Section 4 Review

In class we reviewed Section 4 and took a quiz on the material.  Afterwards, students were given a review of Section 5.   The homework is linked below.


HW - Section 5 Review
          Read Module 41 (if you have not done so already) and Module 42

Section 7 Review/Section 3 Quiz

In class we reviewed the material for Section 7 focusing on Long Run Economic Growth.  Afterwards, students took a quiz on the material from Section 3 - Output, Unemployment and Inflation.

The notes are attached and the homework is attached/listed below.

Notes - Section 7 Review

HW - Section 4 Review 
       - Read Module 41

Is Long-Term Economic Growth Sustainable?

In class we spent time talking about how countries achieve and maintain economic growth.  Be familiar with Thomas Malthus and his theory that in the long run population growth would deplete the limited resource base leading to famine, disease and war.

The notes are attached and the homework is listed below.

Notes - Is Long-Term Economic Growth Sustainable?

HW - Complete Multiple Choice Questions in Modules 37-40
          Section 3 Review

Long-Term Economic Growth and The Aggregate Consumption Function

In class students learned about the most pressing issue in macroeconomics - long-term economic growth.  Economic growth is measured in real GDP per capita over time (standard of living).  Economic growth is the result of increases in Labor Productivity - (1) Human Capital (education/training), (2) Physical Capital (machinery/infrastructure) and (3) Technology. 

Afterwards students were introduced to the aggregate production function which plotted the positive (but diminishing) relationship between physical capital and real GDP per capita.  Technological progress shifts the curve outward.


The notes are attached and the homework is listed/attached below.

Notes - Long Term Economic Growth and Aggregate Consumption Function

HW - Review - Section 2 - Supply/Demand Curve
          Read Module 38 and Module 39

Section 6 Review - Inflation, Unemployment and Stabalization Policies

In class we reviewed Section 1 - the production possibilities frontier, opportunity cost, marginal cost, absolute/comparative advantage.  Afterwards, we reviewed Section 6.

The notes and Section 6 Quiz are attached below.

Notes - Section 6

Quiz - Section 6

HW - Section 6 Quiz
          Review Section 1 (Modules 1- 4)
          Read Modules 37 and 38

Video - Production Possibilities Frontier

The History of Macroeconomic Theory

In class we reviewed the Phillips Curve which is a model that shows the negative relationship between inflation and unemployment.  Movements along the SRPC are from GWEP and shifts in the SRPC are PNC.

Afterwards, we touched on the history of Macroeconomic Theory.  Students should be familiar with the Classic Model of Price Level, Keynesian Economics, Monetarism, The Natural Rate Hypothesis, Rational Expectations and the real Business Cycle Theory.

Finally, we talked about modern economic thought and that the primary role of the Fed is dealing with inflation and unemployment.

Notes - History of Macroeconomic Theory

HW - Read Module 37
          Finish Review Packet
          Module 35/36 ?s

The Phillips Curve

In class students learned about the economic model that shows the negative relationship between inflation and unemployment: The Phillips Curve (technically the short-run Phillips curve).  Shifts in the SRPC are a result of changes in expected inflation (increase expected inflation; SRPC shifts up) and changes in inputs - Productivity, Nominal Wages, Commodity Prices.  An example would be an increase in commodity prices would shift the SRPC up.  Below I also attached a video describing the Phillips Curve on Khan Academy.

Khan Academy - Phillips Curve

The notes are attached as is a review packet that is due Tuesday, December 9th.

Notes - The Phillips Curve

Macroeconomics Review Packet

HW - Read modules 35 and 36

Inflation and Hyperinflation

In class students learned about why the US follows a policy of moderate inflation (2-3%).  We also discussed the problems with tying to reduce inflation, for example from 15% to 5% (see Aggregate Demand/Aggregate Supply Curve for problems).  We also talked about hyperinflation and why it occurs.  Finally, we talked about the classical model of price level (vertical supply curve) and is a good model for hyperinflation but not so much for the US economy.

The notes are attached and the homework is listed below:


Notes - Inflation, Hyperinflation, Disinflation, Deflation


HW - Read Module 34