ECO/370 STUDY GUIDE FINAL EXAM

Circular-flow diagram

Define/ understand the components as it relates to firms vs. households.

Production possibilities frontier

· Efficient vs. inefficient

· Opportunity cost/ tradeoff

· Unattainable points

· Shifts i.e. outward, inward

Micro vs. Macro Economics

Positive vs. normative economics

Market

Characteristics / pricing strategy of the four market structures

1. Free / competitive

2. Monopolistically Competitive

3. Oligopoly

4. Monopoly

Demand vs. Quantity Demanded/ supply vs. Quantity Supplied

· Shift factors (demand, supply)

Market equilibrium, Shortage and Surplus

· Invisible Hand theory

GDP

· Definition

· Four components

· Consumer Price Index

1. Calculating

2. Fixed basket

3. Inflation rate

4. Deflator

· Inflation/ deflation

· Real vs. Nominal

· Subjective issue i.e. Measure of economics well-being

· Historical trend

Unemployment

· Labor force

· Natural rate

· Three Categories

Money

· Functions

· Kinds

· Supply

· Liquidity

· The federal Reserve System

1. Money Multiplier

International Trade

Balance, deficit, Surplus

Aggregate Demand / Aggregate Supply

· Short Run Fluctuations i.e. recession, inflationary gap etc.

· Model i.e. AS curve, AD curve

· Keynesian vs. Classical

· Shift in AD

· Reasons for downward slope

Monetary Policy

· Expansionary vs. Contractionary

· Tools

Fiscal Policy

· Expansionary vs. Contractionary