Macro Learning Objectives for questions over Exam 1 Form A

 

PCM

 ECON 2301 MACROECONOMICS   

Chapter 9

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 2 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 9, you should be able to:
  1. Explain how fiscal policy differs from monetary policy, what expansionary fiscal policy and fiscal stimulus mean, what contractionary fiscal policy and fiscal drag mean, and what is economists mean when they refer to the multiplier effect, output gap, and recessionary and inflationary gaps. (Section 9.1)
  2. Discuss how fiscal policy meant to stabilize the economy is subject to lags which can make it less effective, how some of the lags can be overcome by automatic stabilizers, and how the crowding out effect can also make fiscal policy less effective than planned. (Section 9.1 and 9.2)
  3. Define and discuss the following terms: government budget, balanced budget, budget deficit, budget surplus, full employment budget, and the national debt. (Section 9.1)
  4. Identify the characteristics and significance of short-run aggregate supply, and explain the price level expectations in the SRAS curves relation to the long-run aggregate supply. (Section 9.2)
  5. Compare Short Run Macroeconomics Equilibrium to Long Run Macroeconomic Equilibrium. (Section 9.2)
  6. Describe demand-pull and cost-push inflation, and illustrate these phenomenon with the use of graphs. (Section 9.2)
  7. Explain how an economy might suffer from an inflationary spiral, and explain the nature of the Phillips curve in the short and the long run. (Section 9.3)
  8. Compare and contrast the Keynesian view of fiscal policy with the classical view, especially concerning adaptive expectations and rational expectations, and discuss what implications adaptive expectations model and rational expectations model have for the nature of the Phillips curve. (Section 9.3)
  9. Analyze the rationale and limitations of the definition of deficit spending and the national debt while focusing on whether the national debt will be a burden on future generations. (Section 9.4)
  10. Discuss how the budget deficit is related to the trade deficit and whether these deficits and the debt they add to are a threat to the well being of the United States. (Section 9.4)