Macroeconomic Policy · Prof. Barone · start here

Macro-00: You Can Do This

The course & exam, decoded~15 min read0 formulas to memorize
A garden path of stepping stones with a small rose flag planted on the ninth stone, dice by the first

In this lesson

The course, at a glance

Macroeconomic Policy spends a whole semester on one question: how does a country's economy work, and what can governments and central banks actually do about it? Everything else on the syllabus (GDP, inflation, interest rates, the models with the intimidating names) is vocabulary and tooling for that one question.

The practical shape of the course:

Lectures13 two-hour lectures + 8 two-hour exercise sessions (the exercises are where exam skill is built)
BookMankiw, Macroeconomics, a famously readable textbook. The professor follows it closely, so the slides and the book reinforce each other.
Assessment2 midterms of 16 multiple-choice questions each, or one total exam of 32. No oral, no essays, no proofs.
Topic splitMidterm 1: measuring the economy + the long run (ch. 1–8). Midterm 2: the short run, meaning booms, recessions, policy (ch. 12–16).
The honest pitch

This is a reasoning course wearing a math costume. The equations you'll meet are short, linear, and always mean something you can say in a sentence. If you can follow "when the price of coffee goes up, people buy less coffee," you can follow every model in this course. These lessons exist to prove that to you.

The exam, decoded

Every exam question is multiple choice: 4 options, exactly 1 correct. The scoring:

Play with what that means. Drag the sliders: how many questions do you answer correctly, and how many do you get wrong?

Exam score simulator

16 questions · +1 right · −⅓ wrong · blank = 0 · pass at 9

10
3

Left blank: 3

pass = 9

Exam reality

Look at what the simulator just showed you: you can leave a quarter of the exam blank, get a few more wrong, and still pass. You do not need to know everything. You need to reliably bank the patterns you know, and the patterns are learnable. The next section shows all five of them.

The scoring game

The −⅓ penalty looks scary, but it's actually a precisely calibrated rule, and knowing its math gives you a strategy:

Strategy in one line

Answer what you know. Skip what you can't touch. On everything in between, cross out the absurd option (there is almost always one) and guess. The scoring rule rewards partial knowledge; it only punishes answering with zero knowledge.

Every question is one of 5 patterns

The two official mock exams hold 32 questions between them, and every single one sorts into five recurring patterns. Below are real mock questions, each shown with the way you'd actually crack it at the desk. Click through:

Real mock question · midterm 1 "An economy produces goods A, B, and C. The table reports quantities and prices for various years. What is the annual inflation rate in 2016, computed using the GDP deflator (base year 2016)?"

What it looks like: a wall of numbers. What it is: multiply, add, divide, three times over. Multiply each quantity by its price and sum them (that's nominal GDP). Redo it with base-year prices (real GDP). Divide the two (deflator) and compare two years. Every step is supermarket arithmetic.

Macro-01 has a trainer that generates these tables endlessly and walks you through each step until they're boring.

Real mock question · midterm 2 "Okun's law: y = 3.2 − 2.1x, where y is the % change in real GDP and x is the change in unemployment. Real GDP is expected to decline by 1%. What happens to unemployment?"

What it looks like: an econometric model. What it is: one linear equation, one unknown. Put −1 where y is: −1 = 3.2 − 2.1x, so x = 4.2 / 2.1 = 2.0. Unemployment rises by 2 percentage points, and the question is done. Middle-school algebra in a suit.

Real mock question · midterm 2 "In the IS-LM model, what happens to equilibrium income if the central bank decreases the money supply and at the same time the government increases purchases?"

What it looks like: you need to have memorized a model. What it is: two curves, and you know which one each policy moves: G↑ shifts IS right (pushes income up), M↓ shifts LM left (pushes income down). Opposite pushes on income → can't tell without sizes. That's the answer: "there is no information to answer."

In Macro-05 you'll fly these curves yourself with sliders. After ten minutes of that, questions like this read like "if I push a chair left and you push it right…".

Real mock question · midterm 2 "The government increases purchases. What should the central bank do if it wants to keep the interest rate stable?"

What it looks like: policy expertise. What it is: the same curve game played backwards. G↑ pushes the interest rate up; which lever pushes it back down? More money. Answer: increase the money supply. Pattern 4 is always pattern 3 plus one extra step.

Real mock question · midterm 1 "The nominal GDP increases: (a) only if quantities increase but prices do not / (b) only if prices increase… / (c) only if quantities increase more than prices / (d) if prices increase, quantities increase, or both"

What it looks like: a trick. What it is: knowing one definition. Nominal GDP = quantities × current prices, so either one rising makes it rise: (d). Roughly a third of the exam is this pattern. Free points for anyone who did the reading once, carefully.

Why this matters

"Study macroeconomics" sounds infinite. "Get comfortable with 5 question patterns" is a finite, checkable to-do list. The rest of these lessons are organized around exactly that list.

The math you actually need

Here is the complete mathematical toolkit for this exam. Not a sample. The whole thing:

  1. Percentage change: (new − old) / old
  2. Growth-rate shortcut: growth of a product ≈ sum of growths (so real growth ≈ nominal growth − inflation)
  3. Solving one linear equation with one unknown
  4. Reading a point and a slope off a two-line graph

No derivatives. No integrals. No matrices. Prove it to yourself with four questions, right now:

If you got 3–4

You already own every mathematical tool the exam uses. From here it's only vocabulary and practice.

If you got 1–2

Still fine. These four moves get practiced dozens of times inside Macro-01 and Macro-05, always with guided steps. They become automatic fast.

How to use these lessons

  1. Read a lesson: 30 to 40 focused minutes. Play with every interactive; they're the actual teaching, not decoration.
  2. Do the exam-style quiz at the end, with the real scoring in mind (skip ≻ blind guess!).
  3. Then open the course's official exercise sheet for that chapter. You'll recognize everything on it.

Two lessons are live: Macro-01 (GDP, prices & inflation) covers the heart of midterm 1's measurement questions, and Macro-05 (IS-LM) covers the model that dominates midterm 2, reputation included. If those two feel doable, the whole course is doable, because they are the hard parts.