Week 8 — Midterm Review & Exam

Why this matters

A small-business owner weighing this year's sales against a loan balance and a nursing student reading a headline about the national debt face the same question: is this number per year, or as of a moment?

In plain language

This week you look back at the first seven weeks and see how they fit together. Each topic so far asks for one calculation, one curve, or one key distinction, such as real versus nominal or a level versus a rate. You also learn one new habit, the flow-vs-stock habit (a one-question check that asks whether a number is an amount per year or an amount at a moment). It sorts a yearly deficit from the debt it adds to, a year's investment from the machines an economy owns, and a year's inflation from the level prices have reached. That habit carries you into the second half of the course, where money and debt take center stage.

• Already covered: the frontier, GDP, prices and jobs, growth, AD–AS, gaps, and fiscal policy (Weeks 1 to 7).
• This week: one calculation per topic, the flow-vs-stock habit, and the midterm.
• How they connect: the habit grows from Week 7's deficit and debt.
• Where we're going next: Week 9, Money & the Banking System, puts the habit to work.

Focus

Can you run the one calculation each topic asks for, and tell a flow from a stock?

By the end of this module, you should be able to:

• [ ] rerun the key calculation from each of Weeks 1 to 7 and say it in words
• [ ] name the curve, the direction, and the new price level and output
• [ ] sort a number as a flow or a stock and name the stock it changes

To-do

Plan your week

1. Read Chapter 8 (about 35 minutes), then the lecture and slides.
2. Do the practice set (about 20 minutes) and the discussion (about 45 minutes).
3. Use the study guide and practice exam, then take the midterm.

This week's checkpoint: sort a deficit, a debt, and an inflation rate as flows or stocks.

You've got this

You have done this work already. Take it in order, and ask your instructor early if a step snags.

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