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Topics in Macroeconomics

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Topics in Macroeconomics TOPICS IN MACROECONOMICS Summary of selected topics from University of Washington course ECON 301 taught Fall 2016 by graduate student Mishita Mehra (MXM) compiled by Michael C. McGoodwin (MCM). Content last updated 2/6/2017 Table of Contents INTRODUCTION AND PRELIMINARIES .................................................................................... 3 Textbook ...................................................................................................................................... 3 Course Catalog Description ........................................................................................................... 3 Resources and Links for Macroeconomics ..................................................................................... 4 Textbook Chapters and Assigned Readings .................................................................................... 4 Course Files Reviewed .................................................................................................................. 5 TOPICS of Interest ..................................................................................................................... 6 A .............................................................................................................................................................. 6 Arbitrage: Riskless and Risky ........................................................................................................ 6 B .............................................................................................................................................................. 7 Balance of Payments Accounts ...................................................................................................... 7 Bond Interest and Price .............................................................................................................. 12 Bureau of Economic Analysis (BEA) ............................................................................................ 12 Bureau of Engraving and Printing (BEP) ...................................................................................... 12 C ............................................................................................................................................................ 13 Capital and Capital Goods .......................................................................................................... 13 Central Bank .............................................................................................................................. 15 Consumer Price Index CPI........................................................................................................... 15 Current Population Survey CPS .................................................................................................. 15 D ............................................................................................................................................................ 16 Deflation .................................................................................................................................... 16 Demand for Goods, Equilibrium Goods Output, and I-S Curve..................................................... 17 Demand for Money, LM Curve, and IS-LM Model ......................................................................... 21 Double-Entry Accounting System ................................................................................................ 25 E ............................................................................................................................................................ 26 Economics: Definitions and Subdivisions .................................................................................... 26 Environmental Economics .......................................................................................................... 27 Endogenous vs. Exogenous Variable ........................................................................................... 28 Exchange Rates: Nominal and Real ............................................................................................. 28 Exchange Rates and Interest in Choosing Foreign vs. Domestic Bonds ......................................... 32 Exchange Rates, Output, and Interest Rate Interrelationships ..................................................... 33 Expectations ............................................................................................................................... 38 Exports, Imports, and Balance of Trade ....................................................................................... 39 F ............................................................................................................................................................ 42 Factors of Production .................................................................................................................. 42 Federal Funds Rate versus the Federal Discount Rate ................................................................. 42 Financial crisis of 2007–2008 (Great Recession), Precursors and Government Interventions ......... 44 Financial Markets and the LM Relation ....................................................................................... 45 Financial Wealth ......................................................................................................................... 45 Fiscal Policy ............................................................................................................................... 45 G ............................................................................................................................................................ 46 G20 or Group of Twenty .............................................................................................................. 46 Great Depression ........................................................................................................................ 46 Gross Domestic Product (GDP) .................................................................................................... 46 GDP Deflator .............................................................................................................................. 49 GDP Growth ............................................................................................................................... 50 GDP: Real vs. Nominal ................................................................................................................ 61 H ............................................................................................................................................................ 65 Page 1 of 130 !Macroeconomics_ECON301_MCM_Fall2016.docx 6 Feb 2017 Health versus Income, World 2013 .............................................................................................. 65 Hedonic Pricing .......................................................................................................................... 65 IJK ......................................................................................................................................................... 66 Inflation and Price Levels ............................................................................................................ 66 Interest Rates, Real interest versus Nominal interest ................................................................... 69 International Monetary Fund (IMF) .............................................................................................. 71 Investment ................................................................................................................................. 71 IS Curve (I-S Curve) .................................................................................................................... 71 IS-LM-PC Model .......................................................................................................................... 72 L ............................................................................................................................................................ 80 Labor Force, Employment, and Unemployment in the Labor Market ............................................ 80 Leverage and Lending ................................................................................................................. 84 M ........................................................................................................................................................... 86 Markets in Economics ................................................................................................................ 86 Mathematics and Modelling in Macroeconomics .......................................................................... 86 Medium Run .............................................................................................................................. 87 Money and Wealth ...................................................................................................................... 87 Monetary Policy .......................................................................................................................... 88 N ............................................................................................................................................................ 88 National Bureau of Economic
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