AP MACRO ECONOMICS
UNIT 6 : MR. LIPMAN
INFLATION, UNEMPLOYMENT, AND
LONG RUN IMPLICATIONS OF FISCAL
POLICY: DEFICITS AND THE PUBIC
How does the Government Stabilizes the
The Government has
Long-Run Economic Growth
Recall: Economists measure growth using Real GDP
and perhaps more importantly Real GDP per capita.
Real GDP in Year 2 - Real GDP in Year 1
Growth in Real GDP =
Real GDP in Year 1
Real GDP per capita is f
60% are in agriculture (India/
Mostly subsistence farming
Large use of animal power
Plowing, waterwheels, work of tractor
Dependent on rainfall
Terracing in the highlands
1. If a certain combination of goods or services lies outside the production possibilities curve
of an economy, which of the following is true.
(a) Effective trade barriers have reduced foreign imports into the economy.
(b) New technology is bei