Economic Model Of Supply And Demand

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ECNM 612

I. DEFINITIONS. Define any 10 terms. Give examples where pertinent.

Macro Economics Opportunity cost Model / Theory Micro Economics Real capital Fiscal Deficit GDP Debt Net exports Consumer Price Index Producer Price Index Consumption spending Investment Inflation Production Possibility Curve

II. ESSAY QUESTIONS. Answer any TWO questions. Answer all parts of each question that you choose.

1. a) What is Supply ? What is Demand ? b) Develop a model of a market, utilizing supply and demand. What are the dominant variables or parameters ? c) What is a shortage ? What is a surplus ? DEMONSTRATE d) Via the model, explain the dynamic changes that can happen in a market. Give examples. e) Relate the Micro economic model of supply and demand to the Macro economic model of Aggregate Demand and Aggregate Supply

3. a) What is Aggregate Demand ? b) Develop a model showing the importance and effects of Aggregate Demand on the overall economy. c) What is Fiscal Policy ? What are the goals of Fiscal Policy ? What are the tools of Fiscal Policy ? d) Explain the how expansionary Fiscal Policy would be implemented. e) What is the presumed result of the use of Fiscal Policy ? f) What are the criticisms regarding the use of Fiscal
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