The three midterm multiple-choice exams will consist of between 30 and 50 questions.The multiple choice questions on these exams will be directly correlated to the essay questions/learning objectives listed below and will also contain questions from the Chapter Reading Quizzes.

This exam will cover material from chapters 6, 7, 8, 9, and 10

14. Describe in detail the household survey of unemployment and, in the context of the survey, explain what is meant the terms below and give the number or rate of each based on the table below for the following dates-- December 2007; June 2009; April 2010, January 2020, April 2020, and December 2022:

    employed unemployed not in the labor force the unemployment rate the labor force participation rate the employment rate (employment -population ratio) if the answer for 'e' in December 2007 were the same as in December 2022 and the population and th number of employed remained as stated in December 2022, how many people would be unemployed in December of 2022? And what, therefore, would the unemployment rate be in December of 2022 under these assumptions?

    December 2007 June 2009 April 2010 January 2020 April 2020 December 2022 Civilian noninstitutional population > 16 233,290,000 235,695,000 237,327,000 259,502,000 259,896,000 264,844,000    Civilian labor force 153,918,000 154,730,000 154,622,000 164,348,000 156,308,000 164,966,000        Employed 146,273,000 140,003,000 139,297,000 158,543,000 133,258,000 159,244,000        Unemployed                Not in labor force             Unemployment Rate             Labor Force Participation Rate             Employment-Population Ratio               Note: Here is a link to Bureau of Labor Statistics site that shows "Alternative measures of labor underutilization" -- https://www.bls.gov/news.release/empsit.t15.htm



15. Unemployment and Full Employment
    1. Give the definitions of:
       1. Frictional Unemployment;
       2. Structural Unemployment;
       3. Cyclical Unemployment;
       4. Natural Unemployment.
    2. Explain what is meant by full employment in macroeconomics, and explain why the unemployment rate might well be greater than zero at full employment.
       1. Textbook's definition;
       2. NAIRU;
       3. Labor Market Demand & Supply definition;



16. Circular Flow Model Used in Macroeconomics (Chapter 7)
    1. Draw the circular flow of economic activity, labeling all economic actors, markets, and money flows.
    2. Point out on the graph (and explain in words) where one might build a dam or dams to measure GDP by:
       1. the expenditure approach--only one dam needed
       2. and also by the income approach.-- three dams needed


17. GDP (Chapter 7) A Primer on GDP and the National Income and Product Accounts
    1. Give the verbal definition of GDP including all major elements of it, and derive the general mathematical formula from this definition.
    2. Why are money prices used in calculating GDP?
    3. What items are not included in the calculation of GDP?
    4. How is it calculated using the expenditure approach?
    5. How is it calculated using the income approach?
    6. How is it calculated using the value added approach?
    7. Explain the problem of "double-counting" and how it can be avoided.


18. Discuss the strengths and weaknesses (i.e., problems) of using GDP data: (Chapter 7)
    1. to measure the social well being of a nation,
    2. in making comparisons of one nation to another,
    3. and in making comparisons of one time period in a given nation's history with another time period 100 years earlie in the same nation's history.
    (GDP facts),(Gapminder),(about Purchasing Power Parity, PPP index),(List of countries by GDP (PPP)),(CIA GDP/capita)



19. Suppose you are given the following information about some hypothetical economy and its national income accounts (which nonetheless closely follows the NIPA data for 2007 III annualized). Use this information to answer the questions that follow. (Amounts are in billions of dollars) (Chapter 6) (These figures are from the Bureau of Economic Analysis National Income and Product Account Tables which can be found at http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1.)
    

    Indirect Business Taxes	$919.0
    Corporate profits	$1208.9
    Corporate profits taxes	$469.4
    Retained earnings	$330.8
    Proprietors' income	$1038.4
    Rental Income	$62.1
    Net Interest	$1171.1
    Exports	$1685.7
    Imports	$2380.4
    Income Receipts from rest of world	$855.6
    Income Payments to rest of world	$754.9
    Net National Product	$12380.8
    Government expenditures for Goods and Services	$2716.5
    Personal current Transfer receipts	$1742.3
    Social Security Taxes (employee & employer)	$981.5
    Personal Consumption expenditures	$9785.7
    Gross Private Domestic Investment	$2162.9
    Disposable personal income	$10257.5

    
    
    1. Find GDP.
    2. Find the percentage Net Exports is of GDP.
    3. Find GNP.
    4. Find depreciation (capital consumption allowance).
    5. Find National Income.
    6. Find Wages and Salaries.
    7. Find the percentage 'Wages and Salaries' is of National income.
    8. Find Personal Income.
    9. Find Personal Income Taxes.
    10. Find Personal Saving.
    11. Find the percentage Personal Saving is of Disposable Personal Income.


20. Business Cycle  (Chapter 7)
    1. What is the business cycle?
    2. Draw a hypothetical graph of a business cycle labeling the five phases of the cycle.
    3. Explain what is happening during each phase of the cycle with:
       1. output,
       2. employment,
       3. and inflation. 


21. Aggregate Demand (Chapter 8)
    • Draw a graph of an Aggregate Demand Curve and list and explain the three reasons that the textbook gives for its slope.
    
    
22. Shifts in the Aggregate Demand Curve (Chapter 8)
    • Illustrate a change (or shift) in A.D. with a graph, and list and explain the things that might cause this shift.
     
23. Aggregate Supply--Short and Long Run (Chapter 8)
    1. Draw a graph of the Short Run Aggregate Supply curve and explain why it is upward sloping.
    2. Now, on the same graph, draw the Long Run Aggregate Supply Curve and explain why it is vertical.
    3. Explain what the intersection of the Short Run Aggregate Supply and the Long Run Aggregate Supply curves indicates in our model of the macroeconomic economy.
    
    
24. Shifts in the Aggregate Supply Curves (Chapter 8)
    1. List and discuss the things that will make the Short Run Aggregate Supply curve shift to the left or to the right. Illustrate.
    2. List and discuss the things that will make the Long Run Aggregate Supply curve shift to the left or to the right. Illustrate.
    
    
25. With the use of the Aggregate Demand and the Short Run and Long Run Aggregate Supply curves, explain and illustrate both long and short run equilibrium (one above and one below Long Run Equilibrium) and explain and illustrate the two basic causes of recession (one graph each). (Four graphs needed in all.) (Chapter 8 and 9)
    
    
26. Say's Law (Chapter 9)
    1. What is Say's Law?
    2. Explain why the classical economists thought there was no inherent tendency in the market system to overproduction, recession, and depression.
    3. How did the classical economists explain recessions?
    
    
27. Inflation, Recession, and Government Non-intervention -- The Classical View (Chapter 9)
    1. Draw an A.D./A.S. graph showing an inflationary gap.
    2. Draw an A.D./A.S. graph showing a recessionary gap.
    3. Using the same graphs you have drawn in A and B, show what the long run equilibrium position would be in each case if the government did nothing (i.e., let the economy self-adjust).
    
    
28. Explain Keynes' four main criticisms of classical economic theory as they relate to explaining the Great Depression. Note in your discussion what Keynes thought was the most important reason. (Chapter 10 and Lecture Notes)
    
    
29. List Keynes' four main criticisms of classical economic theory as they relate to explaining the Great Depression. Based on Keynes' main criticism of classical economic theory, explain what he proposed to do to get the U.S. and British economies out of the Great Depression. (Chapter 10 and Lecture Notes)
    
    
30. The Keynesian Framework of Analysis I: The Keynesian Consumption Function I (Chapter 10)
    1. What are the basic characteristics of the Keynesian consumption function?
    2. What is meant by "autonomous consumption"?
    3. What are the definitions of:
       1. Marginal Propensity to Consume,
       2. and Marginal Propensity to Save?
    4. How are MPC and MPS related?
    
    
31. The Keynesian Framework of Analysis II: The Keynesian Consumption Function II (Chapter 10)
    To show your understanding of the Consumption function, build a table with at least six income levels showing the following information:
    1. Disposable Income,
    2. Change in Disposable Income,
    3. Consumption,
    4. Change in Consumption,
    5. Marginal Propensity to Consume,
    6. Saving,
    7. Change in Saving,
    8. Marginal Propensity to Save.