1) Does the goal of full employment imply zero unemployment? If not, what types of unemployment woul

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1) Does the goal of full employment imply zero unemployment? If not, what types of unemployment would you expect to be present if the economy is at fullemployment?
2) Why is price stability an economic goal? What are the problems associated with rapid inflation? Why is economic growth important? What are the two causes?
3) What is the debate regarding discretionary vs. non-discretionary policy?
4) What is the distinction between GNP and GDP?
5) What is the distinction between stock and flow variables? How does this relate to net investment, depreciation, and changes in the capital stock.?
6) Discuss the two approaches to calculating GNP.
7) How is National Income derived from GNP?
8) What were the two main tenets of mercantilism? How was classical economics an attack on mercantilist theory?
9) Discuss the aggregate production function and the marginal productivity of labor?
10) Explain the rationale behind the MR=MC rule. How can the employment profit maximizing conditions be derived algebraically from this equation?
11) How can the demand curve for labor be derived from the profit maximizing employment conditions?
12) Discuss labor market equilibrium and output determination using graphs?
13) Show how the aggregate supply curve is constructed based on labor demand and supply as functions of the nominal wage?
14) Discuss the Quantity Theory of Money and the Cambridge Approach. How do changes in the money supply affect the economy? Describe the process.
15) Show graphically and discuss the construction of the aggregate demand curve.
16) Discuss the classical theory of interest. How ar the supply and demand curves in the supply of funds market determined?
17) Show how changes in autonomous investment or government spending would be offset in the classical model.

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