Exam 3 Review
Chapter 24

Explain why economists focus on GDP; inflation; and unemployment when assessing the he
alth of an entire economy.

Describe why economists believe that "shocks" and "sticky prices" are responsible for shortrun fluctuations in output and employment.

Characterize the degree to which various prices in the economy are sticky.
Chapter 25

Explain how gross domestic product (GDP) is defined and measured.

Describe how expenditures on goods and services can be summed to determine GDP.

Explain how GDP can be determined by summing up all of the incomes that were derived fr
om producing the economys output of goods and services.

Describe the relationships among GDP; net domestic product; national income; personal inc
ome; and disposable income.

Discuss the nature and function of a GDP price index; and describe the difference between n
ominal GDP and real GDP.
Chapter 26

List two ways that economic growth is measured.

Define "modern economic growth" and explain the institutional structures needed for an eco
nomy to experience it.

Identify the general supply; demand; and efficiency forces that give rise to economic growth

Describe "growth accounting" and the specific factors accounting for economic growth in th
e United States.

Explain why the trend rate of U.S. productivity growth has increased since the earlier 19731995 period.
Please review all the problems assigned in class, in addition to the articles in the book (Consider
This)