By the end of this section, you will be able to:
Define absolute advantage, comparative advantage, and opportunity costs
Explain the gains of trade created when a country specializes
By the end of this section, you will be able to:
Identify at least two advantages of intra-industry trading
Explain the relationship between economies of scale and intra-industry trade
By the end of this section, you will be able to:
Explain tarrifs as barriers to trade
Identify at least two benefits of reducing barriers to international trade
By the end of this section, you will be able to:
Show the relationship between production costs and comparative advantage
Identify situations of mutually beneficial trade
Identify trade benefits by considering opportunity costs
By the end of this section, you will be able to:
Predict shifts in the demand and supply curves of the labor market
Explain the impact of new technology on the demand and supply curves of the labor market
Explain price floors in the labor market such as minimum wage or a living wage
By the end of this section, you will be able to:
Identify the demanders and suppliers in a financial market
Explain how interest rates can affect supply and demand
Analyze the economic effects of U.S. debt in terms of domestic financial markets
Explain the role of price ceilings and usury laws in the U.S.
By the end of this section, you will be able to:
Apply demand and supply models to analyze prices and quantities
Explain the effects of price controls on the equilibrium of prices and quantities
By the end of this section, you will be able to:
Discuss the relationship between bank regulation and monetary policy
Explain bank supervision
Explain how deposit insurance and lender of last resort are two strategies to protect against bank runs
By the end of this section, you will be able to:
Explain the reason for open market operations
Evaluate reserve requirements and discount rates
Interpret and show bank activity through balance sheets
By the end of this section, you will be able to:
Contrast expansionary monetary policy and contractionary monetary policy
Explain how monetary policy impacts interest rates and aggregate demand
Evaluate Federal Reserve decisions over the last forty years
Explain the significance of quantitative easing (QE)
By the end of this section, you will be able to:
Analyze whether monetary policy decisions should be made more democratically
Calculate the velocity of money
Evaluate the central bank’s influence on inflation, unemployment, asset bubbles, and leverage cycles
Calculate the effects of monetary stimulus
By the end of this section, you will be able to:
Explain the structure and organization of the U.S. Federal Reserve
Discuss how central banks impact monetary policy, promote financial stability, and provide banking services
By the end of this section, you will be able to:
Explain the various functions of money
Contrast commodity money and fiat money
By the end of this section, you will be able to:
Utilize the money multiplier formulate to determine how banks create money
Analyze and create T-account balance sheets
Evaluate the risks and benefits of money and banks
By the end of this section, you will be able to:
Explain how banks act as intermediaries between savers and borrowers
Evaluate the relationship between banks, savings and loans, and credit unions
Analyze the causes of bankruptcy and recessions
By the end of this section, you will be able to:
Explain crowding out and its effect on physical capital investment
Explain the relationship between budget deficits and interest rates
Identify why economic growth is tied to investments in physical capital, human capital, and technology
By the end of this section, you will be able to:
Discuss twin deficits as they related to budget and trade deficit
Explain the relationship between budget deficits and exchange rates
Explain the relationship between budget deficits and inflation
Identify causes of recessions