SECTION E. THE CREDIT MARKET EQUATION:
is: x = m + v
addresses the question:
o What are the causes of changes of spending?
o How is it possible for spending to change?
o What must happen in order for spending to change?
says: In order for spending to rise
x = p + q. The Product Market Equation
Comments on the Equations
All of the variables in these two equations are
written using lower case letters
Lower case letters are used to indicate that all the
variables are rates of chang
The Credit Market Equation
In LEVELS (not the important one): MV = X, where
M = the money supply (M2) = cash in circulation +
deposits in checking and savings accounts
V = the velocity of money the speed of money (see next
slide for more)
X = nominal GDP
1 Enter CHANGES OF values in the grey squares
2 Sheets are (non-password) protected to prevent entering values anywhere else
3 The yellow "flags" alert the user to any equalities that should, but do not, hold
That is, a yellow flag, means something needs
The Relative Effectiveness of T, TP and G
We will assume that
1. the rich will save more of a change of income and consume less of it
than will the poor.
2. the rich pay most of the taxes, the poor get most of the transfer payments
YOU CAN SET (GREY)
A. POLICY VARIABLES
1. The Fiscal Policy Variables - G, TP, Tg
2. Change of the Money Supply - dMS
B. PRIVATE REACTIONS
1. Money Demand Behavior
0 = Classical, 1 = Keynesian, Other = "Intermediate"
2. Consumption Effects
dC_TP and dC_Tg
TAXES Demand or Supply?
The supply side argument for tax cuts has
been important in the last thirty or so years.
The ascendance of these arguments is often
associated with President Reagan.
TRICKY #2 Demand or Supply
In Reagans 1980 run for the presidency
THE PRODUCT MARKET EQUATION:
is: x = p + q
addresses the questions:
o What are the effects of changes of spending? or What happens if spending changes?
o What happens if technology changes?
o What happens if costs of production change?
says: Any percen
TEST #3 Review
NAME _ _
1. Define and know the elements of Fiscal Policy and Monetary Policy
MP (monetary policy) use of the supply of money to influence the economy
Ability to print money
Ability to make money available to banks
Ability to remove mone
A. RAISE THE DEFICIT BY 10
1. MODEL: Short-run, Keynesian. OBJECTIVE: Highest X
X = C + G MD I
G = 10
TP = 10
Tg = -10
2. MODEL: Long-run, CMT. OBJECTIVE: Highest I
X = C + G MD
G = 10
TP = 10
ECN212 Spring 2017
Exam 2 study guide
While there is no way I can include all of the topics below into a single 50-minute exam, knowing how to
do all of the listed things will significantly increase your chances of performing well on the test.
In order to
Elasticity: A measure of how much the quantity demanded of a good responds to a change in
the price of that good ceteris paribus
Calculated as ratio of % change in quantity demanded/ % change in price
E= % change Qd/% change in P
|E|> 1 elastic demand
GDP: The market value of all final goods and services produced within a country in a given
amount of time.
GNP: Market value of all final goods and services produced by the national entities over a given
period of time
Components of GDP: GDP= Consumption+
Demand (annual) (D)
Cost per order (Co)
Holding cost % (Ch)
Cost per unit
Lead time (Days)
Total order cost
Total holding cost
=SUM (TOTAL ORDER COS
Time: 1h 15m
24 June 2013
Instructor: Brian B. Young
The value of this exam is 100 points.
Please show your work where
2 points each
1) One reason the demand for pean
Face to Face Ice Breaker
As we were assigned to complete a face to face ice breaker assignment for our group, we
started to throw some ideas around on how to complete this task. As a group we felt it was better
for us to have a round table and just
1. Obligation of business that represents the claims of these against the assets of the less cash
B. An expense (WA)
D. An equity
2. Net income results when
A. Assets > liability
November 10, 2015
A fellow peer, Mike Shapiro, and I have just graduated Harvard Law School,
eager to start our own high-powered law firm specializing in Wrongful Termination.
Mike has wealthy family who
Lesson 2: The Law of Demand
5. Consider the following scenario and state the expected change in the supply or
demand curve. You should note whether the scenario indicates a shift of the curve
or movement along the curve.
Scenario: You are a supplier of wi
Thyroid is essential hormone that is responsible for a lot of
processes in our body. There are some of them: Breathing,
metabolism, body weight, muscle strength, cholesterol levels and
There is some discovers about thyroid dise
SUPPLY SHIFTS and DEMAND SHIFTS
A Change of Demand Spending - will cause Inflation
(Prices) and Real Growth (Output) to move in the same
D => p and q. As people spend more, businesses will
raise prices and produce/sell more goods
D => p and q .
Lesson 2: Demand and Supply
Demand- a schedule that shows how much of a good or service people will
purchase at any price during a specified time period, assuming that other
Law of demand- a negative, or inverse, relationship be
Lesson 1: The Nature of Economics, Scarcity, and the World of
Chapter 1 Key Terms:
Incentives- rewards for engaging in a particular activity
Resources- things that are used to produce other things to satisfy peoples
Wants- what people wou
Answer each of the questions below in short-answer format. Write your responses in complete
sentences. Your answers to each question should include 2-3 paragraphs.
1. Explain Opportunity Cost and provide an example.
2. What is the differe
WAR AND PEACE
SARBITH AGUILAR, ABEER SHAWKAT
Why does the United States have any military?
The Continental Army, Continental Navy, and Continental
marines was created in close succession by the second
continental congress in order to