Part 1: Will consist of 30 True or False and/or Multiple Choice Questions worth 2 points each. (60 points total)

The following are a list of topics to study for the test:

Negative demand shocks (examples)
Positive supply shocks (examples)
Stagflation
long-run macroeconomic equilibrium
short-run macroeconomic equilibrium
recessionary gap
inflationary gap
Fiscal policy
Monetary policy
Expansionary vs. Contractionary Fiscal Policy
The government spending multiplier vs. the government transfers/taxes multiplier
The savings-investment spending identity in a closed economy (formula only)
national savings (formula only)
Lump sum taxes
The two main types of assets
The M1 vs. M2
The three main roles that money plays in the economy
A bank's T-account (assets vs. liabilities)
The monetary base vs. the money supply
The two main parts of the Federal Reserve System
Government surplus vs. government deficit
12 regional federal reserve banks
Know how investment spending is financed
The money multiplier
The Federal Open Market Committee
The federal funds rate vs. the discount rate
Open-market operations

Part 2: Graphical Illustration. (40 points total)