1. AP ECONOMICS: October 26
Warm-up #1
--Draw a graph that shows the economy currently in long-run equilibrium. --Suppose that household wealth has been falling for several months. Given this, adjust your graph to show both the short-run change in price level and real GDP.
--Describe how the economy will adjust in the long run. Using the graph you drew earlier, show this adjustment to long-run equilibrium.
Warm-up #2 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?
--Discuss FRQ #5
Assignment Make sure you have watched the GC videos for Unit 4