Consider the following as you read:
1.Principles of Macroeconomics-Production and Growth
- Consider how to describe the four determinants of productivity.\
- Consider how to explain how higher saving leads to a higher standard of living. What might deter a policymaker from trying to raise the rate of saving?
- Consider how the rate of population growth influences the level of GDP per person.
2.Principles of Macroeconomics-Saving, Investment, and the Financial System
- Consider the role of the financial system. Be prepared to name and describe two markets that are part of the financial system in the U.S. economy.
- Consider why it's important for people who own stocks and bonds to diversify their holdings. What type of financial institution makes diversification easier?
- Consider a change in the tax code that might increase private saving. If this policy were implemented, how would it affect the market for loanable funds?
3.Principles of Macroeconomics-The Basic Tools of Finance
- Consider what benefit people get from the market for insurance. What two problems impede the insurance market from working perfectly?
- Consider what factors a stock analyst should think about in determining the value of a share of stock.
- Consider how to describe the efficient markets hypothesis with evidence.
- Consider how to explain the view of those economists who are skeptical of the efficient markets hypothesis.