy- rules of the game
o goods and services- market for output (all final goods and services
that are produced)
o loanable fund
Macro Chapter 10
Factors that shift aggregate demand
o Change in real wealth
Increases during expansion
o Shift right (outward)
Decreases during recession
o Shift left (inward)
o Change in real interest rate
Increase- decreases b
Problem 24.1 - Measuring output and income
Suppose the government's national income and product
accounts reveal the following information:
Personal consumption expenditures
Gross private domestic investment
Consumption of fixed ca
Chapter 17/Money Growth and Inflation 199
Chapter 15/Unemployment and Its Natural Rate 149
Chapter 11/Measuring the Cost of Living 45
Chapter 10/Measuring a Nations Income 21
Chapter 15 Quiz
1. In the twentieth century, fluctuations in real GDP were
a. less severe during the last 50 years than was true during the first half of the century.
b. virtually eliminated as the result of the countercyclical application of fiscal polic
Study Guide to Exam #1
Who is Adam Smith?
Be able to describe the three types of resources available in an economy
Understand the difference between scarcity and poverty
Objective versus Subjective situations
Chapter 2 Quiz
1. Which of the following sayings best reflects the concept of opportunity cost?
a. "You can't teach an old dog new tricks."
b. "Time is money."
c. "I have a baker's dozen."
d. "There's no business like show business."
2. If an economy is o
Chapter 1 Quiz
1. What do economists mean when they state that a good is scarce?
a. There is a shortage or insufficient supply of the good at the existing price.
b. It is impossible to expand the availability of the good beyond the current amount.
Chapter 4 Quiz
1. Other things constant, a decrease in the demand for hair dryers will
a. increase the price of hair dryers.
b. increase the quantity supplied of hair dryers.
c. increase the demand for hair dryer manufacturing workers.
d. decrease the dem
The Cold War was the protracted ideological, geopolitical, and economic struggle that
emerged after World War II between the global superpowers of the Soviet Union and
the United States, supported by their military alliance partners. It lasted fr
The Cold War was the protracted ideological, geopolitical, and economic struggle
that emerged after World War II between the global superpowers of the Soviet
Union and the United States, supported by their military alliance partners. It lasted
Chapter 9 Macroeconomics Notes
4 Major Macroeconomic Markets
Goods and Services
o Things that get produced
o Demand comes from households
o Supply comes from firms
o Price = Price Level
3 Reasons the Aggregate Demand Curve Slopes Downward (?)
A lower p
Chapter 7 Quiz
1. Which of the following would be included in this year's GDP?
a. the value of a used car, at its sale price
b. the value of a new domestic automobile, at its sale price
c. a sale of Microsoft stock from one individual to another
d. the fa
Chapter 13 Macro Notes
The channel through which monetary policy affects the
economy is the loanable funds market.
An independent agency (central bank-The Federal Reserve for the
U.S.) sets monetary policy.
o Central Bank: a bankers bank
If youre worri
Macroeconomics Chp. 2 Notes
The Importance of Trade
Trade is positive sum.
There is a view that trade is zero sum or negative sum.
o Comes from mercantilists and the Marx view.
o Based on the view that value is objective.
Anytime there is a trade, both
Chapter 8 Quiz
1. Over the past century, the growth rate of real GDP in the United States has averaged approximately
a. 1 percent.
b. 3 percent.
c. 6 percent.
d. 10 percent.
2. Economists use the term "business cycle" to refer to
a. the growth of small bu
Chapter 10 Quiz
1. Which of the following would be most likely to cause an increase in current aggregate demand in the
a. increased fear that the U.S. economy was going into a recession
b. an increase in the real interest rate
c. sharp incr
Macroeconomics Chapter 11 Notes
Macroeconomics didnt develop until the Great Depression.
LR View: even if there is some sort of recession or disequilibrium,
eventually prices will adjust and return to some long-run outcome
Says Law (Jean B
Chapter 10 Macroeconomics Notes
The only thing that can lead to a change in quantity of aggregate
demand is a change in price.
Factors that Lead to a Change in Aggregate Demand:
o Change in real wealth
o Changes in the real interest rate
o Changes in ex
Chp. 14 Macro Notes
Final Exam: 60% Chapters 11-15, 20% First Test,
20% Second Test (85 questions)
Monetarists: argued monetary policy has significant influence
on slowing and increases
o Where monetary policy can have an effect is in the short
Principles of Macroeconomics
Chapter 10 Macro HW
1. a) Decreases aggregate demand because a fear of recession would
discourage people from investing.
b) Increase aggregate demand because an increased fear of
Macroeconomics Chp. 1 Notes
Father of Economics
Author of Wealth of Nations
Why are some countries rich and others are poor?
o (1) Culture
o (2) Resource Curse
o (3) Democracy
o (4) Institutions Formal rules, written rules, for
Chapter 11 Quiz
1. Which of the following would a Keynesian economist be most likely to stress?
a. Supply creates its own demand.
b. Businesses will not produce goods and services if they do not think people will buy them.
c. You cannot spend your way out
Chapter 13 Quiz
1. Money is
a. valuable because it is backed by gold.
b. whatever is generally accepted in exchange for goods and services.
c. anything that is a liability of a commercial bank
d. an object to be consumed.
2. In the United States, the purc
Chapter 9 Quiz
1. Which of the following is a correct statement?
a. Fiscal policy is the use of tax and spending policies by Congress and the president.
b. Fiscal policy involves the control of the money supply by the Federal Reserve Bank.
c. Monetary pol