What You MUST KNOW for the Mid-Year Exams (if you don't already know them…)

Topic 1 (NIA)	:SOL - Definition of SOL: Qualitative & Quantitative Aspects - Measurement of SOL: Qualitative - using Real GDP/GNP per capita (Explain how & why); Quantitative - using indicators such as literacy rate, life expectancy, pollution index, crime rate etc (Explain how & why) - Limitations of using NY statistics (e.g. Real GDP/GNP per capita) to measure SOL: Measurement & Conceptual Problems - distinguish comparison 'over time' and 'over space' - explain using examples
Topic 2 (NID):	:Factors affecting components of AD/AE - Consumption: Income, Wealth, Tax rates, Expectation of higher future income (optimism/pessimism), Expectation of higher future prices, Interest rate etc (Apply & Explain + Evaluate relative importance of factor) - Investment: Interest rate & MEC (affected by business optimism/pessimism (i.e. Keyne's 'animal spirits'), political stability, infrastructure, quality of workforce, cost of production, tax rates & incentives, etc) (Apply & Explain + Evaluate relative importance of factor) - Government Expenditure (Topic 8): Expansionary or Contractionary Fiscal Policy (To resolve macroeconomic problems, e.g. recession, cyclical unemployment, dd-pull inflation, BOP diseqm) or Supply-side FP (to develop infrastructure or subsidise R&D or labour upgrading & retraining etc) - Net Exports (Topic 6: BOP): Competitiveness of Exports (affected by price of exports - in turn affected by Inflation rates, COP, ER,etc; and non-price factors (e.g. changing consumer tastes, better marketing/quality of goods); and Level of Imports (affected by protectionist measures such as tariffs, rising NY in domestic economy etc) :Multiplier - Explain the multiplier process (see answer given for the policy essay presentations): How does a rise in AD/AE lead to a multiple change in NY? - What affects the size of the multiplier (Tut 2 Essay 1) :Circular flow of income - How do injections and withdrawals affect the circular flow of income in a 4-sector economy? - Use of the Circular Flow diagram (and Y=AE diagram) to explain how changes in AD/AE affect NY
Topic 6 (BOP)	:Components of BOP - Current Account (BOT, Invisibles, Unilateral Transfers) & Capital Account (ST vs. LT K flows): See Tut 7 DRQ :Causes of BOP deficit - As above under Net Exports and consider other factors affecting Capital Account (both LT & ST K flows - e.g. FDI, interest rate differentials etc). :Consequences of (Large & Persistent) BOP deficit - As in your lecture notes (Explain & evaluate)
Topic 7	:Macroeconomic Objectives - Benefits (link to consequences of Macroeconomic Problems) - Conflicts between macroeconomic objectives (e.g. Consider what other macroeconomic problems can arise in the pursuit of a particular macroeconomic goal - See Tut 5 Essay 1, Tut 6 Essay 1b, Tut 7 Essay 1
Topic 8-10 (also Topic 3 to 5 - Causes of Macroecon Problems)	:Policies to solve macroeconomic problems (Topic 10 (II): Summary) - Need to be familiar with the causes of the macroeconomic problems (i.e. demand pull inflation, cost-push inflation, cyclical unemployment, structural unemployment, slow & stagnant actual & potential growth, BOP deficit) - Identify, explain & evaluate appropriate policies to solve specific macroeconomic problems - Consider effectiveness of policies in the context of various economies, e.g. Singapore.