I need help for my ECON homework

Final exam guidelines

The final exam will consist of 75 multiple choice questions as well as two short essay questions (you will choose two from three options) and one long essay question. The essay questions are drawn from the mini-assignments in the weekly conferences.

Given formulas on the exam:

Slope= (y2-y1)/(x2-x1)

GDP= C + Ig + G + Xn (you will not need to know any of the other equations that go into this, like NI, PI, etc)

Xn= X – M

MPC + MPS = 1

Reserve ratio= (commercial bank’s required reserves)/(commercial bank’s checkable-deposit liabilities)

Excess reserves= actual reserves – required reserves

Sa + M + T = Ig + Xn + G

Current account + capital and financial account = 0

Multiple choice questions (5 from each section- worth 100 points total):

There will be 5 multiple choice questions from each chapter, with a few more from chapters 1 and 2 and a few less from the Chapter 1 appendix. Each multiple choice question is worth 2 points. This portion of the study guide is meant to highlight the material from which I’ve drawn the exam questions.

Chapter 1:

Macroeconomics vs microeconomics; positive vs normative statements; opportunity cost- both an understanding of the law itself and the ability to apply this to a data table; calculating the slope of a budget line; how to represent unemployment/inefficiency on a graph

Chapter 1 appendix:

Independent versus dependent variables; inverse relationships

Chapter 3:

normal vs inferior goods, complementary vs substitute goods; problems similar to #20-22 from assignment 1; effects of supply and demand shifts on quantity and price

Chapter 7:

definition of GDP; basic GDP calculation; calculating GDP price index; calculating price level changes from year to year

Chapter 8:

calculating the rate of growth year to year for an economy; economic growth; supply and demand factors in economic growth

Chapter 9:

business cycle phases; full-employment unemployment rate; natural rate of unemployment; calculating the inflation rate; using price index to calculate real or nominal figures

Chapter 10: consumption and savings: what would shift the schedules and what the slopes of the lines mean; investment demand; effects of changes in investment spending and the MPS on GDP (similar to problem 27 from the assignment that week)

Chapter 11: relationship between savings, investment and real GDP; problems similar to #s 8 and 9 from that week’s assignment); closed economy vs. open economy (effect on aggregate expenditures and GDP); factors which affect real GDP and employment

Chapter 12: aggregate supply curve; aggregate demand curve; surplus and shortage; problems similar to 23 and 24 from that week’s assignment

Chapter 13: contractionary vs. expansionary fiscal policy; cyclical deficits and recognition lags; public debt (what it comprises) and how the government handles it

Chapter 14: What is M1, what is M2, FOMC responsibilities, Federal Reserve responsibilities, effects of inflation on purchasing power of money/value of money as a medium of exchange

Chapter 15: excess reserves and required reserves calculations (reserve ratio calculation), what are considered reserves for a commercial bank or for the Fed, effect of loans made on the money supply and checkable deposits

Chapter 16: effects of an increase in interest rates, relationship between quantity of money demanded, GDP and interest; relationship of reserve ratio to excess reserves and discount rate, effects of open market operations on federal funds rate, restrictive versus expansionary monetary policy

Chapter 20: questions similar to #s 7-9 on that week’s assignment, effects of tariffs and quotas

Chapter 21: credits and debits in the current account; currency appreciation/depreciation; what does a flexible exchange rate system entail; exchange controls; what are the effects of floating exchange rates

Short essay questions (answer 2 of 3 choices- worth 50 points total): Look at not only your answer, but also your classmates’ answers that seem particularly well thought out and insightful. More specifically....

Question 1: Study the week 2 mini assignment. Also, make sure you know what nominal GDP, real GDP, and real GDP per capita are and how these numbers are used.

Question 2: Study the week 4 mini assignment. Make sure you know what the Federal Reserve and FOMC do, as well as what kinds of actions they have taken recently. Also, what indicators are important in analyzing the economy?

Question 3: Study the week 7 mini assignment. Make sure you know about international trade, its effects, tarrifs/quotas, the WTO, etc. Also, make sure you know how exchange rates come into play regarding international trade.

Long essay question (worth 50 points): This is an assignment of the state of the US economy as a whole. Your analysis should include a discussion of several economic areas, including (but not limited to) employment, housing, exchange rates, etc. There are no right or wrong answers to this question as long as you support your viewpoint. You can use any sources you want- the Beige Book, Federal Reserve statements, currency relationships and fluctuations, news sources (as long as they are reputable),economic indicators, etc. While anecdotal evidence is fine, please do not solely rely on “people I know have a hard time buying a house” or “it’s expensive to shop in Europe” unless as a supplement to factual evidence.