THE ECONOMIC ADJUSTMENT MECHANISM AND FISCAL POLICY
TEXTBOOK CHAPTER: 11
Review answers to Activity 27 and wrap up any AD/AS loose ends.
Define and illustrate Recessionary Gaps and Inflationary Gaps using an AD/AS graph.
1. A balanced budget occurs when government
revenue equals expenditure.
expenditure exceeds revenue.
revenue exceeds expenditure.
revenue is expenditure.
2. In Figure 12.4, if the economy is initially at point a and government purc
FEDERAL RESERVE MONETARY POLICY PRACTICE QUESTIONS
Explicit functions of the Fed include all of the following except:
a. Conducting monetary policy.
b. Conducting fiscal policy.
c. Providing banking services to the U.S. government.
d. Serving as a lend
AP ECONOMICS: SUPPLY AND DEMAND WORK SCHEDULE
ASSIGNMENT FOR DAY 1: Warning, this will take a while
1. Read The Importance of Prices in Resource Allocation
2. Read Cetaris Paribus
3. Read Demand, Prices, and Markets and complete questions.
Amount of money demanded
in billions of $
1. Refer to the above graph. If the supply of money was $250 billion, the interest rate would be:
A) 1 percent. B) 2 percent. C) 3 percent. D) 4 percen
MONETARY POLICY PART 2
FOR DAY 1: Use the monetary policy tip sheet to complete the six practice questions in your packet.
Review answers to monetary policy practice questions
Introduce the money market graph and outline its basic ideas