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Revision: Principles of Macroeconomics

This document outlines lecture topics for a principles of macroeconomics course, including: 1) Unemployment types like frictional and structural unemployment, and policies to deal with them. 2) The monetary system including the functions of money, how banks create money, and the Fed's monetary tools. 3) Money growth and inflation, including the money supply-demand diagram and costs of inflation. 4) Aggregate demand and aggregate supply analysis, how shocks affect the economy, and stagflation. 5) Monetary and fiscal policies, how interest rates and price levels affect money demand, and the effects of different policy types on the economy.

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Khanh Vu
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65 views8 pages

Revision: Principles of Macroeconomics

This document outlines lecture topics for a principles of macroeconomics course, including: 1) Unemployment types like frictional and structural unemployment, and policies to deal with them. 2) The monetary system including the functions of money, how banks create money, and the Fed's monetary tools. 3) Money growth and inflation, including the money supply-demand diagram and costs of inflation. 4) Aggregate demand and aggregate supply analysis, how shocks affect the economy, and stagflation. 5) Monetary and fiscal policies, how interest rates and price levels affect money demand, and the effects of different policy types on the economy.

Uploaded by

Khanh Vu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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REVISION

PRINCIPLES OF MACROECONOMICS

Prepared by: Dr. Minh Huynh

 EASTERN INTERNATIONAL UNIVERSITY 1


Lecture 5: Unemployment
● How to calculate u-rate, disadvantages…
● Distinguish frictional unemployment & structural
unemployment.
- What are the causes/reasons of each type of
unemployment?
- Policies to deal with frictional unempoyment?
● Active learning 2 ( which events that reduce/rise
frictional/structural unemployment).

2
Lecture 6: The Monetary System
● List and describe the three functions of money,
the two kinds of money. M1?
● Describe how banks create money (briefly)
● Compute money multiplier
● Liquidity
● List and describe three tools in the Fed’s
monetary toolbox.

3
Lecture 7: Money Growth & Inflation
● The Money Supply-Demand Diagram.
● The classical Dichotomy, The neutrality of money.
● How to calculate the velocity of money.
● The Inflation Tax
● The Fisher Effect.
● Some costs of inflation: Shoeleather cost, tax
distortion (lessons from active learning 3).

4
Lecture 8: AD & AS
● AD
– Explain the three reasons the AD curve slopes downward.
– What variables can shift the AD curve?

● AS
– Explain why the long-run AS curve is vertical.
– Explain three theories for why the short-run AS curve is
upward sloping.
– What variables shift both the long-run and short-run AS
curves? What variable shifts the short-run AS curve but
not the long-run AS curve?

5
Lecture 8: AD & AS
● Use the Framework of 4 steps for analyzing
economic fluctuation (caused by an event such as
economic boom, a wave of pessimism, a wave of
optimism…)
● Stagflation

6
Lecture 9: Monetary & Fiscal Policies
● The determinants of money demand. Active learning
1. (how r & P affect money demand)
● How the Interest-Rate Effect Works (How changes in
price level affect money demand, r, I & Y).
● 2 types of monetary policy, 2 types of fiscal policy:
 When the Fed/Govt. use?
 How does it affect AD?
 Advantages?
 Disadvantages?
● Multiplier effect, crowding-out effect.

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