PCM

 ECON 2301 MACROECONOMICS   

Chapter 10

Below you will find the learning objective, concept, idea, term, or theory that each question on the exam will cover. The numbers in the list refer to the question number on Exam 3 that will test your knowledge of that specific learning objective. Each of these topics/learning objectives is discussed in the textbook in the order that they are listed below.  A much better understanding can often be attained by working through the "active graphs" and "smart graphs" connected to many of these objectives in the online material.

 
    After reading Chapter 10, you should be able to:
  1. Illustrate the income–expenditure model and identify points and curves in that illustration. (Section 10.2)
  2. Define and distinguish between induced spending and autonomous spending and explain how income, consumption, and saving are related. (Section 10.2)
  3. Define and show graphically the marginal propensity to consume and the marginal propensity to save. (Section 10.2)
  4. Explain the adjustment process to an expenditure equilibrium and how inventories play a role in it. (Section 10.2)
  5. Describe how new autonomous spending can have a ripple effect throughout the economy. (Section 10.3)
  6. Calculate numerical examples of the multiplier effect and explain how it can magnify the effects of the Paradox of Thrift (Snapshot 10.3) changes in Consumer Confidence (Snapshot 10.2). (Section 10.3)
  7. Illustrate inflationary and recessionary gaps on the income-expenditures model. (Section 10.3)
  8. Distinguish the regular multiplier from the tax multiplier and the balanced-budget multiplier. (Section 10.3)
  9. Graph the relationship of the income–expenditure model to aggregate demand. (Section 10.4)
  10. Compare economic analyses of the Great Depression. (Section 10.5)