# Our exercises in economics

2 kinds of exercises:

- with calculation
- without calculation

## 1 Exercises with calculation

In this type of exercise, the focus is on calculation. The point is to calculate, by means of formulas, the value of certain notions with the values of other notions. You can obviously also integrate links and explanations or images.

Examples:

calculate the bonus that a merchant gives to his customers

calculate the equilibrium income in a Keynesian model

calculate the monthly payment for a loan (financing calculator)

calculate the decision whether to buy a share

calculate percentages

calculate revenues, expenses and savings of a household

We gave some examples above. You can edit them by importing the respective diagrams into your account or by creating diagrams yourself in your account.

You can also create different diagrams yourself in your account.

All diagrams can be used to visualize and explain the calculations to your students.

You can

- send the diagrams by email or
- publish the diagrams on a website. Your audience can even use the diagram online, as shown below. Click on a notion (eg B1), modify the value of the notion. Then press “Enter” or click anywhere in the diagram. The software recalculates all the notions involved.

## 2 Exercises without calculation

In this case, the focus is on the links and influences between the notions.

Example: What is the influence of unemployment on purchasing power?

A diagram like the one below tries to give answers to such questions.

Let’s start with a simple exercise: explain the black links in the diagram below (put the cursor on a black link and get the answer in the “Info” window at the bottom right of the screen, see the detailed explanations below).

- Growth or crisis : with key; without key

More examples:

- Bankruptcy of Banks: with key; without key
- Bankruptcy of the State: with key; without key
- Central Bank: with key; without key
- Competitiveness: with key; without key
- Exchange rate of national currency: with key; without key
- Health: with key; without key
- Imports: with key; without key

- Inflation: with key; without key
- Investments abroad: with key; without key
- Over-indebtedness: with key; without key
- Prices of State bonds on secondary market: with key; without key
- Share prices: with key; without key
- Unemployment: with key; without key
- Wages: with key; without key

In each of the interactive diagrams above you will find exercxices (with solutions for teachers and without solutions for the students).

Consult the blue and turquoise boxes (at the bottom of the diagram) containing explanations of the operation principle of a diagram and explanations regarding the use of exercises.

All diagrams and exercises have the same structure.

## Detailed explanations

Let us take the example of the diagram on Growth or crisis.

Growth or crisis; with key; without key.

Click “with key”. The diagram is opened. You see economic notions with their links represented by lines. Consider the notion “Key interest rate” located in position I4. Place the cursor on the bottom of the “Key interest rate” box. A tooltip shows the consequences of a variation of the key interest rate.

You will learn that:

**The key interest rate****has an influence in the same direction on****Interest rates on government bonds (I2)**. Read the link: If the key interest rate increases, interest rates on government bonds will increase.**The key interest rate has an influence in the opposite direction on****private investment (G5)**. Read the link: If the key interest rate increases, interest rates on government bonds declines.

You will also find a question:

Key interest rate **What kind of relationship is it? Explain!** Private consumption. Read the question: If the key interest rate increases, how does private consumption evolve?

**First type of exercise:** identify the link type of black links

In this kind of diagram, we have 2 types of links:

- “
**has an influence in the same direction on“** - “
**has an influence in the opposite direction on****“**

Some of these links have been colored in black and are called: “**What kind of relationship is it? Explain!”**

To see only the black links with the questions follow these steps:

Click “Link Types” (in the toolbar on top of the screen). In the opened window, disable the green and red link types. Only the black link type remains active. Click anywhere in the diagram to close the window.

Place the cursor on one of the black links. The line is magnified and a tooltip presents the question. The answer is shown in the “Info” window at the bottom right of the screen. Click the black link (this activates the link and the information about it remains displayed in the “Info” window). Click on the magnifying glass (at the top right of the “Info” window). The explanation of the link is displayed in large format.

Show the diagram by video projector and discuss with the students the type of each link represented in black.

**Second type of exercise:** answer the questions in the documents

In the diagram you will also find the following exercises:

- A questionnaire in WORD placed in the box H2 (click on the box and then on the document)
- A questionnaire in EXCEL placed in box H3

Here, as an example, the questionnaires on the Central Bank:

- in WORD: central-bank-exercises-in-word-with-solutions-for-the-teacher
- in EXCEL: exercises-central-bank-in-excel-with-solutions-for-the-teacher

Ask the students to complete the exercises provided. You have three options :

- Print and distribute Word or Excel files
- Send files by email to students
- Send the URL of the diagram to students . Click the top of the page URL (the text that begins with https: // ….) and copy it with Ctrl + C. Then paste it in the mail to send to students (Ctrl + V) .

#### Types of questions:

##### 1. What is the type of influence between two notions?

The question: If the notion A increases (or decreases), how does the notion B evolve?

Example 1: If the interest rate increases, how does the interest rate charged by the banks evolve?

Answer: If the key interest rate increases, the interest rate charged by the banks increases.

We shall say: Notion A has an influence in the same direction on notion B

Or: the link between A and B is positive

Example 2: If the key interest rate rises, how do loans by banks evolve?

Answer: If the key interest rate increases, the loan by banks will decrease.

We will say: notion A has an influence in the opposite direction on notion B

Or: the link between A and B is negative

##### 2. Explain the influence of notion A on notion B

##### 3. Define and explain notions

##### 4. Translate notions

##### 5. Develop one or more paths of influence

Sometimes an influence is not direct, but indirect:

The notion A has no direct influence on the notion D, but the notion A has an influence on the notion B, which has influence on the notion C, which has influence on the notion D.

For example: What is the path of influence of an increase of unemployment on the exchange rate of the national currency? There are obviously several ways.

We are grateful for any suggestion and any kind of constructive feedback. This will help us improve our site. Send an email to suggestions@linknotions.com

Teachers can easily create such exercises. You just have to register and purchase a license (See in menu: shop).

### How to create quickly a sub-world from the world of economics LinkNotions?

- Create your LinkNotions account: for free (private use and for education) or buy a license (professional use)
- In the world of economics, create a subject group containing the notions that you want to be included in the sub-world.
- In the subject group, click “Export”.
- The sub-world exists and you can use and modify it.

If you want more information, please visit the edit mode.