1. AP ECONOMICS: February 27
Warm-up: explain the difference between discretionary and automatic fiscal policy
A.P. Economics Learning Target
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: (1) explain how an initial change in spending leads to many additional rounds of spending; (2) calculate the spending and taxation/ transfer multipliers; and (3) calculate the amount that the government must change its taxation/transfers or spending to help the economy reach full employment by taking the multiplier effect into account.
--Intro to the Multiplier: Keynesian Theory (5:15)
--Basic Terminology and Formulas (1st 3 min. 42 sec.)
Marginal Propensity to Consume (MPC); Marginal Propensity to Save (MPS); MPC + MPS = 1; Spending Multiplier (1/MPS); Taxation Multiplier (always 1 less than the spending multiplier) Multiplier Effect, MPC,MPS--YouTube (2 min. 16 sec.) Calculating the Multiplier—YouTube (1 min. 49 sec.)
Multiplier and Spending Practice--YouTube (2 min. 2 sec.)
Assignment:
--read Module 21
--quiz over fiscal policy, long-run equilibrium & gaps is TOMORROW
FRQs, MCT, and Notebook Check on Wed., 3-7 through Fri., 3-9