AP ECONOMICS: October 25 Warm-up: Suppose an economy has $40 million in M1 and $90 million in M2. If people move $5 million from checkable deposits.

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AP ECONOMICS: October 25 Warm-up: 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? --complete Fed Video (3rd only) Janet Yellen --discuss Module 23 handouts (HOs from earlier) AP Economics Learning Target In order to understand how monetary policy works, I will learn the definitions of both the money supply (MS) and money demand (MD) and the factors that affect each of them. I will know I have it when, on a money market graph, given various scenarios, I can: (1) correctly shift the MS and MD curves; and (2) determine the equilibrium nominal interest rate. --transactions D vs. asset D --money market graph --MD curve shifters Assignment: --read Module 27 --watch Mr. Clifford’s videos (AC-DC Economics)