The process by which fiscal policy affects aggregate demand and aggregate supply
The importance of the timing of changes in fiscal policy and the difficulties in achieving proper timing
The impact of expansionary and restrictive fiscal policies based on the basic Keynesian model, the crowding-out model, the new classical model, and supply-side model
How and why budget deficits and trade deficits tend to be linked
Automatic stabilizers and how such stabilizers work
The supply-side effects of fiscal policy
The relationship among budget deficits, inflation, and real interest rates
Monetary Policy (CFA Level I Suggested Reading)
The determinants of the demand for and supply of money
How monetary policy affects interest rates, output, and employment
How anticipations of the effects of monetary policy can influence the policy's effectiveness
The components of the equation of exchange and the implications of the equation for monetary policy
The quantity theory of money and its implications for the determination of inflation
The impact of monetary policy on major economic variables in the short run and long run, when the effects are anticipated or unanticipated
Economic Indicators (CFA Level I Suggested Reading)
Key economic factors: GDP, CPI and unemployment
Impact of economic factors on investment markets
Impact of inflation and deflation on the market
Economic indicators produced by the world's largest economies
Demand and Supply of Goods (CFA Level I Suggested Reading)
The principal-agent problem of the firm
The types of business firms
Explicit costs and implicit costs, (2) economic profit and accounting profit, and (3) the short run and the long run in production
Various types of costs, including opportunity costs, sunk costs, fixed costs, variable costs, marginal costs, and average costs
The law of diminishing marginal returns and its impact on costs
The shapes of the short-run marginal cost, average variable cost, average fixed cost, and average total cost curves
Economies and diseconomies of scale and the relationship of each to the shape of a company's long-run average total cost curve
The factors that cause cost curves to shift
Competitive Markets, Oligopolies and Monopolies (CFA Level I Suggested Reading)
Price takers and price searchers
The conditions that characterize a purely competitive or price-taker market
How and why price takers maximize profits at the quantity for which marginal cost = price = marginal revenue
The total revenue and the marginal revenue for a price taker
The decision by price takers with economic losses to either continue to operate, shut down, or go out of business
The short-run supply curve for a company and for a competitive market
The role of constant-cost, increasing-cost, and decreasing-cost industries in determining the shape of a long-run market supply curve
The impact of time on the elasticity of supply
Labour and Capital Markets (CFA Level I Suggested Reading)
The relationship between a resource's price and the quantity demanded
The influence of three factors that cause shifts in the demand curve for a resource
The marginal revenue product of a resource and how it influences the demand for that resource
The necessary conditions to achieve the cost-minimizing employment levels for two or more variable resources
The factors that influence the supply and demand of resources in the short run and long run