The Final Exam will be held in our regular classroom at the regular time
- Bring a pencil
- Bring a calculator
- You are not allowed outside paper
- https://www.jmu.edu/registrar/wm_library/fall_exam_schedule.pdf
First, look at the midterm study guides. All that material is fair game for the exam
- This is a comprehensive final exam
- The exam will probably be about 40% new material, and 30% from each midterm
- The grade will be about 1/3 written and 2/3 multiple choice exam
Some materials to study
- Review Canvas Quizzes (CQ): Bold indicates you should take another look
- Note: DO NOT submit any remaining attempts these assignments, as it will convert any grade you had previously received to a zero and thus negatively impact your grade.
- CQ1: #7, 13
- CQ2: #8, 10, 20, 24, 27, 28, 29, 30, 31, 32, 33, 34
- CQ3: #5, 10, 11, 15, 17
- CQ4: #8, 11, 13, 14 and closely review #1, 4, 5, 6, 7
- CQ5: #8, #9, #11, #16, #19, #22, #25, #26, #32
- CQ6: #9, #11, #12, #15, #16
- CQ7: #6, #7, #11, #15, #16
- CQ8: #4, ,#5, #8, #9, #14, #17
- CQ9: #9 and #13, but also look at #2, #4, #8, #10
- CQ10: Look over #2, #6, #7, #11-15
- CQ12: Review - #1, #3, #4, #5, #8, #9, #12, #14, #21
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Review FlatWorld Assignments for more help
- Review Midterm take home questions
- Midterm 1 Numbers: 1, 4, 5, 10, 11, 14, 15, 20, 22, 24, 28, 29, 30
- Midterm 2 Numbers: 3, 4, 5, 7, 8, 9, 11, 12, 13, 14, 15, 16, 17, 22, 23, 25, 26, 27, 30
- Go back through readings & terms for all chapters related to lectures
New Material (Units 8-12)
- Get a good grasp on the big questions. The exam is not limited to this, but this hits on the major point value questions.
- Understand marginal revenue product and the demand for labor and capital
- Production functions and diminishing marginal product of capital & labor
- Also know how to calculate and interpret productivity functions
- Importance of technology v. additions of capital or labor
- Savings and Investment model (discussed as part of Unit 11) helps us determine “neutral interest rates”
- How things like optimism, increased/decreased government spending, or increased/decreased taxes will impact interest rates
- How interest rates affect exchange rates
- Aggregate Expenditure model
- Understand mpc and the consumption function (“what is disposable income?”)
- Understand what the fiscal/spending multiplier is, and how to find it
- Know how to sketch the Keynesian Cross diagram
- How do you identify output gaps? Can these persist at equilibrium?
- How could you use government policy (tax or spending) to eliminate any output gaps?
- The Economic Fluctuations model
- How to sketch out the AD line. What are the axes? Why does the line slope downward?
- What is the IA line? Why will it tend to return to the value it should be at in the long-run?
- What is the Fed’s role in pushing the economy back to this long-run inflation rate?
- How does a change in government spending or taxation impact the AD line in the short-run, and what do we expect in the long-run?
Earlier Material
- Opportunity cost, comparative and absolute advantage
- Cost benefit & decisionmaking
- Factors of production
- Production function & difference between total product, marginal product, and average product $Y=AK^{0.5}L^{0.5}$
- Efficiency v. Equity
- Positive v. Normative
- GDP (nominal, real, potential, and per capita measures)
- Growth v. cycle
- Rate of change equation: $\%\Delta=\frac{New-Old}{Old}\times 100$
- 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, $\text{GDP Deflator}=\frac{NGDP}{RGDP}\times 100$
- Calculating CPIs
- Adjusting prices/wages to compare “real” values at various points in time (forwards and back)
- $\text{Nominal wage (YR1)}\times \frac{\text{CPI (YR2)}}{\text{CPI (YR1)}}=\text{Real wage (YR2)}$
- Anticipated v. Unanticipated inflation
- Calculate growth of real prices/wages
- Supply and demand, manipulating curves and comparative statics
- Surplus v. shortage
- Basic understanding of price floors and ceilings
- Understanding of market failure and externalities
- 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
Equations (A Summary)
$ \%\Delta=\frac{new-old}{old}\times 100 $
$ PV=\frac{FV}{(1+i)^n}$ with $ i $ in decimal form
$ \text{approx time to double}=\frac{70}{g} $
$ r=i-\pi $ where $\pi$ is the rate of inflation
$ Y=C+I+G+NX $
$ S_{public}=T-G-TR $, $S_{private}=Y+TR-T-C$, $S_{national}= S_{public}+S_{private}$
$ S_{total}=S_{public}+S_{private}+S_{foreign} $
$ S_{foreign}=-NX $
$ 1= C/Y + I/Y + G/Y + NX/Y $
$ \frac{NG}{Y^{*}}=1-\frac{G}{Y^{*}} $
$ \frac{Y-Y^{*}}{Y^{*}}=-2(u-u^{*}) $ with $ u \text{ and } u^{*} $ in decimal form OR
$ 100 \times \frac{Y-Y^{*}}{Y^{*}}=-2(u-u^{*}) $ with $ u \text{ and } u^{*} $ in percentage form
$ PAE=C+I^p+\bar{G}+\bar{NX}$
$ Y=PAE \text{ @ } Y^e$
$ \frac{1}{1-mpc} $
$ Y=AK^{0.5}L^{0.5} $
$ \frac{Y}{L}=A \left(\frac{K}{L}\right)^{0.5} $
$ \text{U-3 Unemployment}=100 \times\frac{\text{unemployed}}{\text{unemployed+employed}} $
$ \text{Labor Force Participation}=100 \times\frac{\text{unemployed+employed}}{\text{population}} $
$ \text{GDP Deflator}=\frac{\text{Nominal GDP}}{\text{Real GDP}} \times 100 $
Additional Help Videos
- On my webpage https://aneveu.com/econ200 you will find numerous video help files to help you work through this material. They are arranged by lecture, and you can find the help videos under each corresponding HELP section!