Macroeconomics

1. What role do sticky prices have when determining output in the short-run vs. the long-run?

2. What are the components of aggregate demand and what are the reasons it is sloped downwards?

3. What causes a shift in the aggregate demand curve?

4. Explain and apply the multiplier to changes in the demand and the equilibrium output.

5. What causes the long-run and short-run supply curves to differ?

6. Please give an example of a supply shock and explain its impact on the economy.

7. Please explain the components of fiscal policy and the categories of fiscal policy.

8. Explain and apply the fiscal multiplier.

9. Why is it so difficult to implement stabilization policies?

10. What are the main sources of Federal Spending and Income? Why are federal costs increasing so dramatically?

11. When would supply-side economics and the Laffer Curve be applicable? When wouldn’t they be applicable?

12. Please explain the role of automatic stabilizers.

13. Explain and interpret the income-expenditure model.

14. Use the consumption function and the MPC to calculate equilibrium output.

15. Utilize the government spending multiplier and the tax multiplier to determine equilibrium output.

16. Include imports and exports when explain the income-expenditure model, i.e. MPI.

17. Explain the accelerator theory and the multiplier-accelerator model.

18. Calculate present value and select an investment.

19. Explain the relationship between nominal and real interest rates.

20. Explain the role of financial intermediaries and why they malfunction.