FRQs and MCT #2 are Wed. and Thur., October 18th and 19th AP ECONOMICS: October 12 Warm-up: draw the three graphs representing the three situations in which the economy can be operating --Fiscal Policy Quiz! (HO) A.P. Economics Learning Target In order to understand how equilibrium national output and price level are determined, I will analyze the impact of the multiplier effect. I will know I have it when I can: (1) explain how an initial change in spending leads to many additional rounds of spending; (2) calculate the spending and taxation multipliers; and (3) calculate the amount that the government must change its taxation or spending to help the economy reach full employment by taking the multiplier effect into account. --Basic Terminology and Formulas (1st 3 min. 42 sec.) Marginal Propensity to Consume (MPC); Marginal Propensity to Save (MPS); MPC + MPS = 1; Spending Multiplier (1/MPS); Taxation Multiplier (always 1 less than the spending multiplier) Multiplier Effect, MPC,MPS--YouTube (2 min. 16 sec.) Calculating the Multiplier—YouTube (1 min. 49 sec.) Assignment: --make sure you have read Module 21 FRQs and MCT #2 are Wed. and Thur., October 18th and 19th