ECON 1BB3 Study Guide - Final Guide: Fractional-Reserve Banking, Open Market Operation, Gdp Deflator

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Econ 1bb3 final exam review: macro definitions and data, measuring output (ch. Components of gdp important to understand what is included in each component (category) and be able to handle application questions. Calculation of the gdp deflator importance of real gdp (as a measure of well-being: measuring prices and inflation (ch. Problems with the cpi: substitution bias, new goods, unmeasured quality change. Comparison of gdp deflator and cpi (application questions) Ability to compare dollar figures from different years (simple ratio problem) Nominal vs. real interest rates indexing: the economy in the long run, economic growth (ch. Definitions: productivity, human capital, physical capital, natural resources, Catch-up effect (including diagram of production function) Use of public policy to encourage growth (pages 137-157: saving and investment (ch. Equilibrium interest rate, saving and investment. Crowding out be able to use diagram to answer questions about the variables (r, i, s, sp, sg), including magnitudes (for example, which change is larger,