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Macroeconomics Theory

KNOWLEDGE EXPECTED OF: Both CFP® Professionals and FPSC Level 1® Certificants

  • Explain key economic trends, such as:
    • Globalization
    • Volatility in asset prices
    • Growing debt to GDP levels
    • Increased uncertainty in global markets
    • Increased threats to economic stability
  • Define macroeconomics.
  • Define an economic cycle.
  • Define a market cycle.
  • Identify phases of the economic cycle, such as:
    • Expansion
    • Peak
    • Contraction
    • Trough
  • Explain expected characteristics of each phase of the economic cycle.
    • Interest rates
    • Inflation
    • Gross domestic product
    • Exchange rates
    • Asset values
  • Explain the expected effect that macroeconomic variables (such as inflation, interest rates, and exchange rates) may have on the economic cycle and asset values.
  • Define recession.
  • Explain the relationship between economic cycles and investment market cycles.

Glossary of Verbs (mouse over to see definition)

  • Define

    To state exactly the meaning of

  • Identify

    To be aware of / to recognize and correctly name / to locate an appropriate resource

  • Explain

    To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it

  • Compare

    To note the similarities and differences between two or more things

  • Estimate

    To determine an approximate value for

  • Calculate

    To find the value using mathematics

  • Convert

    To change from one form or purpose to another

  • Evaluate

    To reach a conclusion or make a judgement through careful study

  • Interpret

    To give the meaning of / to construe or understand / to translate orally

Read more about the Taxonomy used in the FP-BoK