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The Final Examination has 40 multiple-choice questions. The questions on the final are taken from the Margin Notes and presentations.  The following review is comprehensive. That means that if you see it here, you'll see it on the test. If you don't see it here, you're not responsible for it. Good luck on the final. Let me know if you have questions.

1. Define economics.

2. factors of production

3. comparative advantage

4. What are the three fundamental economic questions?

5. law of demand

6. law of supply

7. business cycle

8. What does movement along a demand curve indicate?

9. Of what are prices indicators?

10. equilibrium

11. What does an outward shift of the production possibilities frontier illustrate?

12. circular flow model

13. determinants of demand

14. determinants of supply

15. firm

16. economic models or theories

17. marginal analysis

18. When is an economy efficient?

19. What are externalities?

20. Equilibrium price and quantity are determined by the intersection of what?

21. gross domestic product (GDP)

22. What kind of unemployment occurs when workers’ skills do not match the jobs that are available?

23. Define inflation.

24. Households apply all of their disposable income to what?

25. What is the formula for the simple spending multiplier?

26. Know the difference between nominal and real.

27. What is Say’s Law?

28. Know the difference between automatic stabilizers and discretionary fiscal policy.

29. Which economists advocate laissez-faire and which advocate discretionary fiscal policy?

30. aggregate demand

31. What is the medium of exchange function of money?

32. Describe the difference between M1 and M2.

33. If the required reserve ratio is 10% and a bank has $1,000 in new deposits, what can you say about that bank’s required and excess reserves?

34. The quantity of money supplied is determined primarily by…

35. the decision-making lag associated with activist policy

36. What is a federal budget in the US?

37. What are entitlement programs?

38. Define economic growth.

39. What is dumping?

40. What characteristics distinguish developing countries from developed countries?