Macroeconomics
ECON 2301
Spring 2011
Marilyn Spencer, Ph.D.
Professor of Economics
Chapters 6, 7, 8 & 14 Review
Exam 2
 Chapters 6, 7, 8 &14
 Study PPT slides
 Study assigned end-of-chapter questions
 Study with a friend
 Test format:
 Section 003 (10 a.m.) 25 multiple choice questions (+ 3 extra
credit)
 Section 004 (5:30 p.m.) 25 multiple choice questions (+ 3 extra
credit) for 60 minutes
 Questions include definitions, theory & applications
 Expect graphs and numbers.
 Scantron answer sheet provided
Test Resources Used
Please check any applicable box concerning "fees" for test
resources you plan to use DURING the exam:
 3x5 card with notes, 5 test points
 textbook and notebook, 15 test points
 information from others, 100 test points

Will NOT use additional resources*
* Two (2) points will be added to your score if you choose to
NOT use any of these test resources.
Name (please print):____________________
ID #: ______________________ (some portion of ID#)
Signature: ___________________________
Chapter 6 EXAM QUESTION TOPICS

Revenue sources of our federal government

Average tax rates v. marginal tax rates

Differences among proportional taxes, progressive taxes &
regressive taxes
Our federal personal income tax system, in terms of the 3
taxes above
Major issues of our social security tax system



How the taxes governments levy on purchases of goods and
services affect market prices and equilibrium quantities
Chapter 7 EXAM QUESTION TOPICS
 How the unemployment rate is calculated

Who’s in the labor force and who isn’t

Discouraged workers
 The 4 types of unemployment.
 Major price indexes & how they’re calculated
 Be able to interpret & use information from a price
index.
 Who loses and who gains from unanticipated inflation
 Key parts of a business cycle
 Know how to calculate the real interest rate.
Chapter 8 EXAM QUESTION TOPICS

Circular flow model:



What is purchased in factor markets & product markets by whom and from whom.
Income flows one way and resources/goods the other.
GDP


Formula for the expenditure approach to GDP
Why intermediate goods & used goods aren’t included

Why not all production gets counted

Limitations of GDP as a measure of national welfare.

Difference between real & nominal GDP

Per capita GDP for measuring standard of living

Foreign exchange rates
Chapter 14 Exam Question Topics:
 Federal budget deficit, surplus or balanced budget
 Largest spending categories of the federal budget
 How the federal government finances a budget deficit
 How a budget deficit can crowd out private spending
 Public debt:
 gross v. net
 burden to future generations: paying for it
 How to reduce the deficit
Assignment to be completed before
our next regular class:
Pre-read Chapter 15 & these end-of-chapter
Problems:
14th ed: 15-2, 15-4, 15-6, 15-8, 15-13, 15-14 & 15-15, on pp. 389-391;
15th ed: 15-2, 15-4, 15-6, 15-8, 15-13, 15-14 & 15-15, pp. 391-393.