1. AP ECONOMICS: March 27
Warm-up: Economic Statistics: GDP -1.0%; Unemployment 7.7%; Inflation +0.5%. Show how the Fed will implement countercyclical policy on the money market graph and the impact on the LRAS-AD-AS graphs. Learning Target In order to understand how the government works to promote the economic goals of full employment, price stability, and economic growth, I will analyze monetary policy. I will know I have it when I can: (1) list and explain the monetary policy tools; (2) explain how changes in monetary policy impact unemployment, inflation, and real GDP; (3) draw money market graphs showing changing monetary policy; and (4) draw LRAS-AD-AS graphs illustrating how monetary policy can close recessionary and inflationary gaps.
--The 3 tools of Monetary Policy (very, very important!)
#1) Open Market Operations (OMO) (most frequently used)
#2) Reserve Requirement Ratio (RRR)
#3) Discount Rate (DR)
--The Fed Funds Rate (FFR)
Assignment:
--study notes for money market, fiscal policy connections, and self- correcting mechanism quiz (quiz is TOMORROW)
--read Module 25