Study Guide 3 Macroeconomics

Chapter 23 Output and Expenditure

1. AE model
2. Condition for macroeconomic equilibrium
3. Causes of short-run economic fluctuations
4. Determinants of AE
5. Consumption function
6. Marginal propensity to consume
7. Consumption and national income: MPS
8. Graphing macroeconomic equilibrium
9. The multiplier effect
10. Aggregate demand curve

Chapter 25 Money, Banks and the Federal Reserve

1. Definition of money
2. Functions of money
3. Types of money
4. M1 and M2
5. How banks create money: simple deposit multiplier
6. The history and structure of Fed
7. Fed’s monetary tools
8. The quantity theory of money

Chapter 24 AD and AS analysis

1. Factors shift AD curve and why AD is downward sloping

2. Factors shift LRAS and SRAS and why LRAS and SRAS are in different shapes
3. AD and AS and economic equilibrium
a. Recession
b. Expansion