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Deck the Halls with Macro Follies - YouTube

UNIT 3 QUESTION 9:  How does this funny little video criticize the belief that increasing spending (demand) causes economic growth?  What does the video credit with actually causing growth?

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Macroeconomics Unit 3: Aggregate Supply and AggregateDemand

Macroeconomics Unit 3:                     Aggregate Supply and AggregateDemand | AP Government | Scoop.it

UNIT 3:  National Income and Price Determination

DIRECTIONS:  Complete each of the following exercises and write down what you learn next to the corresponding number in your INSIGHT box.

1.  Slope of Aggregate Demand Curve

2.  Aggregate Supply and Demand Lesson

3.  Components of Aggregate Demand

4.  SRAS, LRAS, Production-Possibilities

5.  AS/AD Multiple Choice Quiz (what was your score?)

6. Productivity

7.  National Accounting

8.  National Accounting Multiple Choice Quiz (what was your score?)

 

 

1) The three reasons that the AD curve has a negative slope are: the wealth effect, the interest rate effect, and the net export effect.

2) There are three different curves to show the AS and AD. Two are the New Keynesian model, based on Keyne's ideas of government intervention during recessions and increasing demand will better the economy, while the other is the Classical Model, which is based on Say's Law that supply creates its own demand. There is no one model that is better than the other. 

3) The components of aggregate demand are C (consumption), I (investment), G (government spending) and Xn (net exports), so aggregate demand is basically GDP or National income.

4) There are six indicators of the business cycle: growth in total unemployment, growth in disposable income minus transfer payments, growth in industrial production, growth in retail manufacturing, growth in retail sales, and growth in whole sales.

5) 8/10

6) Productivity is measured by output per worker by the hour. It can shift the AS curve.

7) The flow of expenditures is measured by GDP and is on the product side of the circular flow model. The flow of earnings is on the resource side of the circular flow model. To calculate the flow of earnings one must understand that Real GDP has a relationship with the Real Gross National Product, Net National Income, Net National Product, and Personal Income.

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Macro Unit 3 Intro- Aggregate Demand, Aggregate Supply, and Fiscal Policy - YouTube

UNIT 3 QUESTION 1.  How are aggregate demand and aggregate supply different from (market) demand and (market) supply?  What is fiscal policy?

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INTRODUCTION TO MACROECONOMICS

INTRODUCTION TO MACROECONOMICS | AP Government | Scoop.it
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1) Real Gross Domestic Product- Real GDP is the market value of all final goods and services produced inside of a country in a year, but it does not include inflation.

2) GDP and what's NOT included- Re-sold items, intermediate goods and non-market transactions are not included in GDP. Re-sold items are in the GDP for the year produced, intermediate goods have already been factored in, and non-market transactions are illegal activities not supported by a real business or government.

3) Nominal vs Real- Nominal GDP includes inflation and goes based of the value of a dollar during that particular year, while the real GDP does not include inflation and goes based on a base year (in constant or chained dollars).

4) Macroeconomic Goals- A goal in macroeconomics is to have full employment (although not every one will have a job), stable prices (reasonable inflation rate), economic growth (growth rate measured by Real GDP), favorable balance of trade (exports= imports), and limiting government growth.

5)Types of unemployment- There are three types of unemployment: Frictional (temporary unemployment), structural unemployment (permanent unemployment), and cyclical unemployment (due to the downs in the business cycle).

6- Full Employment/unemployment- The labor force participation rate can decline from discouraged workers, institutionalized civilians, people that are neither considered employed or unemployed, decrease in wages, and the fact that it only includes civilian population. The production possibilities curve is unaffected by changes in unemployment and only moves from a point to another point. 

7) Unemployment interactive- Structural unemployment is when one does cannot get a job because he lacks skills necessary for a job, frictional is when one is without a job but looking for one, and cyclical unemployment is when one does not have a job due to the phases of the business cycle.

8) Inflation I, II, III, IV- Inflation is the rate at which price levels rise, demand pull inflation increases prices and quantities while cost push inflation increases costs but decreases quantity, and to find the CPI multiply the old price index times the (new CPI/old CPI).

9) Inflation and CPI- Take the difference of the two years CPI, divide by the original year's CPI and multiply by 100 to get the inflation percentage from one year to the next. 

10) Inflation people that suffer and benefit- People that benefit from inflation re borrowers on a fixed interest rate, people that increase their wages and sometimes government, but the ones that suffer are loaners, businesses, people on fixed incomes, and savers.

11) Demand pull and cost push inflation- Demand pull inflation is when consumers demand more goods/services from the economy, making prices and demand go up, while cost push inflation happens when the raw materials costs more and businesses charge more.

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EconMovies 6: Back to the Future (Nominal vs. Real, Unemployment, Inflation) - YouTube

EconMovies explain economic concepts through movies. In this episode, I use the Back to the Future Trilogy to introduce the concepts of GDP growth, Nominal G...
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11)The true growth in the economy's GDP can be a determined easier by Real GDP rather than nominal GDP. He also compared the year 1955's inflation rate of 1% to the 1985 inflation rate of 4%. He said although the 4% is high, it is better than the stagflation of the 70's and that is why the movie didn't go to the 70's. There was economic growth shown in the movie through an increase in technology and racial equality. The black worker wouldn't have been able to be mayor in the 50's, but could in the 80's and further. Also, 2015 had flying cars, hover-boards, and robots, showing the increase in technology and unemployment. 

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Episode 31: Market Failures

A brief overview of some different types of Market Failures, and examples of each, before going into a more detailed look at Externalities (Episode 32) and P...
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Market failures are when the outcome of a free market is different from the socially optimal outcome. The examples of a market failure she uses are people talking on the phone harms others who are driving and that vaccines help others surrounding from getting sick but too few actually get their shots. Another type of market failure is public goods, which are goods that are under-produced because no one wants to pay for it. Another type is adverse selection, which we have a multitude of issues concerning this type within our country today. In a perfect world every person would have health insurance, but health insurance is expensive and not every person wants to pay for it. This leads to the costs of health insurance rising for the insured, which will lead to even more uninsured individuals. Another type of market failure is moral hazard, where a service will cause more harm than planned. She uses the example of air bags, thought of to protect people, but people get less cautious, leading to more crashes

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EconMovies 4: Indiana Jones (Demand, Supply, Equilibrium, Shifts) - YouTube

EconMovies explain economic concepts through movies. In this episode, I use Indiana Jones to introduce the demand, supply, equilibrium, and shifting the curv...
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Unlike the Demand curve that is inversely related to the price, the supply is directly related. There is a point on the graph called equilibrium, where the price people will pay for a product and the demand are equal. Anything above the equilibrium is called surplus, while anything under the equilibrium is called shortage. A price drop in another product may decrease the amount in demand, unless of course it is a complimented price of the other item. This particular EconMovie didn't connect the ideas as well as the others, however the information displayed was helpful. 

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Circular Flow -- Episode 6: The Economic Lowdown Video Series - YouTube

In the sixth episode of the Economic Lowdown Video Series, economic education specialist Scott Wolla explains the circular flow model. Viewers will learn how...
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This video talks about the circular flow model and how everything in economics is connected. In exchange for reassources from households, businesses pay the people in the households. The households then use that money to pay for goods and services, making the cycle continue. The entrepreneur is the one who brings land labor and Capitol all together to create businesses and make a profit to bring back to their households. If there was ever an imbalance in the system, there would be no flow and ultimately cause economic turmoil. 

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EconPop - The Economics of Dallas Buyers Club - YouTube

UNIT 3 CHOICE:  What is the argument of the video?  What does the video mean by "crony capitalism?"  How does the video explain the effects of government regulation?

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Macro 3.11- Multiplier and Taxes Practice - YouTube

UNIT 3 QUESTION 8:  How can government TAX CUTS close a recessionary gap?  Why does the government only need to cut taxes by a FRACTION of the total gap to return the economy to macroeconomic equilibrium?

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Business Cycles Explained: Sticky Wages & Prices - YouTube

UNIT 3 QUESTION 10:  What are "sticky wages" and "sticky prices?"  What are reasons why wages and prices get "sticky" in our economy?

Sticky wages are a fixed amount of income. Prices or menu costs are sticky and stay the same price for consumers for a long period of time. Wages become sticky because unions, expectations/morale (the biggest reason for the USA). Prices become sticky because of expectations too. Additionally, prices are sticky because it would be a hassle for businesses to constantly change prices and consumers would get upset.

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Macro Unit 2.4- CPI Practice AP Macroeconomics - YouTube

Mr. Clifford's explanation of how to calculate CPI for different base years. 

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10) CPI stands for Consumer Price Index and it is the measure of inflation paid by consumers in a market basket. It is calculated by cost of CPI of a market basket of current year divided by cost of CPI of market basket of the base year and then all times 100.

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Macro 2.5- Unemployment and Natural Rate of Unemployment- AP Macro - YouTube

Mr. Clifford's explanation of frictional, structural, and cyclical unemployment and the natural rate of unemployment. Remember that "full employment" is not ...
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7)Frictional unemployment is when people are between jobs. Structural unemployment is when someone does not have a job because they do not have the skills required. Structural and Frictional unemployment are the two included in the natural rate of unemployment, which is 5%. Cyclical unemployment is unemployment based on a recession or depression due to the business cycle.

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The Crisis of Credit Visualized - HD - YouTube

The Short and Simple Story of the Credit Crisis -- The Full Version By Jonathan Jarvis. Crisisofcredit.com The goal of giving form to a complex situation lik...
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5) The causes of the 2009 Great Recession were that when house prices were increasing mortgage brokers would buy the mortgage, having the home owners pay a monthly fee, and then they would sell to a lender who would sell to an investment banker and have a chain of people and banks selling off mortgages to houses once situations got bad. Then, they stopped requiring prove of income or down payment; therefore, causing irresponsible people to purchase houses. He compares this to "playing hot potato with a time bomb". Home owners started defaulting on all their payments and mortgages costs more than the worth of their houses. Prices of houses plummet. Now, no one in the chain wants to buy the houses: they are all stuck with worthless houses and become bankrupt. As someone who personally experienced this crisis, I can attest to the fact that it is a problem. The government had so many individuals going bankrupt and getting evicted out of their houses, I lived in my house for almost a year after being evicted with no payments, then the government paid us to get out. It may have looked like a benefit, but if the whole crisis of credit and the economy had not happened, I most likely would be living in the house I grew up in today. 

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9 Schools Of Economics Explained On A One-Page Cheat Sheet

9 Schools Of Economics Explained On A One-Page Cheat Sheet | AP Government | Scoop.it
From Ha-Joon Chang. (9 schools of economics explained on a one-page cheat sheet http://t.co/mwBDdBTTwg)

Via Bruce Fellowes
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This cheat sheet shows humanity as a whole: one always thinks there is a certain way of doing things, and often disagree with others. Chang explains there is no "science" to economics, but the one type of economics that is true is neoclassical. The other eight have similar views to neoclassical, which shows they are all built off of it. This economic layout is like Christianity: all based on one thing, but has different branches. The answer that was the most common between the nine is that the most important domain of the economy is production. Without products, there would be no economy.

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Bruce Fellowes's curator insight, June 26, 2014 8:34 AM

I was lucky enough to meet Ha-Joon on monday and get a signed copy of his new book. Very funny man, as well as being a top economist. 

Bruce Fellowes's comment, August 14, 2014 4:27 PM
Very true. They are only ideas or thoughts and not necessarily solutions.
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Episode 15: Price Floors and Price Ceilings - YouTube

What happens when the government interferes with the market mechanism by artificially imposing a "better" price? "Episode 15: Price Floors and Price Ceilings...
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The price floor is the legal minimum for a service or good imposed by the government. The price ceiling is the legal maximum of a product imposed by the government also. Only the government has the right to create price minimums and maximums. Surplus and shortages can be manipulated and sometimes the government makes regulations to avoid surplus.

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EconMovies 3: Monsters Inc (Production Possibilities Curve) - YouTube

Mr. Clifford makes a production possibility curve using the capitol good, screams, and the consumer good, sushi. He shows that as the amount of scream resources decrease the sushi does too. Because the amount of capitol good decreases, the amount of consumer goods do as well due to the fact that capitol goods make more resources. Also, he uses the example of changing the capitol goods to laughter, which is ten times more effective, causing the production of consumer goods to increase.

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