Study Guide for First Exam
Econ. 2133, Spring 2010
Exam Format: Exam will include 33 multiple choice questions @ 3 points each = 100 points
total. Questions will be in the style of the review questions and problems in your study guide.

You must bring a “bubble sheet” (opscan form) and 1 or more #2 pencils for recording
your answers.
 You must also have a calculator.
Subject Emphasis and Study Suggestions:
Chap. 4 (8 quests.) How is economic growth measured? Why/how has U.S. economic
growth improved our standard of living in recent decades? How does high
unemployment affect our standard of living? What is a “business cycle?” What are the
two “phases” of the business cycle? What is the general focus of study in
macroeconomics? How does “aggregation” help us study the macroeconomy? What
three macroeconomic goals are generally agreed to be most important?
Study/review recommendations: Aplia – What Macroeconomics Tries to Explain (I &
II).
Chap. 5 (9 quests.) Be familiar with the word definition of “GDP.” What categories of
spending are included in the expenditures approach to measuring GDP? Classify specific
expenditures as to whether they are C, I, G, Ex, or Im. What three things are included in
I? Calculate GDP via the expenditures approach (with given data). What expenditures
are never included in the calculation of GDP? What is the difference between nominal
and real GDP? Define “full employment.” Calculate an unemployment rate (with given
data).
Study/review recommendations: Aplia – Production, Income, and Employment (I & II).
Chap. 6 (8 quests.) What is a price index? What things (in general terms) are included
in the CPI? Interpret changes in a price index over time. Why does the CPI “market
basket” include different proportions (weights) if different products? Use CPI data to
convert nominal values to real values (calculation). What does a real wage rate measure?
What “harm” does inflation cause within an economy? Calculate a real interest rate (with
given data).
Study/review recommendations: Aplia – The Price Level and Inflation (I & II).
Chap. 8 (8 quests.) What are the three most important sources of economic growth?
How have U.S. labor demand, labor supply, and real wages changed in the last century?
How does increased capital stock affect productivity and the standard of living? List the
govt. economic policies that could increase the economy’s capital stock, productivity,
and standard of living (study govt. economic policies that could increase both the demand
for and supply of loanable funds; or that could increase productivity in general). How do
govt. budget deficits reduce investment spending? How does technological change affect
an economy’s output and productivity?
Study/review recommendations: Aplia – Economic Growth and Rising Living
Standards I.