1. 2 nd Period AddieDavidZach S. Bathroom Shelby Stephens Danielle Attendanc WilliamEmilyZach P.ScottShelby Smith Paperw. Garrett Boss Rachael HeatherAmandaHannahJuhiJoshua windowwindow

2. 4 th Period HannahKristenRyanAndrewCoraAlex H. Tanner Paperw. RachaelEmmaAdamCourtney J. JordanSarah Brandon Bathroom MaciKyleAlex B.Michael E.AnmolMichael D. Danielle J.NicoleSierra Attndnc. Cody J.Gabrielle CharlesCody G.BrettHunter Will Boss CierraDylan windowwindow

3. Test Next Tuesday

4. Independent, Long FRQ Friday For a daily grade Look over AS/AD notes, and pay attention today!

5. HW due Fri Pg 292 # 18, 19 draw LF diagrams for each part of 18 and for 19

6. Money Demand Curve Shifters Changes in – Aggregate Price Level – GDP: more income means more volume of ____________, Dm ____. Mostly affects the _____________ demand for money. – Technology

7. Money Supply Shifters Monetary policy (all 3)

8. Link between interest rates and PL (price level).

9. FRQ Review/Score

10. Homework

12. 13 points total 12/13=92 11/13=85 10/13=77 9/13=69 8/13=62 7/13=54 6/13=46 5/13=38 4/13=

13. Pine Gulch

14. Partners

15. 2 nd Period New Seats AddieDavidZach S. Bathroom Shelby Stephens Danielle Attendanc WilliamEmilyZach P.ScottShelby Smith Paperw. Garrett Boss Rachael HeatherAmandaHannahJuhiJoshua windowwindow

16. New Seating Chart! HannahKristenRyanAndrewCoraAlex H. Tanner Paperw. RachaelEmmaAdamCourtney J. JordanSarah Brandon Bathroom MaciKyleAlex B.Michael E.AnmolMichael D. Danielle J.NicoleSierra Attndnc. Cody J.Gabrielle CharlesCody G.BrettHunter Will Boss CierraDylan windowwindow

17. Appointments windowwindow

18. Money Market Partner Candy Challenge Day 2

19. When the supply of money increases, the nominal interest rate… A) rises B) falls C) is unchanged D) indeterminate

20. When the demand for money increases, the nominal interest rate… A) rises B) falls C) is unchanged D) indeterminate

21. When both the demand for and supply of money decreases, the nominal interest rate… A) rises B) falls C) is unchanged D) is indeterminate

22. When the demand for money increases, the equilibrium quantity of money… A) rises B) falls C) is unchanged D) is indeterminate

23. GDP decreases. A) Dm increases B) Dm decreases C) Sm increases D) Sm decreases

24. Fed buys bonds. A) Dm increases B) Dm decreases C) Sm increases D) Sm decreases

25. Reserve rate falls. A) Dm increases B) Dm decreases C) Sm increases D) Sm decreases

26. Technology leads to widespread credit & debit card use. A) Dm increases B) Dm decreases C) Sm increases D) Sm decreases

27. Price level rises. A) Dm increases B) Dm decreases C) Sm increases D) Sm decreases

28. Open market purchases. A) Dm increases B) Dm decreases C) Sm increases D) Sm decreases

29. National income rises. A) Dm increases B) Dm decreases C) Sm increases D) Sm decreases

30. GDP falls. A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm unchanged, NIR up F) Qm unchanged, NIR down

31. Open market purchases. A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm unchanged, NIR up F) Qm unchanged, NIR down

32. Price level rises. A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm unchanged, NIR up F) Qm unchanged, NIR down

33. Technology leads to widespread credit & debit card use. A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm unchanged, NIR up F) Qm unchanged, NIR down

34. Reserve rate falls. A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm unchanged, NIR up F) Qm unchanged, NIR down

35. Reserve rate falls AND GDP decreases A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm up, NIR indeterminate F) Qm down, NIR indeterminate G) Qm indeterminate, NIR up H) Qm indeterminate, NIR down

36. Technology leads to widespread credit/debit card use AND Fed sells bonds A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm up, NIR indeterminate F) Qm down, NIR indeterminate G) Qm indeterminate, NIR up H) Qm indeterminate, NIR down

37. National income falls AND Reserve Rate Falls A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm up, NIR indeterminate F) Qm down, NIR indeterminate G) Qm indeterminate, NIR up H) Qm indeterminate, NIR down

38. Partner Quiz +10 bonus if you don’t talk to anyone from another group.

39. Fed buys $50 in bonds from a bank. The reserve requirement is 10%. 1) What is the maximum increase to the money supply (in the banking system)? 2) What is the maximum change in loans (in the banking system)? Joe deposits $200 cash into his checking account. The reserve requirement is 20%. 3) What is the maximum increase to the money supply (in the banking system)? 4) What is the maximum increase to demand deposits (in the banking system)? A bank has $1,000 in demand deposits, and $300 in reserves. Then the Fed lowers the reserve requirement from 30% to 15%. 5) How much money can this bank now lend?

40. Swap/Grade

41. FRQ Grade Partner Work From Yesterday

44. 2 nd Period AddieDavidZach S. Bathroom Shelby Stephens Danielle Attendanc WilliamEmilyZach P.ScottShelby Smith Paperw. Garrett Boss Rachael HeatherAmandaHannahJuhiJoshua windowwindow

45. HannahKristenRyanAndrewCoraAlex H. Tanner Paperw. RachaelEmmaAdamCourtney J. JordanSarah Brandon Bathroom MaciKyleAlex B.Michael E.AnmolMichael D. Danielle J.NicoleSierra Attndnc. Cody J.Gabrielle CharlesCody G.BrettHunter Will Boss CierraDylan

46. Open market operations Fed changes amount of bank reserves initially by buying/selling _______ A change in reserves has a multiplied effect on total money supply But this multiplied effect on the money supply does not affect reserves, just demand deposits and bank loans.

47. 4 th Period HannahKristenRyanAndrewCoraAlex H. Tanner Paperw. RachaelEmmaAdamCourtney J. JordanSarah Brandon Bathroom MaciKyleAlex B.Michael E.AnmolMichael D. Danielle J.NicoleSierra Attndnc. Cody J.Gabrielle CharlesCody G.BrettHunter Will Boss CierraDylan windowwindow

48. Appointments windowwindow

49. Partner FRQ

52. Money Market Clicker Quiz Independently 8 Questions

53. GDP rises. A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm unchanged, NIR up F) Qm unchanged, NIR down

54. Technology leads to widespread credit/debit card use AND Fed buys bonds A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm up, NIR indeterminate F) Qm down, NIR indeterminate G) Qm indeterminate, NIR up H) Qm indeterminate, NIR down

55. An increase in the money supply is likely to decrease a. prices b. nominal income c. money demand d. interest rates

56. The total demand for money curve will shift to the left when there is: a) an increase in nominal GDP b) an increase in the interest rate c) a decline in the interest rate d) a decline in the nominal GDP

57. If the quantity of money supplied exceeds the quantity demanded: a) the supply of money curve will shift to the left b) the demand for money curve will shift to the right c) the interest rate will rise d) the interest rate will fall

58. If the demand for money decreases and the supply of money decreases, then the new equilibrium: a. quantity of money will increase, but the change in the interest rate cannot be predicted b. quantity of money will decrease, but the change in the interest rate cannot be predicted c. interest rate will increase, but the change in the quantity of money cannot be predicted d. interest rate will decrease, but the change in the quantity of money cannot be predicted

59. When the interest rate rises, the: a. asset demand for money increases b. transactions demand for money increases c. total amount of money demanded increases d. total amount of money demanded decreases

60. A decrease in the money supply usually: a. increases the interest rate and increases aggregate demand b. increases the interest rate and decreases aggregate demand c. decreases the interest rate and increases aggregate demand d. decreases the interest rate and decreases aggregate demand

61. Independent FRQ 25 minutes

65. 2 nd Period AddieDavidZach S. Bathroom Shelby Stephens Danielle Attendanc WilliamEmilyZach P.ScottShelby Smith Paperw. Garrett Boss Rachael HeatherAmandaHannahJuhiJoshua windowwindow

66. 4 th Period HannahKristenRyanAndrewCoraAlex H. Tanner Paperw. RachaelEmmaAdamCourtney J. JordanSarah Brandon Bathroom MaciKyleAlex B.Michael E.AnmolMichael D. Danielle J.NicoleSierra Attndnc. Cody J.Gabrielle CharlesCody G.BrettHunter Will Boss CierraDylan windowwindow

67. Homework Due

68. Test: Wednesday Multiple Choice Everything in Section 5 FRQ Thursday

69. Multiplier FRQ Groups of 3 Work together, but everyone turns in a paper.

70. 2 nd Period AddieDavidZach S. Bathroom Shelby Stephens Danielle Attendanc WilliamEmilyZach P.ScottShelby Smith Paperw. Garrett Boss Rachael HeatherAmandaHannahJuhiJoshua windowwindow

71. 4 th Period HannahKristenRyanAndrewCoraAlex H. Tanner Paperw. RachaelEmmaAdamCourtney J. JordanSarah Brandon Bathroom MaciKyleAlex B.Michael E.AnmolMichael D. Danielle J.NicoleSierra Attndnc. Cody J.Gabrielle CharlesCody G.BrettHunter Will Boss CierraDylan windowwindow

72. Multiplier FRQ Groups of 3 Work together, but everyone turns in a paper.

73. FRQ Review #1 Total Points: 6 A) i) $90 ii) $1,000 iii) $900 B) $50 million C) Real wages rise (1 point) because inflation falls and real=nominal-inflation (1 point).

74. FRQ Review #2 Total Points: 6 A) Interest rate at which banks make short-term loans to other banks. B) Open market sales C) $45 million D) It will rise. E) It will rise (1) because nominal interest will rise and inflation falls and real = nominal – inflation (1).

75. FRQ Review #3 Total Points: 3 A) $5,000 X 2= $10,000 B) i).8 X $5,000 = $4,000 ii) $5,000 X 5 = $5,000

76. FRQ Review #4 Total Points: 4 A) No change (1). Both are counted as M1, so the fall in cash was offset by the rise in demand deposits (1). B) i).8 X $3,000 = $2,400 ii) $2,400 X 5 = $12,000

77. Money Market Review Why Dm downward sloping? Dm shifters Dm NIR Qm – GDP aka National Income – Price Level – Technology Sm shifters + effect on NIR, Qm? – Open Market Operations – Reserve Rate – Discount Rate What effect does a lower reserve rate have on price level? What effect does a lower reserve rate have on the real interest rate?

78. Review When the government takes no action… How does an economy get back to long-run equilibrium?

79. Pop-Quiz Take out a sheet of paper. 15 Minutes

80. Fed conducts open market purchases (from the public) in the amount of $50. The reserve requirement is 25%. 1) What is the maximum increase to the money supply (in the banking system)? 2) What is the maximum change in loans (in the banking system)? Joe deposits $100 cash into his checking account. The reserve requirement is 25%. 3) What is the maximum increase to the money supply (in the banking system)? 4) What is the maximum increase to demand deposits (in the banking system)? A bank has $2,000 in demand deposits, and $500 in reserves. Then the Fed lowers the reserve requirement from 25% to 15%. 5) How much money can this bank now lend?

81. M29 Loanable Funds Market

82. New Graph

83. Why Dlf slopes downward Rate of return

84. Why Slf slopes up People put ________ $$ in the bank when interest rates are _______.

85. Why RIR instead of NIR? Banks/businesses take __________ inflation into account when they make/take _______.

86. Dlf shifters Changes in – Perceived business opportunities – Government borrowing – ****CROWDING-OUT EFFECT***** – When government ________ more, Dlf ____, and RIR ____. – Weakens impact of government spending on economy. – When G increases, RIR ___, so interest-_______ __ & __ goes _________.

87. Ways to say gov’t borrowing:

88. Deficit spending. Government/Treasury sells/issues bonds. Increase in spending with no increase in taxes. Cut in taxes with no cut in spending.

89. Slf shifters Changes in – Private savings – Capital inflows

90. Loanable Funds Market Partner Challenge

91. 2 nd Period AddieDavidZach S. Bathroom JuhiShelby Stephens Danielle Attendanc WilliamEmilyZach P.ScottShelby Smith Paperw. Garrett Boss Rachael HeatherAmandaHannahJuhiJoshua windowwindow

92. 4 th Period HannahKristenRyanAndrewCoraAlex H. Tanner Paperw. RachaelEmmaAdamCourtney J. JordanSarah Brandon Bathroom MaciKyleAlex B.Michael E.AnmolMichael D. Danielle J.NicoleSierra Attndnc. Cody J.Gabrielle CharlesCody G.BrettHunter Will Boss CierraDylan windowwindow

93. Appointments windowwindow

94. Open market purchases. A) Dm increases B) Dm decreases C) Sm increases D) Sm decreases

95. National income rises. A) Dm increases B) Dm decreases C) Sm increases D) Sm decreases

96. An increase in the money supply usually: a. increases the interest rate and increases aggregate demand b. increases the interest rate and decreases aggregate demand c. decreases the interest rate and increases aggregate demand d. decreases the interest rate and decreases aggregate demand

97. GDP falls. A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm unchanged, NIR up F) Qm unchanged, NIR down

98. Open market purchases. A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm unchanged, NIR up F) Qm unchanged, NIR down

99. Price level rises. A) Qm up, NIR up B) Qm down, NIR down C) Qm up, NIR down D) Qm down, NIR up E) Qm unchanged, NIR up F) Qm unchanged, NIR down

100. When Slf increases, the RIR A) rises, and Qlf rises B) falls, and Qlf rises C) rises, and Qlf falls D) falls, and Qlf falls

101. When Dlf decreases, the RIR A) rises, and Qlf rises B) falls, and Qlf rises C) rises, and Qlf falls D) falls, and Qlf falls

102. People & businesses believe the rate of return on future investment projects will be higher. A) Dlf increases B) Dlf decreases C) Slf increases D) Slf decreases

103. Government budget deficit is reduced. A) Dlf increases B) Dlf decreases C) Slf increases D) Slf decreases

104. People save more; savings account balances grow. A) Dlf increases B) Dlf decreases C) Slf increases D) Slf decreases

105. International investors believe our economy will experience high growth over the next year. A) Dlf increases B) Dlf decreases C) Slf increases D) Slf decreases

106. Crowding out is best described as which of the following? A) The decrease in full-employment output caused by an increase in taxes B) The decrease in consumption or private investment spending caused by an increase in government spending C) The decrease in government spending caused by a decrease in taxes D) The increase in the amount of capital outflow caused by the increase in government spending E) The increase in the amount of capital inflow caused by the increase in government spending

107. People & businesses believe the rate of return on future investment projects will be higher. A) Qlf rises, RIR rises B) Qlf falls, RIR rises C) Qlf rises, RIR falls D) Qlf falls, RIR falls

108. Government budget deficit rises. A) Qlf rises, RIR rises B) Qlf falls, RIR rises C) Qlf rises, RIR falls D) Qlf falls, RIR falls

109. People save more; savings account balances grow. A) Qlf rises, RIR rises B) Qlf falls, RIR rises C) Qlf rises, RIR falls D) Qlf falls, RIR falls

110. International investors believe our economy will experience high growth over the next year. A) Qlf rises, RIR rises B) Qlf falls, RIR rises C) Qlf rises, RIR falls D) Qlf falls, RIR falls

111. FRQ Partner Challenge

118. Take out a sheet of paper. 1 sheet per person.

119. Money Market Review Dm shifters Dm NIR Qm – 1) GDP aka National Income (DOWN) – 2) Price Level (UP) – 3) Technology (More Debit Card Use) Sm shifters + effect on NIR, Qm? – 4) Open Market Operations (Sales) – 5) Reserve Rate (UP) – 6) Discount Rate (DOWN) 7) What effect does a higher reserve rate have on price level? 8) What effect does a higher reserve rate have on the real interest rate?

120. Fed conducts open market purchases (from the public) in the amount of $100. The reserve requirement is 25%. 1) What is the maximum increase to the money supply (in the banking system)? 2) What is the maximum change in loans (in the banking system)? Joe deposits $100 cash into his checking account. The reserve requirement is 25%. 3) What is the maximum increase to the money supply (in the banking system)? 4) What is the maximum increase to demand deposits (in the banking system)? $ $ $ $

121. Quiz Monday over formulas Copy them down

122. Fed conducts open market purchases (from the public) in the amount of $200. The reserve requirement is 10%. 1) What is the maximum increase to the money supply (in the banking system)? 2) What is the maximum change in loans (in the banking system)? Joe deposits $200 cash into his checking account. The reserve requirement is 10%. 3) What is the maximum increase to the money supply (in the banking system)? 4) What is the maximum increase to demand deposits (in the banking system)? $ $ $ $

123. Money Demand Curve Shifters Changes in – Aggregate Price Level – GDP: more income means more volume of ____________, Dm ____. Mostly affects the _____________ demand for money. – Technology

124. Money Supply Shifters Monetary policy (all 3)

125. Dlf shifters Changes in – Perceived business opportunities – Government borrowing – ****CROWDING-OUT EFFECT***** – When government ________ more, Dlf ____, and RIR ____. – Weakens impact of government spending on economy. – When G increases, RIR ___, so interest-_______ __ & __ goes _________.

126. Ways to say gov’t borrowing: Deficit spending. Government/Treasury sells/issues bonds. Increase in spending with no increase in taxes. Cut in taxes with no cut in spending.

127. Slf shifters Changes in – Private savings – Capital inflows

128. LRAS and Economic Growth

129. Changes in RIR and economic growth