FRQs and MCT Tue., through Thurs., 10-19

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Module Equilibrium in the Aggregate Demand- Aggregate Supply Model
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FRQs and MCT Tue., 10-17 through Thurs., 10-19 AP ECONOMICS: October 10 Warm-up: Explain how government economic policymakers would use the fiscal policy tools if the economy is experiencing: (1) a recessionary gap; and (2) an inflationary gap. Explain each. A.P. Economics Learning Target #1 In order to understand how public policy can impact the economy’s output, price level, and level of unemployment, I will analyze the impact of fiscal policy on AD. I will know I have it when I can, given an economic scenario: (1) determine the necessary fiscal policy (if any) to address the situation; and (2) can distinguish between discretionary and automatic fiscal policy. --See Act. 5-1 (HO from earlier): policy dilemma from stagflation --Act. 5-2: discretionary vs. automatic fiscal policy (HO) A.P. Economics Learning Target #2 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 explain how the multiplier effect will cause an initial change in spending to lead to many rounds of additional spending. --Intro to the Multiplier: Keynesian Theory (5:15) Assignment: --study for quiz over fiscal policy and macroeconomic equilibrium (quiz is Thursday) --read Module 21 FRQs and MCT Tue., 10-17 through Thurs., 10-19