Principles of Macroeconomics
Description of the Examination
The Principles of Macroeconomics examination covers material that is usually taught in a one-semester undergraduate course in introductory macroeconomics. This aspect of economics deals with principles of economics that apply to an economy as a whole, particularly the general price level, output and income, and interrelations among sectors of the economy. The test places particular emphasis on the determinants of aggregate demand and aggregate supply, on monetary and fiscal policy tools that can be used to achieve particular policy objectives. Within this context, candidates are expected to understand measurement concepts such as gross domestic product, consumption, investment, unemployment, inflation, inflationary gap, and recessionary gap. Candidates are also expected to demonstrate knowledge of the institutional structure of the Federal Reserve Bank and the monetary policy tools it uses to stabilize economic fluctuations and promote long-term economic growth, as well as the tools of fiscal policy and their impacts on income, employment, price level, deficits, and interest rate. Basic understanding of foreign exchange markets, balance of payments, effects of currency, and appreciation and depreciation on a country's imports and exports are also expected.
The examination contains 80 questions to be answered in 90 minutes. Some of these are pretest questions that will not be scored. Any time candidates spend on tutorials and providing personal information is in addition to the actual testing time.
Knowledge and Skills Required
Questions on the Principles of Macroeconomics examination require candidates to demonstrate one or more of the following abilities:
- Understanding of important economic terms and concepts
- Interpretation and manipulation of economic graphs
- Interpretation and evaluation of economic data
- Application of simple economic models
The subject matter of the Principles of Macroeconomics examination is drawn from the following topics. The percentages next to the main topics indicate the approximate percentages of exam questions on those topics.
| 8-12% | Basic Economic Concepts
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| 12-16% | Measurement of Economic Performance
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| 10-15% | National Income and Price Determination
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| 15-20% | Financial Sector
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| 20-30% | Inflation, Unemployment, and Stabilization Policies
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| 5-10% | Economic Growth and Productivity
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| 10-15% | Open Economy: International Trade and Finance
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Study resources
Most textbooks used in college-level introductory macroeconomics courses cover the topics in the outline given earlier, but the approaches to certain topics and the emphasis given to them may differ. To prepare for the Principles of Macroeconomics exam, it is advisable to study one or more college textbooks, which can be found in most college bookstores. When selecting a textbook, check the table of contents against the "Knowledge and Skills Required" for this test.
There are many introductory economics textbooks that vary greatly in difficulty. Most books are published in one-volume editions, which cover both microeconomics and macroeconomics; some are published in two-volume editions, with one volume covering macroeconomics and the other microeconomics. A companion study guide/workbook is available for most textbooks. The study guides typically include brief reviews, definitions of key concepts, problem sets, and multiple-choice test questions with answers. Many publishers also make available computer-assisted learning packages.
To broaden your knowledge of economic issues, you may read relevant articles published in the economics periodicals that are available in most college libraries—for example, the Economist, the Wall Street Journal and the New York Times—along with local papers, may also enhance your understanding of economic issues. In addition, many college faculty members post their course materials on their school websites, and there are a number of educational websites that contain useful resources organized by subject.
