CHAPTER
6
The Open Economy
Questions for Review
1. By rewriting the national income accounts identity, we show in the text that
S I = NX.
This form of the national income accounts identity shows the relationship between the
international flow of funds for
Econ 522 Spring 2013
Instructor: Shu Wu
Solutions to Homework Assignment #1
Chapter 2
4. a. The airplane sold to the Air Force counts as government purchases because the Air Force is part of
the government.
b. The airplane sold to American Airlines counts
AP Microeconomics
2.3 Equilibrium Graphing Assignment
An entire city likes milk and coffee equally well. Milk is packaged in cardboard cartons. Coffee is
packaged in tin cans. Yesterday the price of cookies, a complement to milk, increased in price. You c
AP Microeconomics
3.4 AP Free Response Assignment
The following is a free response question released by the College Board from a previous AP exam to be
used as practice for future exams. Answer each part of the question in the document below, and then
tur
AP Microeconomics
5.3 Understanding Futures Contracts Assignment
Introduction
Farmers and their agricultural products such as corn, wheat, livestock, etc. are good examples of the
type of firm and good that operate within a perfectly competitive market st
AP Macroeconomics
7.3 Practice AP Free Response
The following is a free response question released by the College Board from a previous AP exam to be
used as practice for future exams. You can complete the assignment in this document, using the drawing
to
AP Microeconomics
6.2 AP Free Response Assignment
The following is a free response question released by the College Board from a previous AP exam to be
used as practice for future exams. Answer each part of the question in the document below. When you
are
AP Microeconomics
6.3 Grading AP Free Response Questions Assignment
By this point in the course you have encountered numerous AP Free Response questions. You probably
have noticed that these questions can vary in length and tend to incorporate concepts fr
Econ 522
Fall 2012
Study Guide
Final Exam
The Final Exam will test material for Course Sections I, II, III. A, III.B., III.C.,
III.D, and IV.C. All of this material was tested on Tests 1 and 2, except for section IV.C.
The study guide for section IV.C. is
Chapter 11
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Context
o In the 1930s, the world experienced the great depression
All countries around the world experienced massive unemployment and greatly
reduced outputs and incomes
o Prior to the 1930s and up to the great depression, the prevailin
Chapter Two
In Class Notes:
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GDP is often considered the best measure of how well the economy is performing
Computed every three months
Two ways to view the GDP:
o The total income of everyone in the economy
o The total expenditure on the economys ou
Chapter One
In class Notes:
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Economics is the study of the economy and the behavior of people in the economy. It studies
the overall or aggregate behavior of the economy in the long run and short run.
Macroeconomics:
o Inflation
o Economic Gr
Chapter 10
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Facts about the business cycle
o GDP growth average 3-3.5 percent per year over the long run with large fluctuations in
the short run
o Consumption and investment fluctuate with GDP, but consumption tends to be less
volatile and inves
Chapter Four
In Class Notes:
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Money: Definition, Functions, and Types
o Money is the stock of assets that can be readily used to make transactions
o 3 functions:
Store of value: transfers purchasing power from the present to the future
Unit of
Chapter Three
In Class Notes:
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An economys output of goods or services (GDP) depends on:
o Quantity of input or factors of production
o Ability to turn inputs into outputs as represented by its production function
Factors of production are the inputs u
In this chapter we have developed a model that explains the production,
distribution,
and allocation of the economys output of goods and services. The model relies on
the
classical assumption that prices adjust to equilibrate supply and demand. In this
mo
AP Microeconomics
3.3 AP Free Response Assignment
The following is a free response question released by the College Board from a previous AP exam to be
used as practice for future exams. Answer each part of the question in the document below, and then
tur
AP Microeconomics
Lesson 1.3 Economics in the News - Template
Complete this assignment by filling in the three tables below. When the tables are complete, save the file
and submit it in the Lesson 1.3 Economics in the News assignment area in the course. F
AP Microeconomics
6.4 Market Structure Photo Essay Assignment
Introduction: You probably pass by numerous businesses as you commute to school, work, etc. But
how often have you ever taken the time to consider what market structure they operate in?
Assignm
Econ 522 Spring 2012 Test 3 Study Guide
A. Inflation and Unemployment (The Phillips Curve)
Milton Friedmans views on the tradeoff between unemployment and inflation are quoted at the beginning
of Chapter 13 (and in the lecture slides). Did Friedman believ
Econ 522 Spring 2013
Instructor: Shu Wu
Solutions to Homework Assignment #2
Questions: Chapter 3: #8, #10, #12; Chapter 4: #3, #5; Chapter 5: #6
Chapter 3, #8
a. Public SavingThe tax increase causes a 1-for-1 increase in public saving. T increases
by $100
Econ 522 Spring 2013
Instructor: Shu Wu
Solutions to Homework Assignment #4
Questions: Chapter 9: #1, #2; Chapter 10: #2, #3;
Chapter 9, #1
a. In the Solow model with technological progress, y is defined as output per effective worker
and k is defined as
11
CHAPTER
Aggregate Demand I: Building the
I S LM Model
Questions for Review
1. The Keynesian-cross model tells us that fiscal policy has a multiplied effect on income.
The reason is that according to the consumption function, higher income causes higher
Final Exam
May 17, Friday, 7:30 10:00 AM
Closed-book, closed-note
No smart phones nor laptops are allowed
100 total points, 40 points on multiple choice
questions, 60 points on numerical/analytical
questions.
1
Final Exam
You dont need to memorize ma
Midterm Exam
March 14, Thursday
Closed-book, closed-note
No smart phone nor laptop are allowed
50 total points, 25 points on multiple choice
questions, 25 points on numerical questions.
You dont need to memorize math formulas. You
do need to know all
M ain Objectives
How to measure the two most important
macroeconomic variables:
Aggregate output
gross domestic product (GDP)
Price Level
GDP deflator and consumer price index (CPI)
1
Gross Domestic Product:
Expenditure, Income and Output
Total expen
The Circular Flow of Income
Income ($)
Labor and
capital
Firms
Households
Goods
Expenditure ($)
1
M ain Objectives
The long-run behavior of a well-functioning
economy
what determines the economys total
output/income?
how is total income distributed?
H
M ain Objectives
The definition, functions, and types of money
How banks create money
How do central banks control the money supply
the impact of money supply on the aggregate
economy
1
Money: Definition
Money is an asset that
is generally accepted
as
I N THIS CHAPTER, YOU WILL LEARN:
The classical theory of inflation
causes
effects
social costs
The difference between nominal and real interest
rates
Classical assumes prices are flexible &
markets clear
Applies to the long run
1
U.S. inflation an
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