1. Mr. Bernstein Macro Graphs Review May 2017
AP Economics
Mr. Bernstein
Macro Graphs Review
May 2017

2. AP Economics Mr. Bernstein
The Production Possibilities Curve

3. AP Economics Mr. Bernstein
Economic Growth
Concave due to “Law of increasing opportunity costs”

4. AP Economics Mr. Bernstein
Circular Flow Diagram

5. AP Economics Mr. Bernstein
Expanded Circular Flow Diagram

6. AP Economics Mr. Bernstein
Money Market
Assumes fixed MS; Y axis is Nominal Rates
Know shifters of MD

7. AP Economics Mr. Bernstein
Loanable Funds Market
Supply is upward sloping; Y axis is Real Rates
Know shifters of S, D

8. AP Economics Mr. Bernstein
Contractionary Monetary Policy and Rates
Fed sells securities, rates rise

9. AP Economics Mr. Bernstein
Contractionary Monetary Policy & the Economy
Increases in rates leads to decrease in Investment, AD

10. AP Economics Mr. Bernstein
Long-Run Macroeconomic Equilibrium
Returns to LRAS via shift in SRAS

11. AP Economics Mr. Bernstein
Short-Run and Long-Run Effects of Increase in MS
Short-run shift in AD offset by shift in SRAS
LRAS does not shift; only P increases

12. AP Economics Mr. Bernstein
Short-Run Phillips Curve
Tradeoff between inflation and unemployment

13. AP Economics Mr. Bernstein
Long-Run Phillips Curve
LRPC = Natural Rate of Unemployment

14. AP Economics Mr. Bernstein
Exchange Rates
Labeling: think “bottom/bottom”
Current or Capital Acct event will increase demand for a currency, increase the supply for the other
Capital Acct inflow increase Supply of Loanable Funds