Content Area (Multiple-Choice Section) 

 

 I . Basic Economic Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . (8–12%)
      A . Scarcity, choice, and opportunity costs
      B . Production possibilities curve
      C . Comparative advantage, specialization, and exchange
      D . Demand, supply, and market equilibrium
      E . Macroeconomic issues: business cycle, unemployment, inflation, growth

 

II . Measurement of Economic Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . .  (12–16%)
      A . National income accounts 
            1 . Circular flow
            2 . Gross domestic product
            3 . Components of gross domestic product
            4 . Real versus nominal gross domestic product
       B . Inflation measurement and adjustment 
            1 . Price indices 
            2 . Nominal and real values 
            3 . Costs of inflation
       C . Unemployment
             1 . Definition and measurement
             2 . Types of unemployment
             3 . Natural rate of unemployment

 III . National Income and Price Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  (10–15%)
         A.  Aggregate demand 
               1 . Determinants of aggregate demand
               2 . Multiplier and crowding-out effects
         B.  Aggregate supply
               1 . Short-run and long-run analyses
               2 . Sticky versus flexible wages and prices
               3 . Determinants of aggregate supply
         C . Macroeconomic equilibrium 
               1 . Real output and price level
               2 . Short and long run
               3 . Actual versus full-employment output
              4 . Business cycle and economic fluctuations

 IV . Financial Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . .(15–20%)
         A . Money, banking, and financial markets
               1 . Definition of financial assets: money, stocks, bonds
               2 . Time value of money (present and future value)
               3 . Measures of money supply
               4 . Banks and creation of money
               5 . Money demand
               6 . Money market and the equilibrium nominal interest rate

         B . Loanable funds market
              1 . Supply of and demand for loanable funds
              2 . Equilibrium real interest rate
              3 . Crowding out
         C . Central bank and control of the money supply 
             1 . Tools of central bank policy
             2 . Quantity theory of money
             3 . Real versus nominal interest rates

 V . Stabilization Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . (20–30%)
       A . Fiscal and monetary policies
             1 . Demand-side effects
             2 . Supply-side effects
             3 . Policy mix
             4 . Government deficits and debt
       B . The Phillips curve
             1 . Short-run and long-run Phillips curves
             2 . Demand-pull versus cost-push inflation 
             3 . Role of expectations
 

VI . Economic Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . .. . . . .  (5–10%)

        A . Definition of economic growth
        B . Determinants of economic growth
              1 . Investment in human capital
              2 . Investment in physical capital
              3 . Research and development, and technological progress
       C . Growth policy

 

VII . Open Economy: International Trade and Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . (10–15%)

         A . Balance of payments accounts 
               1 . Balance of trade
               2 . Current account
               3 . Financial account (formerly known as capital account) 
         B . Foreign exchange market 
              1 . Demand for and supply of foreign exchange
              2 . Exchange rate determination
              3 . Currency appreciation and depreciation 
          C . Imports, exports, and financial capital flows 
          D . Relationships between international and domestic financial and goods markets