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Mr. Bernstein Macro Graphs Review May 2017

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Presentation on theme: "Mr. Bernstein Macro Graphs Review May 2017"— Presentation transcript:

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


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