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Section
1:
Microeconomics
1.1
Competitive
Markets:
Demand
and
Supply
Markets
The
Nature
of
Markets
Demand
The
Law
of
Demand
The
Demand
Curve
The
Non-Price
Determinants
of
Demand
(Factors
that
Change
Demand
or
Shift
the
Demand
Curve)
The
Non-Price
Determinants
of
Demand
(factors
that
change
demand
or
shift
the
demand
curve)
Movements
Along
and
Shifts
of
the
Demand
Curve
Supply
The
Law
of
Supply
The
Supply
Curve
The
Non-Price
Determinants
of
Supply
(factors
that
change
supply
or
shift
the
supply
curve)
Movements
Along
and
Shifts
of
the
Supply
Curve
Market
Equilibrium
Equilibrium
and
Changes
to
Equilibrium
The
Role
of
the
Price
Mechanism
Resource
Allocation
Market
Efficiency
Consumer
Surplus
Producer
Surplus
Allocative
Efficiency
1.2 Elasticity
Price
Elasticity
of
Demand
(PED)
Price
Elasticity
of
Demand
and
its
Determinants
Applications
of
Price
Elasticity
of
Demand
Cross
Price
Elasticity
of
Demand
(XED)
Cross
Price
Elasticity
of
Demand
and
its
Determinants
Applications
of
Cross
Price
Elasticity
of
Demand
Income
Elasticity
of
Demand
(YED)
Income
Elasticity
of
Demand
and
its
Determinants
Applications
of
Income
Elasticity
of
Demand
Price
Elasticity
of
Supply
(PES)
Price
Elasticity
of
Supply
and
its
Determinants
Applications
of
Price
Elasticity
of
Supply
1.3
Government
Intervention
Indirect
Taxes
Specific
(fixed
amount)
Taxes
and
Ad
Valorem
(percentage)
Taxes
and
their
Impact
on
Markets
Subsidies
Impact
on
Markets
Price
Controls
Price
Ceilings
(maximum
prices):
Rationale,
Consequences
and
Examples
Price
Floors
(minimum
prices):
Rationale,
Consequences
and
Examples
Theory
of
Knowledge:
Potential
Connections
In
what
sense
are
we
morally
obliged
to
pay
taxes?
Is
this
the
result
of
a
promise
that
we
have
made
ourselves?
When
was
this
promise
made?
(Make
a
distinction
here
between
moral
and
legal
obligations.)
The
Meaning
of
Market
Failure
Market
Failure
as
a
Failure
to
Allocate
Resources
Efficiently
Types
of
Market
Failure
The
Meaning
of
Externalities
Negative
Externalities
of
Production
and
Consumption
Positive
Externalities
of
Production
and
Consumption
Lack
of
Public
Goods
Common
Access
Resources
and
the
Threat
to
Sustainability
Theory
of
Knowledge:
Potential
Connections:
To
what
extent
is
the
obligation
to
seek
sustainable
modes
of
consumption
a
moral
one?
What
knowledge
issues
are
involved
in
assessing
the
role
of
technology
in
meeting
future
patterns
of
consumption
and
decreasing
the
negative
externalities
of
consumption
associated
with
fossil
fuels?
What
are
the
knowledge
issues
involved
in
determining
what
is
a
rational
cost
to
pay
for
halting
climate
change?
How
could
we
know
if
economically
more
developed
countries
are
morally
justified
in
interfering
in
the
development
of
economically
less
developed
countries
on
the
grounds
of
climate
change?
How
can
we
know
when
climate
change
is
sufficiently
serious
to
warrant
government
interfering
in
the
freedom
of
its
citizens
to
consume?
How
can
we
calculate
the
external
costs
of
producing
and
running
items
such
as
light
bulbs
or
motor
vehicles?
For
example,
low
energy
light
bulbs
consume
less
energy
but
they
require
more
energy
to
produce,
and
some
brands
contain
materials
that
are
harmful
to
the
environment
such
as
mercury.
Hybrid
cars
consume
less
energy
to
run
but
consume
more
energy
to
produce.
What
are
the
problems
in
knowing
whether
climate
change
is
produced
by
human
activity?
Mr.
Pyszczek
2015-2016
School
Year
Section
2:
Macroeconomics
Economic
Activity
The
Circular
Flow
of
Income
Model
Measures
of
Economic
Activity:
Gross
Domestic
Product
(GDP),
and
Gross
National
Product
(GNP)
or
Gross
National
Income
(GNI)
Aggregate
Demand
(AD)
The
AD
Curve
The
Components
of
AD
The
Determinants
of
AD
or
Causes
of
Shifts
in
the
AD
Curve
Low
Unemployment
The
Meaning
of
Unemployment
Consequences
of
Unemployment
Types
and
Causes
of
Unemployment
Explain,
Using
a
Diagram,
that
Cyclical
Unemployment
is
Caused
by
a
Fall
in
Aggregate
Demand.
Low
and
Stable
Rate
of
Inflation
The
Meaning
of
Inflation,
Disinflation
and
Deflation
Consequences
of
Inflation
Consequences
of
Deflation
Types
and
Causes
of
Inflation
Economic
Growth
The
Meaning
of
Economic
Growth
Causes
of
Economic
Growth
Consequences
of
Economic
Growth
Equity
in
the
Distribution
of
Income
The
Meaning
of
Equity
in
the
Distribution
of
Income
Indicators
of
Income
Equality/Inequality
Poverty
The
Role
of
Taxation
in
Promoting
Equity
Other
Measures
to
Promote
Equity
The
Relationship
Between
Equity
and
Efficiency
Theory
of
Knowledge:
Potential
Connections
What
criteria
can
be
used
to
order
macroeconomic
objectives
in
terms
of
priority?
Are
such
criteria
external
to
economics
(that
is,
normative)?
Is
economic
growth
always
beneficial?
What
could
be
meant
by
the
word
beneficial?
Is
there
always
a
cost
to
economic
growth?
The
notion
of
fairness
can
be
approached
from
a
number
of
perspectivesequality
of
opportunity,
maximizing
the
income
of
the
least
well-off
group,
and
absolute
equality
of
income.
Which
of
these
notions
seems
to
be
most
attractive?
Why?
Examine
what
each
of
these
perspectives
suggests
is
a
fair
distribution
of
income.
Equality
of
opportunity
implies
correcting
for
social
advantage
(for
example,
government
might
devote
more
resources
to
the
education
of
a
child
brought
up
in
less
prosperous
circumstances
than
one
brought
up
in
a
comfortable
home
whose
parents
The
Government
Budget
Sources
of
Government
Revenue
Types
of
Government
Expenditures
The
Budget
Outcome
The
Role
of
Fiscal
Policy
Fiscal
Policy
and
Short-Term
Demand
Management
The
Impact
of
Automatic
Stabilizers
Fiscal
Policy
and
its
Impact
on
Potential
Output
Evaluation
of
Fiscal
Policy
Theory
of
Knowledge:
Potential
Connections
In
one
sense
the
imposition
of
taxes
by
government
on
individuals
amounts
to
a
restriction
of
individual
freedom.
How
can
we
know
when
such
government
interference
in
individual
freedom
is
justified?
Interest
Rates
Interest
Rate
Determination
and
the
Role
of
a
Central
Bank
The
Role
of
Monetary
Policy
Monetary
Policy
and
Short-Term
Demand
Management
Monetary
Policy
and
Inflation
Targeting
Evaluation
of
Monetary
Policy
2.6
Supply-Side
Policies
The
Role
of
Supply-Side
Policies
Supply-Side
Policies
and
the
Economy
Interventionist
Supply-Side
Policies
Investment
in
Human
Capital
Investment
in
New
Technology
Investment
in
Infrastructure
Industrial
Policies
Mr.
Pyszczek
2015-2016
School
Year
Freely
Floating
Exchange
Rates
Determination
of
freely
floating
exchange
rates
Causes
of
Changes
in
the
Exchange
Rate
The
effects
of
Exchange
Rate
Changes
Mr.
Pyszczek
2015-2016
School
Year
3.3
The
Balance
of
Payments
The
Structure
of
the
Balance
of
Payments
The
meaning
of
the
balance
of
payments
The
components
of
the
balance
of
payments
accounts
The
relationships
between
the
accounts
Current
Account
Deficits
The
relationship
between
the
current
account
and
the
exchange
rate
Current
Account
Surpluses
The
relationship
between
the
current
account
and
the
exchange
rate
Implications
of
a
persistent
current
account
surplus
Forms
of
Economic
Integration
Preferential
Trade
agreements
Trading
Blocs
Monetary
Union
Theory
of
Knowledge:
Potential
Connections
What
criteria
can
be
used
to
assess
the
benefits
and
the
costs
of
increased
economic
integration?
Might
increased
economic
integration
ever
be
considered
undesirable?
Mr.
Pyszczek
2015-2016
School
Year
Measurement
Methods
Single
Indicators
Composite
Indicators
Theory
of
Knowledge:
Potential
Connections
What
criteria
could
we
use
to
determine
whether
a
particular
method
for
measuring
development
is
effective?
What
knowledge
issues
might
be
encountered
in
constructing
a
composite
indicator
to
measure
development?
4.3
The
Role
of
Domestic
Factors
Domestic
Factors
and
Economic
Development
Domestic
Factors
Trade
Problems
Facing
Many
Economically
Less
Developed
Countries
Trade
Strategies
for
Economic
Growth
and
Economic
Development
International
Trade
and
Economic
Development
Trade
problems
facing
many
economically
less
developed
countries
Trade
strategies
for
economic
growth
and
economic
development
4.5
The
Role
of
Foreign
Direct
Investment
(FDI)
Foreign
Direct
Investment
and
Multinational
Corporations
(MNCs)
The
Meaning
of
FDI
and
MNCs
Advantages
and
Disadvantages
of
FDI
for
Economically
Less
Developed
Countries
4.6
The
Roles
of
Foreign
Aid
and
Multilateral
Development
Assistance
Foreign
Aid
Classifications
and
Types
of
Aid
Evaluation
of
Foreign
Aid
Multilateral
Development
Assistance
The
Roles
of
the
International
Monetary
Fund
(IMF)
and
the
World
Bank
Foreign
Debt
Foreign
Debt
and
its
Consequences
Theory
of
Knowledge:
Potential
Connections
For
each
factor,
what
would
you
consider
to
be
sufficient
evidence
that
it
plays
a
role
in
enhancing
or
inhibiting
development?
10
Strengths
and
Weaknesses
of
Market-Oriented
Policies
Strengths
Weaknesses
Strengths
and
Weaknesses
of
Interventionist
Policies
Strengths
Weaknesses
Market
with
Government
Intervention
Theory
of
Knowledge:
Potential
Connections
What
criteria
can
economists
use
to
decide
on
the
balance
between
markets
and
intervention?
Is
development
economics
dependent
upon
external
normative
notions
such
as
what
constitutes
a
good
or
fulfilled
life?
11