This midterm will be held partially online using Respondus LockDown Browser and Zoom, and also have a take-home component

  • Online - you are allowed a pencil and paper. I will not accept this work for any credit though.
  • A calculator will be embedded .
  • Both portions of the exam are open-note, but do not count on being able to sort through your notes during the online exam.
  • About 2/3 of the grade is the online part, and 1/3 is the take-home portion
  • The take home exam will require you to scan and upload a single PDF. Download one of the apps listed here - Scanning Apps

Some materials to study

  • Go back through readings & terms for all chapters related to modules and video lectures 1-7 (lecture 0 is not specifically on exam)
  • Review CQ1, CQ2, CQ3, CQ4, CQ5, CQ6, CQ7, paying close attention to the problems listed below:
    • CQ1: #5, 13
    • CQ2: #8, 20, 24, 27, 28, 29, 30, 31, 32, 33, 34
    • CQ3: #5, 10, 11, 15, 17
    • CQ4: #9, #13, #14, #15, and while you did OK on these other questions, please review (#1, #4, #5, #6, #7, #8, #11)
    • CQ5: #5, #8, #9, #11, #15, #16, #19, #22, #25, #26, #28, #29, #30, #31, #32
    • CQ6: #6, #8, #9, #11, #12, #15, #16
    • CQ7: #6, #7, #11, #12, #15, #16
    • Review FW0-7 and VQ0-7 for more help
  • Get a good grasp on the big questions. The exam is not limited to this, but these are the major point value questions.
    • Opportunity cost, comparative and absolute advantage
    • Cost benefit & decisionmaking
    • Factors of production
    • Efficiency v. Equity
    • GDP (expenditure approach, nominal, real, potential, and per capita measures)
    • Growth v. cycle
    • Rate of change equation: $\%\Delta=\frac{New-Old}{Old}\times 100$
      • Same as $\%\Delta=\left(\frac{New}{Old}-1\right)\times 100$
    • Compound growth equation: $PV=\frac{FV}{(1+i)^n}$
    • Rule of 70
    • The economic takeoff-role of technology & institutions
    • Inequality within & between countries over time
    • Phases of business cycle
    • Fiscal v. Monetary policy
    • Labor market statistics: unemployment rate (U-3 or official): $\frac{\text{unemployed}}{\text{unemployed+employed}}$
    • Labor market statistics: unemployment rate (U-6): $\frac{\text{unemployed+involuntary part time+discouraged & marginally attached}}{\text{unemployed+employed+discouraged & marginally attached}}$
    • Labor market statistics: labor force participation rate: $\frac{\text{unemployed+employed}}{\text{working-age population}}$
    • Labor market statistics: employment to population ratio: $\frac{\text{employed}}{\text{working-age population}}$
    • Types of unemployment: frictional, structural, & cyclical
    • Natural rate of unemployment
    • Okun’s Law: $\frac{Y-Y^*}{Y^*}=-2(u-u^*)$
    • Price level, inflation, deflation, disinflation, accelerating inflation (and how to calculate given data)
    • Budget deficit/surplus v. debt
    • Trade deficit/surplus/balanced
    • Fisher equation: $r=i-\pi$
    • Money’s functions
    • Assets & wealth v. income, net income, & savings: which are stocks & flows?
    • Monetary aggregates: $\text{M0}=\text{Reserves}+\text{Currency & coins in circulation}$
    • Monetary aggregates: $\text{M1}=\text{Currency & coins in circulation}+\text{Deposits}+\text{Travelers Checks}$
    • Monetary aggregates: $\text{M2}=\text{M1}+\text{Savings (MMDA)}+\text{MMMF}+\text{Small-denominated time deposits (CDs)}$
    • Balance sheets: $\text{assets}=\text{liabilities}+\text{net worth}$
    • Importance of capital requirements & reserve requirements
    • Leverage ratio
    • Fed & its structure (who is chair?) and the FOMC structure
    • Central bank tools, targets, & goals
    • Review and practice problems calculating unemployment rates, inflation rates, interest rates and GDP growth rates
    • New Chapter for banking please read!!!
      • Firm structure & information issues (principal-agent, asymmetric information)
    • Moral hazard & adverse selection
    • Gini coefficients & Lorenz curves - can you draw and solve???
    • Stock pricing and returns,
      • $\frac{Div_1}{i-g}$ or
      • $P=\frac{\text{Future Price}+\text{Dividends}}{(1+i)}$
    • $\text{Div Yield}=100\times \frac{\text{Div}}{\text{Price}}$
    • Bond pricing and returns
      • $\frac{C_1}{(1+i)^1}+\frac{C_2}{(1+i)^2}+\ldots+\frac{C_n}{(1+i)^n}+\frac{F}{(1+i)^n}$
    • Relationship between interest rates and bond/stock prices
    • GDP calculation (nominal and real)
    • Growth rates of real GDP (finding annual averages)
    • Calculating inflation with GDP deflators and CPIs, $\text{GDP Deflator}=\frac{NGDP}{RGDP}\times 100$
      • Deflator fix prices in base year
      • CPI fix quantities in base year
    • Calculating CPIs
    • Adjusting prices/wages to compare “real” values at various points in time (forwards and back)
      • $Nominal wage_{YR1} \times \frac{CPI_{YR2}}{CPI_{YR1}}=Real wage_{YR2}$
    • Anticipated v. Unanticipated inflation
    • Calculate growth of real prices/wages
    • Supply and demand, manipulating curves and comparative statics
    • Surplus v. shortage
    • Total savings, $(S_\text{total}=Y-C-G-NX)$
      • OR $(S_\text{total}=S_\text{public}+S_\text{private}+S_\text{foreign}=I)$
    • Components of savings
      • National savings, $(S_\text{national}=Y-C-G)$
      • Foreign savings, $(S_\text{foreign}=-NX)$
      • Public savings, $(S_\text{public}=T-G-TR)$
      • Private savings, $(S_\text{private}=Y+TR-T-C)$
    • The components of GDP, $Y=C+I+G+NX$
    • Economic v. financial investment

HELP on Compound Growth Equations (i.e., the Present Value Formula) and Gini Coefficients

HELP on Capital & Labor Markets and Unemployment

HELP on Banks and Lending

HELP on Bonds & Present Value

HELP on GDP, Savings & Inflation (also for Unit 6)