Chapter 1: The Big Ideas
Economics in general has found the following to be important.
1) Incentives Matter
Rewards & penalties motivate behavior.
People respond to incentives in predictable ways.
Self-interest extremely important incentiv
Real GDP per capita is the most important variable. That helps us to track
down an economys GROWTH over time
o Real GDP per capita = $RGDP / # population
o INCREASING AND DECREASING
Rule of 70 tells how long its take for real GDP per capita
Exam 1 1/13
Chapter 3 Analysis of a Market
Supply and Demand is a model of the market functional (makes assumptions)
o Buyers and sellers, law of supply (producers)
o Law of demand buyers
o Law of supply sellers, producers
Drug market with
Three Main Macroeconomic Variables:
Long-Run Economic Growth
What is Long-Run Economic Growth?
Economic Growth: Pros, Cons and
Economic Growth Rates
The Five Keys to Economic Growth
The Per-Worker Production Fun
Money, Banks and the Federal Reserve
The Four Functions & Characteristics of Money
The Federal Reserve System
Fractional Reserve Banking & Three Types of
How a Bank Affects the Supply
Price Elasticity of Demand
The law of demand tells us that, other things equal, consumers will
buy more of a product when its price declines and less when its
The responsiveness (or sensitivity) of consumers to a pric
Exam 2 Study Guide Fall 2015
Making a Brand Catch On: Know all 6 Methods and Examples
Chapter 16 Notes
3 Main Sources (Account for >90%):
1. Individual Income Tax
Single largest source of revenue
Marginal Tax Rate The tax rate you must pay on an additional dollar of
o Matters for determining things like incentive to wo
Lets see how monetary policy looks in our
dynamic aggregate demand and supply model.
The Fed uses the tools of monetary policy to
influence aggregate demand (AD).
Suppose that the Fed wishes to increase
aggregate demand. It could do so by buying
In the Solow model we treated At as increasing smoothly over
time as new ideas are created.
In this version of the model,
Y = At F(K,L)
At jumps around in the short run as productivity shocks hit the
Labor hours, L, will change during booms and b
Chapter 14: The Federal Reserve System
And Open Market Operations
After this chapter you should be able to do the following.
Define money and discuss its four functions.
Discuss the definitions of the money supply used in the United
Macroeconomics tries to understand
the economy to achieve three basic
1) Rapid Economic Growth
Economic growth is the ability of an
economy to produce increasing quantities
of goods and services
2) High Employment
High employment is important, both
The United States and other developed regions such as Japan and
Western Europe are on the cutting edge of economic growth.
In order to keep on growing these countries must develop new ideas to
increase the productivity of capital and labor.
Chapter 6: The Wealth of Nations and
Discuss the importance of long-run
Define economic growth, calculate
economic growth rates, and describe
trends in economic growth.
Discuss institutions that fost
Chapter 7: Growth, Capital
Accumulation, and the Economics of
Ideas: Catching Up vs. the Cutting Edge
The Solow Model of Economic
Economic Growth that Catches Up to
the Cutting Edge (World Frontier)
Economic Growth on the Cuttin
Chapter 6: Growth Miracles and Growth Disasters
Real growth of other countries is usually compared to the world
economic development frontier and that is equivalent to comparing
theirs to the U.S.
Countries that grow faster than the U.S. are catching up t
Syllabus for M.A. Economics Entrance Test
1. Micro Economics
Utility Functions- Quasi-linear and Cobb-Douglas
Demand functions, Supply functions, and market equilibrium
Law of Demand and law of supply
Theory of consumer behavior- Marshallian approach, Ind