Chapter 5.

1. GDP – output included or excluded from GDP.

2. Expenditure approach - consumption, investment, government spending and net export.

3. Income approach - GDI.

4. Difference between GDP and GNP

5. Nominal GDP and Real GDP – how to calculate them.

6. GDP deflator.

Chapter 6.

1. Concepts – adult population, employed, unemployed, labor force, not in the labor force, unemployment rate, and labor force participation rate.

2. Frictional unemployment, structural unemployment, cyclical unemployment, natural rate of unemployment, and full employment.

3. Concepts – inflation, deflation, and hyperinflation.

4. Consumer Price Index – basket of consumer goods, cost of the basket, and computing CPI.

5. The problem of CPI.

6. Convert the dollar value from past to present.

7. Rate of inflation – obtained by CPI or GDP deflator.

8. Phillips curve.

Chapter 7.

1. Growth trend.

2. Business cycles – recession, trough, recovery, peak.

3. Pattern of business cycles.

4. Causes of business cycles.

5. Roaring 20’s; Great Depression; WWII and Postwar Boom; Vietnam War Boom; Stagflation of mid 70’s and early 80’s; 1991 short recession; New economy; 2001 short recession; 2002-2007; 2007-2009 financial crisis.

6. State of economy: recession, overheating, stagflation, steady growth.