AP ECONOMICS: October 26 Warm-up #1

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Presentation transcript:

AP ECONOMICS: October 26 Warm-up #1 --Draw a graph that shows the economy currently in long-run equilibrium. --Suppose that household wealth has been falling for several months. Given this, adjust your graph to show both the short-run change in price level and real GDP. --Describe how the economy will adjust in the long run. Using the graph you drew earlier, show this adjustment to long-run equilibrium. Warm-up #2 Suppose an economy has $40 million in M1 and $90 million in M2. If people move $5 million from checkable deposits to savings accounts, what is the value of M1 and M2? Why? --Discuss FRQ #5 Assignment Make sure you have watched the GC videos for Unit 4