Review+Work

**Exam Review schedule**
Read chapter 1,2 Miller 1. Explain trade off. 2. Why is a PPC not shown as a straight line. Explain the underlying assumptions and its depiction of growth in an economy.

Read chapters 3, 4, 5, 6, 20, 21, 32 1. Evaluate the importance of price in allocating scarce resources. 2. Evaluate the proposition that government intervention in the market for tobacco is justified. 3. Evaluate the possible consequences of implementing maximum and minimum price controls. 4. What factors determine the price and income elasticities of demand for a product? 5. Why might firms be interested in price, income and cross price elasticity of demand for various products? 6. Why are environmental problems considered to be an example of market failure. 7. Carefully distinguish between merit, demerit and public goods.
 * Micro economics**

Read chapters 7, 8, 10, 11, 12, 13
 * Macro economics**

1. Describe, using a diagram, the circular flow of income in an open economy with government and financial markets, referring to leakages/ withdrawals and injections. 2. Explain how fiscal policy could be used to increase aggregate demand. 3. Explain, using a diagram, that if the economy is in equilibrium at a level of real output below the full employment level of output, then there is a deflationary (recessionary) gap. 4. “In the long-run, a country’s economic performance can only be improved through the implementation of supply-side policies.” Evaluate this statement. 5. There are various types of unemployment. Explain how any three types of unemployment may cause a rise in the unemployment rate of an economy. 6. Evaluate the view that the unemployment rate can be most effectively reduced through the use of measures designed to increase aggregate demand in an economy. 7. Evaluate the use of national income statistics, including their use for making comparisons over time, their use for making comparisons between countries and their use for making conclusions about standards of living. 8. Explain, using a business cycle diagram, that economies typically tend to go through a cyclical pattern characterized by the phases of the business cycle. 9. Discuss the possible consequences of a high inflation rate, including greater uncertainty, redistributive effects, less saving, and the damage to export competitiveness. 10. Evaluate the effectiveness of fiscal policy through consideration of factors including the ability to target sectors of the economy, the direct impact on aggregate demand, the effectiveness of promoting economic activity in a recession, time lags, political constraints, crowding out, and the inability to deal with supply-side causes of instability. 11. Explain the relationship between budget deficits/ surpluses and the public (government) debt.

1. Money supply affects aggregate demand. Explain. 2. How does Federal Reserve's Open Market operations influence market interest rates? 3. Data response question (Q#3 Required)
 * Monetary policy & International economics**

1. Explain the gains from trade. 2. Explain, using a tariff diagram, the effects of imposing a tariff on imported goods on different stakeholders. Also explain other protectionist policies. 3. Evaluate the economic effects of regional trade blocs.

4. Explain with a diagram the determination of exchange rates in a floating exchange rate system. 5. Evaluate the possible economic consequences of a change in the value of a currency, including the effects on a country’s inflation rate, employment, economic growth and current account balance. 6. Current account deficit is a problem. Explain.

Read chapters 9, 19, 31
 * Development economics**

**April 23, 25** **Mock Exams**