AP MacroEconomics                 Mr. Crawford

UNIT THREE
KARL MARX and MARKET FAILURE
REVIEW NOTES

Assessment Structure:

  • 40 Multiple Choice questions (1 point each)
  • 1 Brief with Graph (10 points)

Content:

  • Module 2, pp. 10-14
  • Module 10, pp. 101-110
  • Section 14 PP. 723-724, 731, 743, 754, 761, 782
  • Module 11, pp. 112-116
  • Module 12, pp. 118-124
  • Module 13, pp. 126-132
  • Module 14, pp. 134-140
  • Module 15, pp. 142-148
  • Unit 1 Review Powerpoint

1.  KARL MARX and SOCIALISM

2.  FLAWS OF CAPITALISM

     a.  EXTERNALITIES

     b.  PUBLIC COSTS

     c.  ASYMMETRIC INFORMATION

     d.  PUBLIC GOOD

     e.  IMPERFECT COMPETITION

-MONOPOLY

     f.  INEQUITY

      g.  BUSINESS CYCLES

3.  SAYS' LAW:  Y = C

4.  MARX: INHERENT INSTABILITY BECAUSE Y = C + S

 

5.  GROSS DOMESTIC PRODUCT
     -NATIONAL INCOME ACCOUNTING

     - C + C + Ig + Xn = GDP = NY + KCA+ IBT

6.  UNEM PLOYMENT

a.   FRICTIONAL

b.  CYCLICAL

c.   STRUCTURAL

7. Okun's Law: CYCLICAL UNEMPLOYMENT x 2.5 = GDP GAP

8.  INFLATION

a.   COST-PUSH

b.  DEMAND-PULL

c. MARKET BASKETS and  CPI

9. MBty/MBby x 100 = CPI

10. NomGDP/CPIty = Real GDP
VOCABULARY

Karl marx
subsistence
 socially optimal
market failure
monopoly
INEQUITY
BUSINESS CYCLES
externalities
public good
 asymetric information
 DEPRESSION

RECESSION

EXPANSION

LABOR FORCE

UNEMPLOYMENT

AGGREGATE

GROWTH

CIRCULAR FLOW

HOUSEHOLD

 FIRM

PRODUCT MARKET

RESOURCE/FACTOR MARKET

MONEY MARKET

STOCK

BOND

NATIONAL INCOME ACCOUNTING

TRANSFER PAYMENT

DISPOSABLE INCOME

EXPORT

IMPORT

REVENUE

EXPENDITURE

COST

RENT

INTEREST

WAGES

PROFIT

SAVINGS

INTERMEDIATE GOOD

FINAL GOOD

VALUE ADDED

GDP/GNP

GROSS/NET

PER CAPITA

FRICTIONAL UNEMPLOYMENT

CYCLICAL UNEMPLOYMENT

STRUCTURAL UNEMPLOYMENT

NATURAL RATE

MINIMUM WAGE

INFLATION

DEFLATION

DISINFLATION

REAL/NOMINAL

PRICE INDEX

MARKET BASKET

DEFLATOR