APMACROECONOMICS – Unit Three

Welcome to how we measure our economy’s performance.

For every chapter make sure you understand the meaning of the basic terms, especially the ones in blue in purple in the margins. These are the words that will be tested on your vocabulary quizzes. If you don't know the terminology, you can't understand the concepts. Also, do your homework. This doesn't mean copy your neighbors. You can't pass the tests if you don't know how to do the problems. IF YOU DON”T READ, DON”T BE SURPRISED WHEN YOU GET A ZERO ON THE TESTS! Quizzes/tests are based on reading and homework problems.

For each chapter, you must turn in an analysis of a current magazine article dealing with economics. Find an article, read it, analyze it, and write a two paragraph analysis of the article. The first paragraph should summarize the article and the second paragraph should explain how it is tied to what you are studying in the chapter. This has to be typed and you must properly cite the article. The article has to be one page long, not one paragraph long.

There will not be a chapter test. These two chapters will be tested together in one unit test. There will be a no notice reading quiz on each chapter.

GET GRAPH PAPER. YOU WILL NEED IT

Chapter Twenty-Three:

These are concepts you should know for the test.

1. Know all the vocabulary words in purple.

2. Understand GDP’s relationship to the circular flow.

3. Know what each phrase in the GDP definition refers to.

4. Know the GDP formula and know it well.

5. Know exactly what is being measured in consumption, investment, government purchases, and net exports.

6. Differentiate between real and nominal GDP.

7. Calculate real and nominal GDP using the GDP Deflator. Know the formula.

8. Explain why GDP is not a good gauge of economic well-being.

9. Define GDP per capita. Google it. Know the GDP per capita of the United States.

10.Describe the underground economy.

Homework:

Questions for Review: All Problems: 1, 2, 3, 9, and 10

Chapter Twenty-Four:

These are concepts you should know for the test.

1. Know all the vocabulary words in purple

2. Know how the CPI is calculated and be able to calculate the CPI.

3. Know what the typical consumer spends his/her money on (typical basket of goods and services).

4. Describe the problems associated with measuring the cost of living.

5. Describe the differences between the GDP deflator and the CPI.

6. Describe what is meant by indexing for inflation and give an example.

7. Differentiate between real and nominal interest rates.

8. Know how to calculate the real interest rate.

Homework:

Questions for Review: All Problems: 6, 8, 9, and 10

If you are struggling, there is lot of written information on the web, both in written and video format. GOOGLE IT.