1. TOMORROW: FRQ #4 over Key Concepts HO & Multipliers Monday: MCT #3
AP ECONOMICS: October 18
Warm-up If the government decides to spend $500B more on infrastructure and simultaneously raises taxes by $500B, what is the impact on the federal budget? The national debt? The economy? What is the cumulative multiplier in this scenario? Assume the MPC=.75.
--discuss Worksheet 21.2 (HO from earlier)
Reminders --the spending multiplier applies to ALL changes in spending (not just G, but C, Ig, and Xn as well) --when output (Real GDP) changes so does income (“Y” represents national income on the x-axis in the AD-AS model)
--fiscal policy is DEMAND-SIDE POLICY (don’t shift the AS or LRAS curves!) --work on MCT #3 Practice Questions (HO) Assignment
--Study Key Concepts HO (HO from Monday); Watch GC videos --MCT #3 Practice Questions (HO)
TOMORROW: FRQ #4 over Key Concepts HO & Multipliers Monday: MCT #3