Unit 5
Long-Run Consequences of Stabilization Policies

Unit 5.1 Fiscal and Monetary Actions

LEARNING OBJECTIVE:
Explain (using graphs as appropriate) the effects of combined fiscal and monetary policy actions

Unit 5.2 Phillips Curve

LEARNING OBJECTIVE:
a. Define (using graphs as appropriate) the short-run Phillips curve and the long-run
​     Phillips curve
b. Explain (using graphs as appropriate) short-run and long-run equilibrium in the
     Phillips curve model
c. Explain (using graphs as appropriate) the response of unemployment and inflation
     in the short run and in the long run

Unit 5.3 Money Growth and Inflation

LEARNING OBJECTIVE:
a. Explain (using graphs as appropriate) how inflation is a monetary phenomenon.
b. Define the quantity theory of money
c. Calculate the money supply, velocity, the price level, and real output using the     
​     quantity theory of money

Unit 5.4 Governments Deficits and National Debt

LEARNING OBJECTIVE:
a. Define the government budget surplus (deficit) and national debt
b. Explain the issues involved with the burden of the national debt

Unit 5.5 Crowding Out

LEARNING OBJECTIVE:
a. Define crowding out
b. Explain (using graphs as appropriate) how fiscal policy may cause crowding out

Unit 5.6 Economic Growth

LEARNING OBJECTIVE:
a. Define measures and determinants of economic growth
b. Explain (using graphs/data as appropriate) the determinants of economic growth
c. Calculate (using graphs/data as appropriate) per capita GDP and economic growth
d. Explain (using graphs as appropriate) how the PPC is related to the long-run 
​     aggregate supply (LRAS) curve

Unit 5.7 Public Policy and Economic Growth

LEARNING OBJECTIVE:
a. Explain (using graphs as appropriate) public policies aimed at influencing long-run
    economic growth
b. Define supply-side fiscal policies