Upon successful completion of this course, you will be able to:

• graphically represent and interpret a short-run aggregate supply curve, and explain why it slopes upward and factors leading to its shift outward or inward;
• define aggregate demand, and identify the reasons for its negative slope;
• describe the four phases of a business cycle, including references to income and real output;
• explain the factors leading to a shift in the consumption function;
• define short-run equilibrium and long-run equilibrium, and discuss how they differ;
• graphically represent and interpret a long-run aggregate supply curve, and explain its connection to natural level of unemployment;
• describe how short-run equilibriums occur above and below the output level associated with the natural rate of unemployment;
• explain the effect of government spending, taxation, and budget deficits and surpluses on GDP;
• explain how the various kinds of lags influence the effectiveness of discretionary fiscal policy;
• explain how discretionary fiscal policy works and influences aggregate demand;
• identify the major components of US government spending and their sources;
• define the terms budget surplus, budget deficit, and balanced budget; and
• explain the difference between a budget deficit and the national debt.