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.