Exam 3 Study Guide Part 2
Demand pull inflation =
o AD increases, RGDP increases, inflation increases.
Stagflation = decrease in RDGP, possible recession and increase in inflation.
o Inflation + economic stagnation.
Expansionary fiscal policy =
Chapter 11: From Deficit to Debt
Federal Debt =
Similar to a hole in the ground that you dig yearly, the hole is the debt.
Cumulative hole we are digging by getting years and years of deficits.
Federal Deficit =
The amount of dirt that you take out each y
ECO 2030: Video Notes Chapter 1
Rational Maximizing Notes
The main idea is that the individuals or businesses should make the best choice that gives
them the best economic wellbeing.
Economics covers everything we do
Makes core assumptions
o We are all se
Chapter 3 Movie Notes
The Supply Curve: upward sloping line
Graph Price on the vertical axis and quantity on the horizontal axis
Amish people in the movie selling cows will simply take the cows off the market
if the price is around $500 because it costs
Monetary Policy Questions
1. What is monetary policy?
Monetary policy is the process by which the Federal Reserve determines the
supply of money to the economy and the interest rates at which that money is
supplied. The purpose of monetary policy is to pr
Social Sciences General Education Assessment Prompt
Some of the most consequential individual or social behaviors studied
by economics are the laws of supply and demand as well as their
determinants. All three of these concepts relate heavily to econom
NGDP = C + I + G + NX = consumption (consumer spending) + investment +
government spending + net exports
RGDP = NGDP/ Price Index (PI)
Net Exports (NX) = trade balance = X M NX > 0 trade surplus; NX < 0,
Inflation Rate = P% = 100*(PI this y
Full Multiplier = chng AD/chng spend = 1/mps = 1/(1-mpc)
mpc + mps = 1
mpc = chng consumption/chng GDP
mps = chng spending/chng GDP
apc + aps = 1
apc = consumption/gdp
aps = spending/gdp
Y = disp. Inc. or GDP
Determinants of Aggregate Demand:
o Direct re
Information for Exam
Bring calculator GDP, rule of 70, multiplier effect
9 by 11 paper
If exchange rates increase in value:
o The price of imports to be cheaper
o The price of exports will be higher
o Imports would have a hig