1. Operation: FRQ
FRQ EDITION

2. 2014 FRQ
Assume that the United States economy is currently operating below the full-employment level of real domestic product with a balanced budget.
(a) Draw a correctly labeled graph of aggregate demand, short-run aggregate supply, and long-run aggregate supply, and show each of the following in the United States.
(i) Current output and price level, labeled Y1 and PL1, respectively (ii) Full employment output, labeled as Yf

3. 2014 FRQ
Assume that the United States economy is currently operating below the full-employment level of real domestic product with a balanced budget.
(a) Draw a correctly labeled graph of aggregate demand, short-run aggregate supply, and long-run aggregate supply, and show each of the following in the United States.
(i) Current output and price level, labeled Y1 and PL1, respectively (ii) Full employment output, labeled as Yf

4. Instructions:
Go through the FRQ packet and highlight, circle or underline functional vocabulary (necessary econ words or phrases).
Focus on topics we’ve discussed during the first quarter.

5. What’s it talking about?
Vocab Term
What’s it talking about?
Synonyms
Symbols & Acronyms
Graph
Problem (π / U%)
Solution (policy?)
Formulas
Below full-employment level of real domestic product

6. What’s it talking about?
Vocab Term
What’s it talking about?
Synonyms
Symbols & Acronyms
Graph
Problem (π / U%)
Solution (policy?)
Formulas
Below full-employment level of real domestic product
AD/AS
Gross domestic product
Recession
Contraction
GDPr
GDP =
C Ig G Xn
W R I P U%
AD/AS intersect to left of LRAS
PPF
Business cycle U%
Exp. fiscal policy
(grow the economy)
GDPr = (nominal GDP / CPI) x 100
CPI =
(Current price / base price) x 100

7. Instructions:
Using the interwebs, find the real definition and supporting info for each term to fill out your study chart.
Go to McFarling’s webpage
Select “AP Econ EXAM STUDY”