BASIC ECONOMIC PRINCIPLES

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Economics defined

Define economics.

Economic theory and method

Define economic theories, models, and assumptions.

Economic approach

Describe the difference between positive and normative economic theory.

Economic factors

Define the factors of production.

Problem of scarcity

Describe scarcity in the context of factors of production, opportunity costs, and unlimited wants.

Problem of choice

Describe how society chooses to produce its goods and services.

Modern specialization

Define the principles of specialization and comparative advantage.

Supply and demand

Define the principles of supply and demand and the economic forces which can change supply and demand.

The economic role of government

Discuss the economic functions of government.

Describe the various types of tax systems.

List the criteria of sound taxation.

Discuss the various types of taxes collected in the United States.

MACROECONOMIC PRINCIPLES

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Macroeconomics defined

Define macroeconomics.

Macroeconomic flows

Define the input and output flows of the macroeconomy.

Macroeconomic goals

Define the basic goals of macroeconomic policy.

Measuring economic performance and national income accounting

Discuss basic accounting concepts.

Define the most widely used measures of economic growth.

Describe various price indexes.

Fluctuations in output, employment, and prices

Define aggregate demand and aggregate supply and the characteristics of each.

Explain the relationship among the level of employment, the level of output, and the level of prices.

MACROECONOMIC THEORY

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Classical economic theory

Discuss macroeconomic theory and principles pertaining to the determination of output, employment, and price levels, according to classical economists.

Keynesian economic theory

Discuss macroeconomic theory and principles pertaining to the determination of output, employment, and price levels, according to Keynesian economists.

Monetarist economic theory

Discuss macroeconomic theory and principles pertaining to the determination of output, employment, and price levels, according to monetarist economists.

Rational expectations economic theory

Discuss macroeconomic theory and principles pertaining to the determination of output, employment, and price levels, according to rational expectations economists.

Supply-side economic theory

Discuss macroeconomic theory and principles pertaining to the determination of output, employment, and price levels, according to supply-side economists.

Phillips curve

Explain the short-run and long-run versions of the Phillips curve.

MACROECONOMIC POLICY

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Fiscal policy

Define fiscal policy.

Discuss how national income is changed through fiscal policy.

Discuss the effects of fiscal policy on federal deficits and the national debt.

Discuss the effects of federal and local government expenditures on the economy.

Analyze and discuss the pros and cons of government spending.

Discuss possibilities for future changes in government spending.

Monetary policy

Define monetary policy.

Discuss the role of monetary policy in the economy.

Describe monetary targets.

MONEY AND BANKING

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Functions of money

Explain the meaning of money in economic terms.

Nation's money supply

Discuss the establishment and control of the nation's money supply.

Organization and operation of a bank

Describe sources of deposits and reserves, including reserve ratio and expansion of bank deposits.

The Federal Reserve System

Discuss the service functions and method of control of money supply by the Federal Reserve System.

Federal Deposit Insurance Corporation (F.D.I.C.)

Explain the function and purpose of the F.D.I.C.

UNITED STATES ECONOMY IN PERSPECTIVE

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Recent economic changes

Explain effects of inflation and recession.

Present economic problems of U.S. economy

Discuss effects of trade imbalances.

Communism

Explain the nature of the Soviet State and contrast with the U.S. economy.

Common problems

List economic problems common to all forms of government.

Special economic problems of the U.S.

List and describe major problems which affect the American economy today.