Demonstrate an understanding of scarcity and the opportunity cost of resources.

Use supply and demand models to predict changes in market prices and quantities.

Interpret the meaning of changes in nominal and real economic variables.

Demonstrate an understanding of fractional reserve banking and money creation.

Predict the effects of a change in monetary policy by the Federal Reserve under various circumstances.

Demonstrate an understanding of the theory and measurement of unemployment.

Demonstrate an understanding of business cycles and alternative explanations for them.

Use a macroeconomic model to analyze GDP, unemployment, and inflation.

Demonstrate an understanding of the causes of government budget deficits.

Demonstrate an understanding of the principle of comparative advantage and apply this principle to show gains from trade.