Macro Semester Graph Practice Exercise
What is this
graph called?
How is the
Y-Axis
labeled?
How is the
X-Axis
labeled?
If there is a point inside the
curve, it shows an economy that
is __________________.
It there is a point on the curve, it
shows an economy that is
________________________.
This curve comparison is used to
compare two country’s
__________ ____________.
(The very
basic
version)
(Dollars)
(Euros….)
The up-sloping line is the
___________.
The down-sloping line is the
___________.
If the EP is increased in this
market (first), it will create a
________ and help the
______________.
If real interest rates go up in the
USA, the ____________ for the
dollar would ____________ and
the dollar would ____________
and US exports would________.
If Europe goes into a major
expansion and all Europeans
have more wealth, the
___________ of the Euro would
__________ and the Euro would
___________.
If the Fed causes nominal
interest rates to fall, the overall
_____________ would
_________________.
(MM) =
(MM) =
(LF)
The vertical line is the
________.
This economy is
(The end
_____________.
point of the Which policy would target
vertical
changing the C and G of the
line is the
down-sloping line?
________) ___________.
Which policy would target
changing the Ig of the downsloping line?
________________.
If major input costs of energy
increased, the up-sloping line
will
_______________ and EP will
________and EQ will
__________. This is known as
_____________.
The vertical line is controlled by
the ___________. When they
want to help get out of a
recession, they would move the
vertical line ____________ by
________ _________.
If Congress tries to help a
recession end, they would cause
the ________ to move _______
and the interest rates would
____________.
During a recession, the public
will ___________ more and the
___________ line will move
___________. This will cause
the domestic economy to be able
to _______ more for investment.
(LF)
(PC) =
(Agg.)
If Congress runs deficits, the
public is buying up bonds. This
means that private savings will
____________ and the
_________ _______ will rise.
The vertical line is the _______.
If the down-sloping line has
moved to the right, this will
probably be due to a time of
_______________.
(The end
point of the
vertical
To reverse the trend, a society
line is the
must improve _____________.
________)
This series of changes illustrates
the concept of ___________
_______. It is caused by a
_______________ policy
enacted by ______________.
Macro Semester Graph Practice Exercise: Key
What is this
graph called?
How is the
Y-Axis labeled?
How is the XAxis labeled?
Production Capital
Possibilities Goods
Curve
Consumer
Goods
Compar.
Advantage
(any type)
(any type)
(The very
basic
version)
Supply and
Demand
Price
Quantity
(Dollars)
Dollar
Market
Euros
Dollars
Q dollars
(Euros….)
Euro
Market
Dollars
Euros
Q euros
Investment
Demand
Interest rates
Q Ig
dollars
If there is a point inside the
curve, it shows an economy that
is inefficient
.
It there is a point on the curve, it
shows an economy that is
efficient
.
This curve comparison is used to
compare two country’s
comparative advantage.
The up-sloping line is the
Supply.
The down-sloping line is the
Demand.
If the EP is increased in this
market (first), it will create a
Surplus and help the
Suppliers
.
If real interest rates go up in the
USA, the demand for the dollar
would increase and the dollar
would appreciate and US
exports would decrease.
If Europe goes into a major
expansion and all Europeans
have more wealth, the supply
of the Euro would increase and
the Euro would depreciate.
If the Fed causes nominal
interest rates to fall, the overall
gross investment would
increase.
Aggregate
Model
Price Level
Aggregate
Model
Price Level
(MM) =
Money
Market
(MM) =
Money
Market
(LF) =
Loanable
Funds
(nominal)
interest rates
(nominal)
interest rates
(real)
interest rates
The vertical line is the
rGDP
LRAS.
This economy is
(The end
in recession.
point of the Which policy would target
vertical
changing the C and G of the
line is the
down-sloping line? Fiscal
FE or Yf)
Expansionary.
Which policy would target
changing the Ig of the downsloping line? Monetary
Expansionary.
If major input costs of energy
rGDP
increased, the up-sloping line
will
decrease and EP will increase
and EQ will decrease. This is
known as Stagflation.
Q money
Q money
Q loanable
funds
The vertical line is controlled by
the Fed. When they want to
help get out of a recession, they
would move the vertical line
outward by buying bonds.
If Congress tries to help a
recession end, they would cause
the demand to move outward
and the interest rates would
increase.
During a recession, the public
will save more and the savings
line will move outward. This
will cause the domestic
economy to be able to borrow
more for investment.
(LF) =
Loanable
Funds
(real)
interest rates
Q loanable
funds
(PC) =
Phillips
Curve
inflation
unemploy.
(Agg.)
Aggregate
Model
PL
If Congress runs deficits, the
public is buying up bonds. This
means that private savings will
decrease and the interest
rates will rise.
The vertical line is the LRPC.
If the down-sloping line has
moved to the right, this will
probably be due to a time of
Stagflation.
(The end
point of the
vertical
To reverse the trend, a society
line is the
must improve productivity.
NRU)
This series of changes illustrates
rGDP
the concept of Crowding Out. It
is caused by a Fiscal policy
enacted by Congress.