Test#2 Study Guide
Test#2 will consist of 20 True/False and/or Multiple Choice questions each worth 5 points. You will have plenty of time to take the test. The test will open this Thursday and close on Sunday at 11:59 pm.
The following are a list of topics to study for the test.
- Real GDP vs. Nominal GDP (the definitions for each)
- Know the formula for Growth in Real GDP
- Know the formula for the unemployment rate
- Know the formula for GDP per capita
- Know the difference between frictional and structural unemployment and what causes each
- Know the definition of underemployment
- Know the definition of a discouraged worker
- Know the relationship between real GDP and changes in the unemployment rate
- Be familiar with reasons that lead to job loss
- Know the definition of the natural rate of unemployment
- Know the formula for the real interest rate and how to use it in a problem
- Know the definition of shoe-leather costs
- Know the definition of unit-of-account costs
- Know the definition of a price index
- Know the difference between the Consumer Price Index vs. the Producer Price Index
- Know the difference between the Wealth Effect vs. the Interest Rate Effect
- Know the definition of planned aggregate spending
- Know the formula for the multiplier
- Know what causes the Aggregate Demand curve to increase or decrease
- Know the reasons why the short-run aggregate supply curve is positively sloped
- Know what causes short-run aggregate supply to increase or decrease