Operation: FRQ
2014 FRQ
1.
Assume that the United States economy is currently operating below the fullemployment level of real domestic product with a balanced budget.
(a) Draw a correctly labeled graph of aggregate demand, short-run
aggregate supply, and long-run aggregate supply, and show each of the following in
the United States.
(i) Current output and price level, labeled Y1 and PL1, respectively
(ii) Full employment output, labeled as Yf
2014 FRQ
1.
Assume that the United States economy is currently operating below the fullemployment level of real domestic product with a balanced budget.
(a) Draw a correctly labeled graph of aggregate demand, short-run
aggregate supply, and long-run aggregate supply, and show each of the following in
the United States.
(i) Current output and price level, labeled Y1 and PL1, respectively
(ii) Full employment output, labeled as Yf
Instructions:
• Go through the FRQ packet and highlight, circle or
underline functional vocabulary (necessary econ
words or phrases).
▫ Focus on topics we’ve discussed during the first
quarter.
Vocab Term
Below fullemployment level of
real domestic
product
What’s it
talking about?
Synonyms
Symbols &
Acronyms
Graph
Problem
(π / U%)
Solution
(policy?)
Formulas
Vocab Term
Below fullemployment level of
real domestic
product
What’s it
talking about?
AD/AS
Gross
domestic
product
Synonyms
Symbols &
Acronyms
Recession
GDPr
Contraction
GDP =
C Ig G Xn
WRIP
Graph
AD/AS
intersect
to left of
LRAS
PPF
U%
Business
cycle
Problem
(π / U%)
Solution
(policy?)
U%
Exp.
fiscal
policy
(grow
the
economy)
Formulas
GDPr =
(nominal
GDP / CPI) x
100
CPI =
(Current
price / base
price) x 100
Instructions:
• Using the interwebs, find the real definition and
supporting info for each term to fill out your study
chart.
▫ Go to McFarling’s webpage
▫ Select “AP Econ EXAM STUDY”