AP Macroeconomics Midterm Study Guide
A market is an institution or mechanism which brings together buyers (demanders) and sellers
(suppliers) of particular goods and services.
A market may be local, national, or international in scope.
AP Macroeconomics Fiscal Policy Review Guide
Discretionary Fiscal Policy (active):
Tax or spending changes that are enacted by choice
Example: 2007 stimulus checks and the 2001 tax cuts (income, estate, and gift)
Expansionary Fiscal Policy
Tax or spending
AP Macroeconomics Equation Review Guide
Real GDP= Nominal GDP adjusted for inflation.
Real GDP =
Price Index in Hundredths( deflator)
U.S. 2005 Real GDP=
1.1274 (based on 2000)
AP Macroeconomics Fiscal Policy Practice Problem
Fixing The Problem Using the 3 Amigos
( in spending) (Multiplier) = in GDP
1. Determine if we are in a recession or if we are having inflation
2. Determine if you should use expansionary or contractionary f