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UF - ECO 2013 - Macroeconomics Final Exam Study Guide - Study Guide

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UF - ECO 2013 - Macroeconomics Final Exam Study Guide - Study Guide

School: University of Florida
Department: Economics
Course: Principles of Macroeconomics
Professor: David Knight
Term: Fall 2016
Tags: Econ, Macro, Macroeconomics, Economics, final, and exam
Name: Macroeconomics Final Exam Study Guide
Description: These notes cover the in-class content for the non-cumulative final exam.
Uploaded: 12/09/2017
0 5 3 26 Reviews
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background image Macroeconomics Final Study Guide 
Start of Exam 3 Content
Fiscal Policy  The use of the Federal Budget to pursue a macroeconomic objective  
U.S receipts = U.S. income
U.S. outlays = U.S. spending 
Receipts  Outlay -personal income tax
-social security tax
-corporate income tax
-indirect taxes and other receipts 
      -gas tax/passports/etc. 
-transfer payments
-spending on goods and services
       -FBI/military/salaries/public 
transport
-interest payments on the Federal 
Debt
Federal Budget Balance
Positive: 
Surplus = receipts – outlays Negative: Deficit = outlays – receipts Fiscal Policy
Expansionary Fiscal Policy – aims to increase the real GDP 
1) Increase the amount of government spending
2) Reduction in taxes 
Contractionary Fiscal Policy – aims to decrease the real GDP  1) Reduce government spending
2) Increase taxes 
Discretionary Fiscal Policy vs Automatic Stabilizers
Discretionary Fiscal Policy – requires deliberate actions by congress and 
president 
Automatic Stabilizers – changes in taxes and government spending change 
due to changes in real GDP, do not require actions by congress and president
When there is a recessionary gap… - Tax receipts fall (Expansionary FP) lower income = lower tax % taken
- Increase in “needs-tested” govt spending (expansionary FP)
When there is an expansionary gap - Tax receipts rise (contractionary FP)
- Decrease in “needs-tested” spending (contractionary FP)
background image Supply side Economic Fiscal Policy  - Economic policies aimed at effecting the economy by stimulating  production  Monetary Policy: Economic policy conducted by the central bank Operates through: - the amount of money available in the  economy 
 
        -interest rates the existence of money stimulates economic activity  Barter System: An economy based on the trading of goods and services, in the  absence of money. 3 Benefits to Money: 1) Medium of exchange  a. Easy to carry 
b. Solves the double coincidence of wants problem
2) Unit of account 
3) Store of value 
a. Stores your wealth  Double Coincidence of Wants: The problem in the barter economy that arises when one individual  does not want what the other produces.  Commodity Money Has value even if it is not money (ex. Gold) Fiat Money Money that does not have value beyond its role as money (ex. U.S.  dollar)  Definitions of Money:
What counts as money?
MI: 
perfectly liquid (spendable) 1) Currency (in circulation)
2) Checking account deposits 
3) Travelers checks
M2: almost perfectly liquid 1) Everything in M1 
2) Savings account deposits 
3) Time deposits 
4) Money market mutual fund

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School: University of Florida
Department: Economics
Course: Principles of Macroeconomics
Professor: David Knight
Term: Fall 2016
Tags: Econ, Macro, Macroeconomics, Economics, final, and exam
Name: Macroeconomics Final Exam Study Guide
Description: These notes cover the in-class content for the non-cumulative final exam.
Uploaded: 12/09/2017
5 Pages 60 Views 48 Unlocks
  • Better Grades Guarantee
  • 24/7 Homework help
  • Notes, Study Guides, Flashcards + More!
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