Preparation for
For background and review purposes I suggest that
you consult Economics 231 (www.tamu-commerce.edu/ecofin/courses/funderburk/231/231.html).
You might focus on the
following:
Notes
·
Note 9. GDP in Plain English
·
Note 8. National Income
Accounting
·
Note 10. Classical Economics
Exercises
Sample Questions
(Methodology/Terminology)
·
Inflation/Unemployment
·
Investment?
·
Does this go into GDP?
·
Adding - Conceptually
·
National Income – Practice Calculations
·
Converting Current to Constant
·
The Consumption Function
·
Aggregate Curves
·
Classical Economics
·
The Multiplier
Generally—What should I
know?
-
the process
-
positive v normative
economics
-
the goals
-
shifting priorities
Assessing the economy’s
performance
Key performance indicators
-
employment related
-
price level
-
international
-
other- consumer confidence, capacity utilization, etc
(Note: for each indicator, be
familiar with the statistic. Who
compiles the stat.? How? What does it
measure? What are the weaknesses or limitations? Types of variables: stocks,
flows, nominal, real, chain-weight, fixed-weight).
output and growth
GDP – how determined?
spending sectors?
what included, excluded?
Other/related income accounts
N.I., D.P.I.
(relationships between accounts?)
Theory
Circular flow model: simple basics
Classical theory
-
who were the Classicals?
-
basics of Classical theory?
-
Say’s law: essentials, implications
-
Classical v. Keynesian theory
Aggregate demand-aggregate supply
· model (with price level):
- what the curves
represent;
- what determines slope/shape
of each;
- curve shifters;
· manipulation of the model
– be able to illustrate and determine effects of various autonomous changes,
policy measures (under different economic circumstances)
Basic Keynesian model (Keynesian
cross):
Consumption function:
graphics, MPC, MPS, movements along function v shifts; Non-income
determinants of consumption
-
Investment function
-
Two-sector equilibrium (algebra and graphics)
-
Planned / intended investment versus measured / realized
-
Simple Keynesian multipliers
Adding government
spending and taxes to the model
-
Three-sector equilibrium (algebra and graphics)
-
New multipliers
Adding imports, exports
to the model.
-
Four sector equilibrium (algebra and graphics)
-
More multipliers
Tweaking the model
-
adding positive MPI
-
adding tax function
Some Terminology/Distinctions
Note: This
is not a definitions/memorization exercise.
You should be able to recognize, analyze, apply the terms and
concepts. For example, while it is easy to
memorize the definitions of macroeconomics versus microeconomics, you should be
able to apply—a la Henry Hazlitt.
·
macroeconomics – microeconomics
·
positive economics – normative economics
·
real variables – nominal variables
·
current dollar values – constant dollar values
·
final transactions – intermediate
·
stock variables – flow variables
·
“unemployed” – not employed