Test#2 Study Guide-2
Test#2 will consist of 20 True/False questions, and a graphical analysis section.
The following are topics to study for the True and False Questions.
- Real GDP
- Nominal GDP
- Real per capita GDP
- Employment
- Underemployment
- Discouraged workers
- Marginally attached workers
- The relationship between real GDP and changes in the unemployment rate
- Possible reasons that lead to job loss
- Examples of structural changes
- cyclical unemployment
- Shoe-leather costs
- Unit-of-account costs
- Nominal interest rate
- Real interest rate
- income-expenditure equilibrium
- The aggregate price level
- Price index
- Consumer Price Index
- Producer Price Index
- Marginal Propensity to Consume
- Marginal Propensity to Save
- Individual consumption function
- aggregate consumption function
- Reasons why the aggregate demand curve has a negative slope
- What causes Aggregate demand to increase or decrease
- Reasons why the short-run aggregate supply curve is positively sloped
- What causes short-run aggregate supply to increase or decrease
Topics to study for the Graphical Analysis section:
Be able to graphically illustrate either an individual (cf) or aggregate consumption function (CF).
Be able to determine the effect on the short-run aggregate demand (AD) curve for a given scenario, and sketch a graph to illustrate the answer.
Be able to determine the effect on the short-run aggregate supply (SRAS) curve for a given scenario, and sketch a graph to illustrate the answer.
Be able to graphically illustrate the long-run aggregate supply (LRAS) curve.