2026 Exam 1

2026

Translation of your raw score into a letter grade for the exam. The curve is your friend! (Note, though, that it is your raw score that carries into the final grade. Then I apply the curve to your grand total.)

35 and above A

30–34 A-

28–29 B+

25–27 B

22–24 B-

20–21 C+

18–19 C

14–17 C-

Assigned Readings:

Remember the apprentice-level goal of critical reading: You need to be able to distinguish what the author says from its opposite. Also, major things about what the author is trying to do.

Optional Reading:

Exercises and Handouts to Help You Prepare for the Exam

  1. Make sure you have read “The Logarithmic Harmony of Percent Changes and Growth Rates"

  2. Growth Rates and Percentage Changes Powerpoint File

  3. Growth Rates and the Rule of 70 (.doc download)

  4. MV=PY, or equivalently %ΔM+%ΔV=%ΔP+%ΔY

  5. Cobb-Douglas with Constant Returns to Scale Exercise

  6. %ΔQ = elasticity %ΔP; %Δ (PQ) = %ΔP+%ΔQ

  7. Supply and Demand: Elasticities and Comparative Statics

  8. Rule of 70 Exercise

Practice Exam for Logarithms, Percent Changes and Chapter 1.

Try last year’s Exam 1 as a practice exam. Note that, in addition to the highly relevant questions on logarithms, percent changes and Chapter 1, there will be questions on things that we have not yet covered in class, because I moved the international finance diagrams earlier in the class. But many of those questions you can at least guess at given your textbook reading. And in any case, trying those questions we haven’t covered will help give you a headstart on the material for Exam 2 this year.

If you want even more practice exams, Here is the post about Exam 1 from previous years.

RESOURCES FOR LEARNING MORE ABOUT HOW TO WORK WITH THE INTERNATIONAL FINANCE DIAGRAMS (SR & LR).

Slides:

Also, study up on working with the international finance diagrams by looking at these posts:

PLUS

Look at the answers for these question in the answer sheets for exams earlier than 2024 (saving the 2024 final exam as a practice exam). (Or if you are willing to spend more time studying, you can treat the 2022 final exam as a pre-practice exam.)

(with full graphs in the answer sheet), but first do these questions before looking at the answers:

I will ask questions about aggregate demand. In the long run, the only things that could affect aggregate demand would be things that increase the natural level of output: a change in technology or a change in the amount of labor. (Because of the stock-flow distinction, the capital stock can’t change much at all in the long run. Changes in the capital stock are a very-long-run thing.)

In the short run, assume the following:

  • If the initial shock is to consumption—whether directly or because of tax changes—that direction dominates what happens to aggregate demand.

  • If the initial shock is to government purchases, that direction dominates what happens to aggregate demand.

  • As long as the initial shock is NOT to consumption or government purchases, aggregate demand moves in same direction as I + NX.