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1.What are primary phases of the business cycle?

2.How does inflation affect the economy’s level of real output?

3. Recessions seem to show up every so often and create economic hardship. One might think that macroeconomic policymakers could tame the business cycle and implement policies that would end recessions. Are recessions a necessary fact of macroeconomic life? If not, what would it take to eliminate them? If they are unavoidable, what types of business can benefit from them? How would a recession affect your firm?

4.How do changes in income affect consumption (and saving)?

5.What are factors other than income that can affect consumption?

6.What is aggregate demand (AD) and why is its downward slope the result of the real-balances effect, the interest-rate effect, and the foreign purchases effect?

7.What is aggregate supply (AS) and why does it differ in the immediate short-run, the short-run, and the long-run?

8.How can changes in real GDP equilibrium occur in the aggregate expenditures model and how do these changes relate to the multiplier?

9.How do economists integrate the public sector (government expenditures and taxes) into the aggregate expenditures model?

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