The Phillips Curve is really a simple concept. It measures the relationship between inflation and unemployment, or the trade off between inflation and unemployment. The more inflation (aka the higher the prices of goods and services) the lower the unemployment; the lower the inflation (aka the lower the prices of goods and services) the higher the unemployment. Do you see that? It’s a trade-off.
You may have heard about the Federal Reserve from the news, such as when it adjusts interest rates or starts to buy bonds to increase the money supply. Federal Reserve’s monetary policy works in conjunction with the government’s fiscal policy to control the economy’s stability.
If you are having a hard time understanding these two concepts for your AP® Macroeconomics exam, then this article is for you. We will look into the concepts, what shifts aggregate demand and aggregate supply, and why these concepts are important. We will also see how you can be tested on these concepts on the AP® exam.
Economists use different terms for different measures of the money supply; specifically, they will refer to M1, M2, and M3. So, what are M1, M2, and M3, and how does it apply to the supply of money? In this crash course review, you’ll find out exactly what M1, M2, and M3 are, and you’ll learn how they apply to concepts that you’re used to, such as currency or checkable deposits.
If you’ve started studying for the AP® Microeconomics or AP® Macroeconomics exam, then you’ll need to know the essential concepts. One of the most important distinctions you’ll come across in your studies is absolute vs. comparative advantage. So what’s the difference between these two concepts? And why are they so important?
This article is a comprehensive AP® Microeconomics review defining the ten most important basic economic concepts and gives examples so that you can easily recall.
While you work on your AP® Macroeconomics review, you’ll want to pay some special attention to how you’ll deal with the AP® Macroeconomics free response questions. Along with the AP® Macroeconomics multiple choice questions, which you can find ways to score big, the AP® Macroeconomics free response is another major part of the AP® Macro exam.
So you’ve started studying for the AP® Microeconomics and AP® Macroeconomics exams, and you want to know what’s essential for your AP® Economics review. In that case, the production possibilities curve, sometimes called the production possibilities frontier, is a concept that you’ve got to know!
As you study for the AP® Microeconomics or AP® Macroeconomics exams, you’ll need to know the law of diminishing returns! In this post, you’ll learn what the law of diminishing is, why it is important, and you’ll get to work through a couple of practice questions – all of which is vital for your AP® Economics Review!