Learning Outcome Statements

1. Gross Domestic Product

a. calculate and explain gross domestic product (GDP) using expenditure and income approaches;

b. compare the sum-of-value-added and value-of-final-output methods of calculating GDP;

c. compare nominal and real GDP and calculate and interpret the GDP deflator;

d. compare GDP, national income, personal income, and personal disposable income;

2. The Components of GDP and Related Measures

a. calculate and explain gross domestic product (GDP) using expenditure and income approaches;

b. compare the sum-of-value-added and value-of-final-output methods of calculating GDP;

c. compare nominal and real GDP and calculate and interpret the GDP deflator;

d. compare GDP, national income, personal income, and personal disposable income;

3. Aggregate Demand

e. explain the fundamental relationship among saving, investment, the fiscal balance, and the trade balance;

f. explain the IS and LM curves and how they combine to generate the aggregate demand curve;

4. Aggregate Supply

g. explain the aggregate supply curve in the short run and long run;

5. Shifts in Aggregate Demand and Supply

h. explain causes of movements along and shifts in aggregate demand and supply curves;

6. Equilibrium GDP and Prices

i. describe how fluctuations in aggregate demand and aggregate supply cause short-run changes in the economy and the business cycle;

j. distinguish between the following types of macroeconomic equilibria: long-run full employment, short-run recessionary gap, short-run inflationary gap, and short-run stagflation;

k. explain how a short run macroeconomic equilibrium may occur at a level above or below full employment;

l. analyze the effect of combined changes in aggregate supply and demand on the economy;

7. Economic Growth and Sustainability

m. describe sources, measurement, and sustainability of economic growth;

n. describe the production function approach to analyzing the sources of economic growth;

o. distinguish between input growth and growth of total factor productivity as components of economic growth.