AP ECONOMICS: March 27 Warm-up: Economic Statistics: GDP -1.0%; Unemployment 7.7%; Inflation +0.5%. Show how the Fed will implement countercyclical.

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AP ECONOMICS: March 27 Warm-up: Economic Statistics: GDP -1.0%; Unemployment 7.7%; Inflation +0.5%. Show how the Fed will implement countercyclical policy on the money market graph and the impact on the LRAS-AD-AS graphs. Learning Target In order to understand how the government works to promote the economic goals of full employment, price stability, and economic growth, I will analyze monetary policy. I will know I have it when I can: (1) list and explain the monetary policy tools; (2) explain how changes in monetary policy impact unemployment, inflation, and real GDP; (3) draw money market graphs showing changing monetary policy; and (4) draw LRAS-AD-AS graphs illustrating how monetary policy can close recessionary and inflationary gaps. --The 3 tools of Monetary Policy (very, very important!) #1) Open Market Operations (OMO) (most frequently used) #2) Reserve Requirement Ratio (RRR) #3) Discount Rate (DR) --The Fed Funds Rate (FFR) Assignment: --study notes for money market, fiscal policy connections, and self- correcting mechanism quiz (quiz is TOMORROW) --read Module 25