Transcript Economics Mr. Haderlein

AP Economics
Mr. Haderlein
Agenda
• Semester overview
• Macroeconomics Review
– Fall Finals Returned
– Monetary policy cartoon
• Intro to Chapter 35
• HOMEWORK
– Read Chapter 35
– Questions 1, 2, 3
– Problem 1
• Semester Overview Handout
Fall Finals Returned
Monetary Policy Cartoon
Three Minute Break
Intro To Chapter 35
Short Run vs. Long Run
Types of Inflation
• Demand Pull
• Cost Push
• Page 721
Intro To Chapter 35
Phillips Curve
• Relationship between unemployment
and inflation
• Page 725 – 727
• Long Run Phillips Curve
– Page 728 (Figure 35.11)
Intro To Chapter 35
Supply Shock
• Sudden and large decrease in supply
• Causes stagnant economy AND
inflation (STAGFLATION)
• Example: Oil in the early 1970s
Intro To Chapter 35
Laffer Curve
• Relationship between tax rates and
tax revenue
• Page 731 (figure 35.12)
• Higher rates may not generate
higher tax revenue
• Robin Hood
Intro To Chapter 35
Supplyside Economics
• Economic Policy focused on supply
• Increase supply and you get GDP up
and low inflation (Economic Nervana!)
• Do the Graph (or look on page 724)
• Reaction to the 1970s
HOMEWORK
Read Chapter 35
Questions 1, 2, 3
Problem 1