Assignment

1) What are the four elements of GDP? Which of them is most important?

2) What is the formula for the expenditures method, and does it involve all income earned from sources in a country, or all expenses incurred (purchased) from sources in a country?

3 What's the difference between real and nominal GDP?

Discuss the following in at least one sentence each:

1) What do economists mean when they say that participants in the economy choose between present and future consumption?

2) Why are uncertainty, expectations, and shocks important in an economic system?

3) Do you think prices tend to be sticky?

1) Describe the difference between demand and quantities demanded. Describe the difference between supply and quantity supplied, and describe equilibrium?

1) What is the formula for the marginal propensity to consume?

2) How do economists think the multiplier works?

3) What does the 45 degree line represent in the aggregate expenditures model?

Discuss the following questions in one sentence each or more:

1) Who carries out monetary policy in the United States?

2) How does monetary policy work...how is it done?

3) Which is more effective...monetary policy or fiscal policy? Why?