1. Which of the following statements about price controls is correct?
a. Price controls are used to make markets more efficient.
b. Price controls are usually enacted when policymakers believe that the market price of a
good or service is unfair
1. What does the price elasticity of demand measure?
a. how responsive buyers are to a change in income
b. how responsive sellers are to a change in price
c. how responsive buyers are to a change in price
d. how responsive sellers are to a chang
1. If there is no trade, which of the following is most likely?
a. A country is better off because it will become self-sufficient.
b. A country's production possibilities frontier is also its consumption possibilities frontier.
c. A country can
9.1 Business Cycle
Alternate increase and decrease level of economic activity over several year
Peak: full employment, price level rise
Recession: output, income and employment, real GDP decline
Tough: output and employment at lowest level
Group Project 30 %
Students are requested to form their individual group with 6-8 students. The group member
should be in the same tutorial group. Every group needs to develop a Business Plan to a
Company in Hong Kong and prepare a written report with an
"China has been attempting to shift from an export-led
economy to a consumer and services-led one. In order to
restructure, the economy will face some downward
As a developing country, China engaged in manufacture and export at the past
In 1955 to 1973 Japan grow much faster than any other industrial
economy at the same time that called rapid economic growth.
There are 3 reasons.
First of all, corporate policy stressed the need to develop and hold on
to loyal and highly skilled workers.
According to figure 2.2.1, which is an unemployment rate diagram, shows that the
percentage of unemployment rate between 1960 and 1980. It illustrates the number was
going down since 1960 and suddenly upwards in 1972. After that, the line gro
ECN Lecture 4
Price Level: Overall level of prices at a point in time as measured by a price index such as the
Consumer Price Index (CPI): For any period, measures the cost in that period of a standard
basket of goods and services relative to the cos
ECN Lecture 1
Macroeconomics: Examines the WHOLE ECONOMY.
Microeconomics: Examines INDIVIDUAL UNITS (Household, Firm, or Industry) and their decision
Intercept: y-value when x-value is zero.
Slope: Vertical Change/Horizontal Change.
ECN Lecture 2
Invisible Hand: A concept founded by Adam Smith, it is a natural phenomenon that guides free
markets and capitalism through competition for scarce resources. Individuals, acting in their
own self-interest, compete for scarce resources. Becau
Debt crisis means a situation that art amount of debt lacked by individuals,
countries or organisation threaten to overwhelm them, so that they cannot pay off
their debts, in turn, may threaten the stability of large structure. Therefore, it
Hong Kong Undergraduate Financial Planners of the Year Award 2016
Financial Planning Proposal
University Name: Hong Kong Shue Yan University
Team Name: Project X
Leung Yee Kit
4.1 Consumption Plan
Donald is currently hol
Gross Domestic Product
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Consumer Price Index
Aggregate Expenditure WITHOUT Govt/Foreign
13.1 Fiscal Policy and the AD-AS Model
Fiscal (financial) policy: change in government spending & tax collections to achieve
full employment, control inflation & encourage economic growth
Discretionary/ active: change in government spending & t
7.1 Measuring the Economy's Performance: GDP
National income accounting: measure economy overall performance
Allow to assess economy health
Track long run course of economy
Aggregate output: annual total output of goods an
11.1 The Aggregate Expenditure Model: Consumption and Saving
Prices in economy is fixed; help us understand how to adjust economy shock over
Private closed economy: w/o international trade and government
Private opened: net exports
8.1 Economic growth
Economic growth measure by
Real GDP per capita= real GDP/population
Growth- economic goal (expansion of total output relative to population can
increase wages, incomes & standard living) to meet people want and solve
12.1 Aggregate Demand (AD)
Schedule/ curve shows amount of output (real GDP) that buyers desire to
purchase at each price level
Inverse/ negative relationship btw price level & real GDP
Effects of price-level change
Real balance effect
10.1 The Income-Consumption and Income-Saving Relationships
Personal saving: not spending/ part of disposable income not consumed
Saving (S)= Disposable income (DI)- consumption, C
Consumption Schedule/ consumption function
Consumption is direc
14.1 The Function of Money
"Money is what money does "
Medium of exchange: buy & sell goods and services; acceptable as payment; escape
complications of barter
-> convenient means of exchanging goods; gain advantages of geographic and human
ECN 204 Lecture 3
In assessing the health and development of an economy, macroeconomists focus on: Real GDP
Growth, Unemployment, & Inflation.
Three Main Indicators in Macroeconomic Activity:
Real Gross Domestic Product (Real GDP) measures outpu
ECN Lecture 5
The Short-Run Fluctuations
Most firms meet the demand at a present price.
Since there is a slow adjustment of prices, economy-wide spending changes are now the
major cause of output gaps.
If gaps persists, firms may eventually respond (and
Hierarchy of Economic
1. Free Trade Agreement
2. Customs Union
3. Economic Union
Free Trade Agreement
Commenced on 1 January 1994
Successor to Canada-US Free Trade
Agreement (CUSTA) commenced 1
ECONOMY OF THE 1920s
Effect of World War I on the
Failure during the 1920s to deal
effectively with the legacies of the
Legacy of First World War
Apart from causing a massive loss of life
and material destruc
Chain of Debt
Chain of Debt
Britain and France borrowed heavily from
the United States during war.
United States refused to cancel war debts
Need for reparations from Germany.
External value of a currency
Appreciation the currency buys more foreign
Depreciation - the currency buys less foreign currency
Reasons to hold foreign currencies
(1) For trade and investment
(2) Interest rate arbitrage
Balance of Payments
Credit and Debit
Credit (positive) items generate inflows of
payments from the rest of the world, e.g.
payments for goods we export or foreign
investment into Canada
We will begin with an
introduction to some
Total production can be measured by
adding up total expenditures or total
incomes they should come to the same
Gross Domestic Product (GDP)