Cost-push and Demand-pull Inflation
Study Session 4
Reading 8 – Topics in Demand and Supply Analysis
LOS a: calculate and interpret price, income, and cross-price elasticities of demand and describe factors that affect each measure;
-LOS b: compare substitution and income effects;
-LOS c: contrast normal goods with inferior goods;
-LOS d: describe the phenomenon of diminishing marginal returns;
-LOS e: determine and interpret breakeven and shutdown points of production;
-LOS f: describe how economies of scale and diseconomies of scale affect costs.
Reading 9 for – The Firm and Market Structures
-LOS a: describe characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly;
-LOS b: explain relationships between price, marginal revenue, marginal cost, economic profit, and the elasticity of demand under each market structure;
-LOS c: describe a firm’s supply function under each market structure;
-LOS d: describe and determine the optimal price and output for firms under each market structure;
-LOS e: explain factors affecting long-run equilibrium under each market structure;
-LOSf: describe pricing strategy under each market structure;
-LOS g: describe the use and limitations of concentration measures in identifying market structure;
-LOS h. identify the type of market structure within which a firm operates
Reading 10 – Aggregate Output, Prices, And Economic Growth
-LOS a. calculate and explain gross domestic product (GDP) using expenditure and income approaches;
-LOS b. compare the sum-of-value-added and value-of-inal-output methods of calculating GDP;
-LOS c. compare nominal and real GDP and calculate and interpret the GDP delator;
-LOS d. compare GDP, national income, personal income, and personal disposable income;
-LOS e. explain the fundamental relationship among saving, investment, the fiscal balance, and the trade balance;
-LOS f. explain how the aggregate demand curve is generated;
-LOS g. explain the aggregate supply curve in the short run and long run;
-LOS h. explain causes of movements along and shifts in aggregate demand and supply curves;
-LOS i. describe how luctuations in aggregate demand and aggregate supply cause short-run changes in the economy and the business cycle;
-LOS j. distinguish among the following types of macroeconomic equilibria: long-run full employment, short-run recessionary gap, short-run inlationary gap, and short-run staglation;
-LOS k. explain how a short-run macroeconomic equilibrium may occur at a level above or below full employment;
-LOS l. analyze the effect of combined changes in aggregate supply and demand on the economy;
-LOS m. describe sources, measurement, and sustainability of economic growth;
-LOS n. describe the production function approach to analyzing the sources of economic growth;
-LOS o. define and contrast input growth with growth of total factor productivity as components of economic growth;
Reading 11 – Understanding Business Cycles
-LOS a. describe the business cycle and its phases;
-LOS b. describe credit cycles;
-LOS c describe how resource use, consumer and business activity, housing sector activity, and external trade sector activity vary as an economy moves through the business cycle
-LOS d. describe theories of the business cycle
-LOS e. interpret a set of economic indicators, and describe their uses and limitations
-LOS f. describe types of unemployment, and compare measures of unemployment
-LOS g. explain inflation, hyperinlation, disinlation, and delation
-LOS h. explain the construction of indexes used to measu re inlation;
-LOS i. compare inflation measures, including their uses and limitations
-LOS j. contrast cost-push and demand-pull inlation
Reading 12 – Monetary and Fiscal Policy
-LOS a: compare monetary and fiscal policy;
-LOS b: describe functions and deinitions of money;
-LOS c: explain the money creation process;
-LOS d: describe theories of the demand for and supply of money;
-LOS e: describe the Fisher effect;
-LOS f: describe roles and objectives of central banks;
-LOS g: contrast the costs of expected and unexpected inlation;
-LOS h: describe tools used to implement monetary policy;
-LOS i: describe the monetary transmission mechanism;
-LOS j: describe qualities of effective central banks;
-LOS k: explain the relationships between monetary policy and economic growth, inlation, interest, and exchange rates;
-LOS l: contrast the use of inlation, interest rate, and exchange rate targeting by central banks;
-LOS m: determine whether a monetary policy is expansionary or contractionary;
-LOS n: describe limitations of monetary policy;
-LOS o: describe roles and objectives of fiscal policy;
-LOS p: describe tools of fiscal policy, including their advantages and disadvantages;
-LOS q: describe the arguments about whether the size of a national debt relative to GDP matters;
-LOS r: explain the implementation of fiscal policy and dificulties of implementation;
-LOS s: determine whether a fiscal policy is expansionary or contractionary;
-LOS t: explain the interaction of monetary and fiscal policy.
Reading 13 – Introduction to Geopolitics
LOSa: describe geopolitics from a cooperation versus competition perspective
LOSb: describe geopolitics and its relationship with globalization
LOSc: describe tools of geopolitics and their impact on regions and economies
LOSd: describe geopolitical risk and its impact on investment
Reading 14 – International Trade and Capital Flows
– LOS a: compare gross domestic product and gross national product
– LOS b: describe benefits and costs of international trade
– LOS c: distinguish between comparative advantage and absolute advantage
– LOS d: explain the Ricardian and Heckscher–Ohlin models of trade and the source(s) of comparative advantage in each model
– LOS e: compare types of trade and capital restrictions and their economic implications
– LOS f: explain motivations for and advantages of trading blocs, common markets, and economic unions
– LOS g: describe common objectives of capital restrictions imposed by governments
– LOS h: describe the balance of payments accounts including their components
– LOS i: explain how decisions by consumers, firms, and governments affect the balance of payments
– LOS j: describe functions and objectives of the international organizations that facilitate trade, including the World Bank, the International Monetary Fund, and the World Trade Organization
Reading 15 – Currency Exchange Rates
– LOS a: define an exchange rate and distinguish between nominal and real exchange rates and spot and forward exchange rates
– LOS b: describe functions of and participants in the foreign exchange market
– LOS c: calculate and interpret the percentage change in a currency relative to another currency
– LOS d: calculate and interpret currency cross-rates
– LOS e: calculate an outright forward quotation from forward quotations expressed on a points basis or in percentage terms
– LOS f: explain the arbitrage relationship between spot rates, forward rates, and interest rates
– LOS g: calculate and interpret a forward discount or premium
– LOS h: calculate and interpret the forward rate consistent with the spot rate and the interest rate in each currency
– LOS i: describe exchange rate regimes
– LOS j: explain the effects of exchange rates on countries’ international trade and capital flows
2024 Curriculum
Learning Module 1 – The Firm and Market Structures
Learning Module 2 – Understanding Business Cycles
LOS a: describe the business cycle and its phases
Learning Module 3 – Fiscal Policy
LOS a: compare monetary and fiscal policy
LOS c: describe tools of fiscal policy, including their advantages and disadvantages
Learning Module 4 – Monetary Policy
LOS a: describe the roles and objectives of central banks
LOS d: explain the interaction of monetary and fiscal policy
Learning Module 5 – Introduction to Geopolitics
LOS a: describe geopolitics from a cooperation versus competition perspective
LOS b: describe geopolitics and its relationship with globalization
LOS d: describe geopolitical risk
LOS e: describe tools of geopolitics and their impact on regions and economies
LOS f: describe the impact of geopolitical risk on investments
Learning Module 6 – International Trade
LOS a: describe the benefits and costs of international trade
Learning Module 7 – Capital Flows and the FX Market
LOS c: describe common objectives of capital restrictions imposed by governments
Learning Module 8 – Exchange Rate Calculations
Sergio Torrico
2021-07-23
Excelente para el FRM 2
Escribo esta revisión en español para los hispanohablantes, soy de Bolivia, y utilicé
AnalystPrep para dudas y consultas sobre mi preparación para el FRM nivel 2 (lo tomé una sola vez y aprobé muy bien), siempre tuve un soporte claro, directo y rápido, el material sale rápido cuando hay cambios en el temario de GARP, y los ejercicios y exámenes son muy útiles para practicar.
diana
2021-07-17
So helpful. I have been using the videos to prepare for the CFA Level II exam. The videos signpost the reading contents, explain the concepts and provide additional context for specific concepts.
The fun light-hearted analogies are also a welcome break to some very dry content.
I usually watch the videos before going into more in-depth reading and they are a good way to avoid being overwhelmed by the sheer volume of content when you look at the readings.
Kriti Dhawan
2021-07-16
A great curriculum provider. James sir explains the concept so well that rather than memorising it, you tend to intuitively understand and absorb them.
Thank you ! Grateful I saw this at the right time for my CFA prep.
nikhil kumar
2021-06-28
Very well explained and gives a great insight about topics in a very short time. Glad to have found Professor Forjan's lectures.
Marwan
2021-06-22
Great support throughout the course by the team, did not feel neglected
Benjamin anonymous
2021-05-10
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Daniel Glyn
2021-03-24
I have finished my FRM1 thanks to AnalystPrep. And now using AnalystPrep for my FRM2 preparation. Professor Forjan is brilliant. He gives such good explanations and analogies. And more than anything makes learning fun. A big thank you to Analystprep and Professor Forjan. 5 stars all the way!
michael walshe
2021-03-18
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