Topics 1-7

Semester Topics and Graphs: Guide to Basics

Topic 1:  Introductory Materials and Production Possibilities

·         For an economist, ­­­­­­­­­­__________ is scarce.

·         All decisions require an _____________ ______.

·         Most problems of predicting changes will require c_______   p________ assumptions.

·         The most common labels on the PPC are Y Axis = _________, X Axis = _________

·         Students must know the significance of points inside the Frontier, on the Frontier, and outside the Frontier.  They are equal to:  _______________, ___________, _________.

·         Students must understand that moving the Frontier requires more _______ __ _______.  Big Chart Graph:  Production Possibilities Curves/Frontiers (#1)

Topic 2:  Supply and Demand Basics and Currency Exchanges

·         When product prices are changed first, move points on the ______.   This is known as a __________ Change and this will create a surplus or a shortage.

·         When government steps in with artificial price floors and ceilings, they are trying to help suppliers with _________ and consumers with __________.

·         Artificial floors always create greater ______________.

·         Artificial ceilings always create greater ______________.

·         When any other product factor changes first, move either the __ or __ _______.  This is known as a “Supply or Demand” Change.

·         This will create a new ___ and ___ for that market.

·         When the price of a good increases, a substitute’s demand will __________.

·         When the price of a good increases, a complement’s demand will _________.

·         Perfectly inelastic supply lines are __________________.

·         For the rest of a macro course, skip discussions or lessons on elasticity.

·         Currencies are supply and demand products.

·         Demand for currencies will flow to the __________ economy.

·         If D changes for one currency, __ must change for the other currency.

·         The two currency graphs will move in ___ ________ direction.

·         One currency will always appreciate, the other will _________.

·         Appreciation of a currency hurts _________, depreciation helps make them cheaper.

·         Big Chart Graphs:  Dollar Graph, Other Currency Graph (#2, #3)

Topic 3: Goods and Government

·         Durable goods and non-durable goods are based on length of ________ _____.

·         Transfer payments are from government to _________.

·         Subsidies are payments from government to _________.

Topic 4:  GDP Accounting

·         The expenditure approach of __ + __ + __ + __ must be memorized.

·         The expenditure approach is equal to ____.

·         The expenditure approach is also equal to _______________.

·         __ is the most significant in the US, __ has no savings leak, __ is affected by interest rates (in an inverse way for the domestic market).

·         For GDP accounting, intermediate goods are ___ ________.

·         Unsold inventory is counted as __ at year’s end.

·         Used goods do ___ count in the year they re-sell.

·         Goods and  _________ both count as Consumption.

·         GDP to NDP accounts for Depreciation of Capital or Consumption of Fixed Capital (CFC).   This gives the _____ measure of growth.

·         Nominal minus Inflation = ____.

Topic 5:  Business Cycles

·         The up-sloping Secular Trend is a Classical Theory of gradual improvement of lifestyles over time.  It can be connected to_____ Law.

·         The minimum time span for a change in the cycle is ______________________.

·         The cycle is measured from ________ to _________.

·         _______ and _______ can only be recognized after they have occurred.

·         Expansions and Contractions/Recessions can be recognized as they occur.

·         The average cycle for the US has been about ________ (200 years of data).

·         Recessions have historically lasted about ___ months (20 century and beyond).

·         It will be assumed that Recession will have excess ______________.

·         It will be assumed that Expansions will have some excess _____________.

·         Big Chart Graph:  Business Cycles (#4)

Topic 6: Employment and Unemployment

·         Part time workers are ___________ as “employed”.

·         Discouraged workers are ____ ___________ as unemployed.

·         “Full Employment Unemployment” (FE) is the ________ ____ __ __________ for a country.

·         The differences between frictional and structural unemployment are important.

Topic 7:  CPI, GDP Deflators, Inflation

·         An Index Year is always made equal to _______.

·         Real change of values over time can always be calculated with the formula:  Later Year – Earlier Year/Earlier Year.  This = the Rate of Change.  The Rate x 100 = Inflation %.

·         CPI measures monthly purchases by _______, the GDP deflator looks at the _____ ___________.

·         G spending changes are assumed to be more important that private C changes because C changes always have a __________ leak.

·         Demand Pull inflation is caused by excessive ____________________.  It can be manipulated by governmental policies.

·         Cost Push inflation is a _______ ___ _____________ and often can’t be corrected.

·         Stagflation is the presence of rising unemployment and rising inflation, and can be created by ___________ ______________.