Technique and ability alone do not get you to the top it is the willpower that is the most
important. This willpower you cannot buy with money or be given by others it rises from your
heart." Junko Tabei after becoming the first woman to climb Everest in
Macroeconomics Final Exam Review
LO1: Explain the circular flow.
LO2: Identify the components of GDP
LO3: Describe the steps from GDP to income
LO4: Calculate real and nominal GDP
LO5: List the phases of the business cycle
LO6: Discuss the rela
Notes: Chapter 8 Why do Economies Grow?
8.1 Economic Growth Rates
Capital deepening: Increases in the stock of capital per worker.
Think: Bathtub Model
Technological progress: More efficient ways of organizing
economic affairs that allow
Chapter 6 Starting with inflation
Learning Objectives 4, 5 and 6
LO4: Discuss how the Consumer Price Index is calculated
LO5: Explain the difference between inflation and the price level
LO6: Summarize the costs of anticipated and unanticipated
In 0. C.‘>‘> A. A A. J ‘0 $4.0 on 0.1;! l 04‘ A h.
u.‘0 £11.! t a; 0.00 .L .’ H
OAILOANK AA '\ aau A.“
r a a; If 0 A. ’
ICQCIO a. o .0 . I: ’ "' -1. I. l .-
IJAOJ: .n- .' Prue- ‘; V“ 1 ‘
21.; a. , a f ’n'
I Ln“ (1 " 3 '10 avo.’ . a N,
17/ @74- . na' ’ ' J
COST OF LIVING ADJUSTMENT: cost of keeping a certain standard of
living, COLA, PRICES= INFLATION, FIXED INCOME, ELDERLY OR RETIRED,
keep your income in par with your cost of living.
CPI : Consumer Price Index: Compare prices between a certain
base year an
Exam# 2 Study List what you have or must to know?
Keynesian economics page 240 The general theory of employment, interest and
money. The main cause of the great depression of the 1920s was insufficient aggregate
demand for goods and services. A typical ca
Chapter 11 Notes: Poverty and Inequality
Chronic Poverty: - Hunger, undernourished, no drinking water,
Most poverty in Latin America is in reference to the lack of
education in the communities of rural areas and urban areas
Increases in input prices such as higher wages or higher comrnodity prices (oil, wheat, rice, steel, etc.)
tlre short run aggregate supply curve upwards.
The short run aggregate supply curve downwards'
The shorl run aggr
credit. This urru-", that it i: the correit
Cheating is prohibited. Good luck.
(1) A person who has graduated
from high school earns a wage but another person who has graduated
from college with an undergraduate degree has ajob that
Classical model- economic models that assume wages and prices adjust freely to changes in
demand & supply
Crowding in-the increase of investment (or other component of GDP) caused by a decrease in
Crowding out- the decrease of investme
fiscal policy-Changes in government taxes and spending that affect the level of GDP.
expansionary policies-Government policy actions that lead to increases in aggregate demand
contractionary policies-Government policy actions that lead to decreases in agg
Pf=f(k,L) factors of production
K=level of capital
Marginal product of labor-additional output generated from each new hire
On the short run:
Hire more labors-firm will experience law of diminishing return cause k
Macroeconomics analyzes a nations economy, unemployment, inflation, and economic growth
GDP-Gross Domestic Product
Its product and output
ITs the total market value of all goods and services produced domestically in a given year
*When measuring GD
Resources an economy needs
Natural-coal, wood, water
Will the business succeed?
The technology that is used
Will the business earn income?
What generates economic growth?
Capital deepening-employing more capital per worker
Each workers shoud generate more output so that GDP increases
Technology that the firms have to spend on resarouch and development
Labor force is the total amount of people that are employed
Unemployment rate=(ppl looking for work/labor force)x100
CPI: Consumer price index-> Consumers produce
PPI-Producer price index -> Firms intermediate goods
What is Economics?
What products a firm should produce?
What resources are available to manufacture?
What consumers should buy and how many should they buy?
Generally, economics are business decisions based on the scarcity of resourc