ECN2801

Spring 2018                                         Review for Exam 2

Dr. Dao

 

·         Real Balance Effect

·         Effect of Consumption on aggregate demand

·         Expectations about future prices

·         Interest Rate Effect

·         Effect of Income Taxes on aggregate demand

·         Business Optimism

·         Effect of Business Taxes on aggregate demand

·         Effect of Appreciation or Depreciation on Net Exports

·         Effect of Wage rates on short-run aggregate supply (SRAS)

·         Effect of prices of nonlabor inputs on short-run aggregate supply (SRAS)

·         Adverse Supply Shock

·         Effect of Labor Productivity on short-run aggregate supply (SRAS)

·         Short-run Equilibrium

·         Effect of changes in Investment on aggregate demand

·         Reasons for downward sloping AD curve

·         Short-run vs. Long-run Aggregate Supply Curve

·         Full employment real GDP

·         Recessionary (Contractionary) Gap

·         Inflationary (Expansionary) Gap

·         Self-regulating Economy

·         Classical Economics

·         Laissez-faire Macroeconomic Policy

·         What will happen when the economy is in a recessionary gap?

·         What happens if the economy is operating at a point beyond its institutional PPF?

·         Say’s Law in a money economy

·         Classical View of the Credit Market

·         Relationship between amount of funds firms invest and the interest rate

·         Classical Position on Wages and Prices

·         What Happens when Total Production is Greater than Total Expenditures?

·         Two Major Curves or Lines in the TE-TP diagram

·         What Happens when TE > TP? When TP > TE? When TP = TE?

·         Relationship between Consumption and Disposable Income

·         What Determines Savings according to Classical Economists? According to Keynes?

·         Efficiency Wage Model

·         Keynes’s The General Theory of Employment, Interest, and Money

·         Keynes’s View on what determines Investment