Chapter 1 : Math

Rules for Operation with Log:

In(x·y)

In(x/y)

In(x^y)

In(1+x)

What is Growth Rate?

What are the equations to calculate growth rate and annual growth rate?

With Log? Why do we use log transformation?

Manipulating Growth Rate:

z_t = x_t · y_t

z_t = x_t / y_t

z_t = cx_t

z_t = x_t / c

z_t = c / x_t

z_t = (x_t)^c

What is GDP?

What are the three approaches to measure GDP?

What are the 9 Rules on GDP?

What is Capital?

What is Net and Gross Measure?

• which is best for mesuring___?

What is Nominal and Real GDP?

What is the GDP computing goal?

What does the economy’s GDP depend on?

What are the to factors of production and what is the aggregate production function (what does the function represent)?

What is MPN, what is its function?

What is MPK?

What are the properties of the production function?

Give the definitions, the function/graph, and the table explaining the descriptions of these properties under the production function and under the MP.

What happens if you combine the last two properties?

What is the goal of a typical firm?

What is the profit maximizing function?

Explain the tuition behind the costs, the revenues, and the additional worker.

What is the hiring rule? Support with the function.

Explain the intuition behind the competition between firms, and the Aggregate Return to Capital.

What is the Cobb-Douglas production function?

What are the two common measures of the price level?

What is inflation and its function?

What are its problems with measuring?

What is a term used to describe interest rate?

What is a nominal interest rate?

What is a real interest rate? What is it as a function of the Nominal rate and inflation? What is the equation to represent it (with and without log)?
What other equation does it lead to and what does it represent?

What is unemployment?

What are the variables; L, U, N, u ?

What are the three levels of unemployment?

Unemployment is very ___?

Why would it be misleading to use unemployment rate as an indicator of labour market performance?

What is Okun’s Law?

What is Philip’s curve?

What is personal wealth?

What is national wealth?

What are these instruments for?

What kind of tool is wealth looked at?

What is money?

What are its 3 functions?

How do commercial banks make profit? What is their important role?

What is the Maturity/liquidity transformation?

What is a bond?

What is the equation for a one year bond? For a long term bond?

What are the two components of a Balance of payments account?

What does the Balance of payments equal?

What is openness in a financial market?

What is the saving-investment identity?

What is the nominal exchange rate?

What does it mean when there is an increase in exchange rate?

What are the approaches to calculate the correct level of nominal exchange rate? ( a non-arbitrage…) What are the laws of each one?