**PLEASE NOTE:** The final exam will test students' understanding of key macroeconomic concepts, their ability to use the complete Hall and Taylor IS-LM model to derive predictions concerning the macro effects of various government policies, and their ability to provide economic interpretations both for the HT model and for the findings derived using the HT model. See the website for additional information concerning time and place of the final exam, the need to bring an official photo ID, etc. The final exam will be comprehensive, but a stress will be placed on the HT chapters covered since the midterm: namely, HT7-HT9 and HT13. The list below focuses on topics from these chapters only. See "Topics for Midterm Review" for topics covered prior to the midterm. ----------------------------------------------------------------- HT7: THE IS-LM MODEL A. INTRODUCTION B. INVESTMENT AND THE INTEREST RATE C. NET EXPORTS AND THE INTEREST RATE D. THE IS-LM MODEL: ALGEBRAIC FORMULATION E. THE IS-LM MODEL: GRAPHICAL REPRESENTATION F. THE AGGREGATE DEMAND CURVE G. POLICY IN THE IS-LM MODEL: INTRODUCTORY COMMENTS ------------------------------------------------------------------- HT8: THE COMPLETE HALL AND TAYLOR MODEL A. A MORE COMPREHENSIVE DEFINITION OF EQUILIBRIUM B. THE TRADITIONAL PHILLIPS CURVE AND PRICE ADJUSTMENT C. OKUN'S LAW D. RELATION BETWEEN OKUN'S LAW AND THE TRADITIONAL PHILLIPS CURVE E. THE EXPECTATIONS-AUGMENTED PHILLIPS CURVE F. DETERMINANTS OF EXPECTED INFLATION G. SOME EMPIRICAL EVIDENCE H. THE COMPLETE HT MODEL IN EQUATIONAL FORM I. DYNAMIC RESPONSE TO CHANGES IN ECONOMIC CONDITIONS ------------------------------------------------------------------ HT9: MACROECONOMIC POLICY---A FIRST LOOK 9.1 SHOCKS TO THE ECONOMY 9.2 POLICY RESPONSE TO AGGREGATE DEMAND SHOCKS 9.3 POLICY RESPONSE TO PRICE ADJUSTMENT SHOCKS 9.4 MONETARY POLICY AS A RULE 9.5 POLICY POSSIBILITIES FOR REDUCING THE RATE OF INFLATION -------------------------------------------------------------- HT13: THE GOVERNMENT'S BUDGET DEFICIT AND AGGREGATE DEMAND Note: Students were asked to read HT13 as background material for the in-class exercise on the simplified presidential platforms. There are no website notes for HT13. 13.1 GOVERNMENT BUDGETS 13.2 FLUCTUATIONS IN THE DEFICIT: PURCHASES, TRANSFERS AND TAXES 13.3 THE EFFECTS OF THE GOVERNMENT DEFICIT 13.4 THE GOVERNMENT AND THE IS CURVE ----------------------------------------------------------------