- CFA Exams
- Dec. 2020 Level 1
- Study Session 4. Economics I
- Reading 14. Aggregate Output, Prices, and Economic Growth
Reading 14. Aggregate Output, Prices, and Economic Growth
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Learning Outcome Statements
| Reading 14. Aggregate Output, Prices, and Economic Growth | |
|---|---|
| 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. |