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April 4, 2014

April 4, 2014. Missed exam day(s) last week??? Unit V Quick Intro: Inflation, Unemployment, & Stabilization Policies (20-30% of AP Macro Exam) Unit Exam Date: Thursday, April 17 th Review past 2 days… Notes: Policy Effects on AS HW: Activities 5-4 and 5-5 Quiz: Fiscal Policy- Monday!.

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April 4, 2014

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  1. April 4, 2014 • Missed exam day(s) last week??? • Unit V Quick Intro: Inflation, Unemployment, & Stabilization Policies (20-30% of AP Macro Exam) • Unit Exam Date: Thursday, April 17th • Review past 2 days… • Notes: Policy Effects on AS • HW: Activities 5-4 and 5-5 • Quiz: Fiscal Policy- Monday!

  2. Policy Effects on Aggregate Supply • Fiscal & Monetary Policy affect the economy through changes in AD. • Also policies that can affect SRAS and LRAS. • Recall the SRAS determinants: • Economy wide input prices (labor, oil) • Wages • Advanced Technology • Recall the LRAS determinants: • Available resources • Higher quality resources • Advanced technology

  3. Shifts of the Short-RunAggregate Supply Curve • A supply shock is a change in costs that shifts the aggregate supply (AS) curve.

  4. Long-Run AggregateSupply and Policy Effects • If the AS curve is vertical in the long run, neither monetary policy nor fiscal policy has any effect on aggregate output. • In the long run, the multiplier effect of a change in government spending or taxes on aggregate output is zero.

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