By the end of this section, you will be able to:
Understand how fiscal policy and monetary policy are interconnected
Explain the three lag times that often occur when solving economic problems
Identify the legal and political challenges of responding to an economic problem
By the end of this section, you will be able to:
Differentiate among a regressive tax, a proportional tax, and a progressive tax
Identify major revenue sources for the U.S. federal budget
By the end of this section, you will be able to:
Understand the arguments for and against requiring the U.S. federal budget to be balanced
Consider the long-run and short-run effects of a federal budget deficit
By the end of this section, you will be able to:
Explain how expansionary fiscal policy can shift aggregate demand and influence the economy
Explain how contractionary fiscal policy can shift aggregate demand and influence the economy
By the end of this section, you will be able to:
Identify patterns of inflation for the United States using data from the Consumer Price Index
Identify patterns of inflation on an international level
By the end of this section, you will be able to:
Use the Consumer Price Index (CPI) to calculate U.S. inflation rates
Identify several ways the Bureau of Labor Statistics avoids biases in the Consumer Price Index (CPI)
Differentiate among the Consumer Price Index (CPI), the Producer Price Index (PPI), the International Price Index, the Employment Cost Index, and the GDP deflator.
By the end of this section, you will be able to:
Explain the relationship between indexing and inflation
Identify three ways the government can control inflation through macroeconomic policy
By the end of this section, you will be able to:
Explain how inflation can cause redistributions of purchasing power
Identify ways inflation can blur the perception of supply and demand
Explain the economic benefits and challenges of inflation
By the end of this section, you will be able to:
Calculate the annual rate of inflation
Explain and use index numbers and base years when simplifying the total quantity spent over a year for products
Calculate inflation rates using index numbers
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.