Unit 3 Problem Set Rubric

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Unit 3: Aggregate Demand and Supply and Fiscal Policy

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Presentation transcript:

Unit 3 Problem Set Rubric

Question 1

Question #1 A. MPC and MPS 2 Point- Definition of the MPC 2 Point- Definition of the MPS 1 Point- Example B. MPC and MPS 2 Point- Definition of Multiplier Effect 2 Point- Definition of the Spending Multiplier 1 Point- Examples

Question #1 C. MPC and MPS 2 Point- Definition Deficit Spending 2 Point- Definition of Crowding Out 1 Point- Example

Question 2

Question #2 A. Fiscal Policy 1 Point- Definition of Discretionary 1 Point- Definition of Non-discretionary 1 Point- Definition of Expansionary 1 Point- Definition of Contractionary 1 Point- Examples

Question #2 B. Fiscal Policy 1 Point- Graph for recession 1 Point- Graph for inflationary gap 1 Point- Policies to close recessionary gap 1 Point- Policies to close an inflationary gap 1 Point- Effects of policy on graph

Question #2 C. Fiscal Policy 1 Point- Graph for recession 1 Point- Graph for inflationary gap 1 Point- Long-run effect when wages fall in a recession 1 Point- Long-run effect when wages rise in an inflation 1 Point- Effects on graph

Question #2 D. Fiscal Policy 1 Point- Graph for Phillips curve 1 Point- Recession 1 Point- Inflationary Gap 1 Point- Full employment 1 Point- Changes in AD move along the SRPC and shifts in AS shift the SRPC

Question 3

Question #3 Economic Growth 1 Point- Definition Capital Stock 1 Point- AD Increase in short-run 1 Point- AS Increase in the long-run 1 Point- LRAS increase in long-run 1 Point- Changes in consumer spending doesn’t increase capital stock so the AS doesn’t shift