macroeconomic assignment 1

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1. Define any 10 terms. Give examples where pertinent.

Macro Economics


Real capital




Consumer Price Index

Producer Price Index

Consumer spending



Opportunity cost


2. Essay Questions. Please answer all parts of each question. Choose either ONE:

  1. What is the business cycle? Demonstrate and explain?
  2. What is the importance of GDP?
  3. What is the distinction between nominal GDP and real GDP?
  4. From a macro-economic perspective, how do we measure economic growth? Explain, and give examples.
  5. How important do you think is the measurement of macro-economic growth?

What is the GDP price deflator?


  1. What is supply? What is demand?
  2. Develop a model of a market, utilizing supply and demand. What are the dominant variables or parameters?
  3. What is a shortage? What is a surplus? DEMONSTRATE (use model)
  4. Via the model, explain the dynamic changes that can happen in a market. Give examples.
  5. Relate the Micro economic model of supply and demand to the Macro-economic modal of Aggregate Demand and Aggregate Supply.

3. Essay Questions. Please answer all parts of each question.

  1. What is Aggregate Demand?
  2. Develop a model showing the importance and effects of Aggregate Demand on the overall economy.
  3. What is Fiscal Policy?
    1. What are the goals of Fiscal Policy?
    2. What are the tools of Fiscal Policy?
  4. Explain the how expansionary Fiscal Policy would be implemented.
  5. What is the presumed result of the use of Fiscal Policy?
  6. What are the criticisms regarding the use of Fiscal Policy?

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