Download Chapters 18-20 homework - Mr. Sadow`s History Class Website

AP Macroeconomics and Microeconomics
Mr. Sadow
Chapters 18-20 Homework
Use the Chapters 18-20 presentation on our website
Pages 1-15 due by
1. Define fiscal policy.
2. Define monetary policy.
3. Define real GDP.
4. Why is it the difficult for a centrally planned economy to measure its GDP?
5. Define double counting.
6. Compare and contrast immediate goods and final goods. Give an example.
7. In what three ways do economists measure GDP? Briefly explain each.
8. Define wages.
9. Define capital income.
10. What is the difference between demand-pull and cost-push inflation?
11. What are the formulas for the real interest rate and unemployment rate?
12. Draw a graph of basic supply (S) and demand (D). Include S, D, Me, Pe, and Qe. On the same graph, show in increase of demand
(D) and label the new equilibrium P2 and Q2. Next, show a decrease in supply (S) and label it P3 and Q3.
13. Review the chapter presentation for Chapter 6 online. A little studying now will go a long way later! Can only help!! 
Pages 16-34 due by
1. Define value added.
2. Using the spending approach to measure GDP, what four components/parts are included? Briefly explain and give an example of
each.
3. Why don’t interest rates impact government purchases (G)?
4. What happens to interest rates and the amount of loanable funds in a country when it has a financial surplus? Deficit?
5. Define relative and give an example.
6. Define investment (I).
7. Define inventory investment.
8. What are the four parts/components of GDP?
9. What is the formula for determining comparative advantage?
10. Draw two graphs of binding price controls. Draw one of a price ceiling and one of a price floor. State if there is a shortage or supply
and calculate how much of each. Use any numbers you want, but keep it simple.
11. Draw three graphs: 1) graph showing aggregate supply (AS) and aggregate demand (AD) in short-run equilibrium, 2) graph showing
AS and AD in long-run equilibrium, and 3) a recession in an economy.
12. Review the chapter presentation for Chapter 7 online. A little studying now will go a long way later! Can only help!! 
Pages 35-52 due by
1. Define depreciation.
2. Compare and contrast net and gross investment.
3. Define net exports (X).
4. What are two other names for net exports?
5. How is a favorable trade balance different than an unfavorable one?
6. How does the value of a country’s money impact its imports and exports?
7. How do imports and exports impact a country’s GDP?
8. What is the definition of socially/allocatively efficient?
9. Using a potential GDP graph, draw economic fluctuations/business cycles and label the cycles (the ups and downs).
10. Create a simple table showing consumer surplus (CS) and total consumer surplus. Only create five rows. Use any numbers you
want, but keep it simple.
11. Review the chapter presentation for Chapter 8 online. A little studying now will go a long way later! Can only help!! 
Pages 53-72 due by
1. Define foreign exchange market. What is its acronym?
2. Why does FOREX exist?
3. Why is a higher dollar exchange rate for America a good thing?
4. Under what circumstances would foreigners deposit their money in American banks?
5. Define exchange rate.
6. Define flexible or floating rate.
7. When conducting foreign exchange, how is it generally done?
8. Define appreciate and depreciate.
9. What do the terms “weaker” and “stronger” refer to?
10. What occurs to a country’s exchange rate when its GDP is strong?
11. What occurs to a country’s exchange rate when its GDP is weak?
12. How does a country’s exchange rate impact its exports and imports?
13. If Canadians start to vacation more in America, what happens to each country’s currency? Draw two graphs, one showing the impact
to America’s currency and another graph for Canada.
14. If savings in a country increases, what is the impact on the country’s real interest rate? Impact on private spending?
15. If a country’s real interest rate is increasing, what will happen to imports, exports, and foreign investment in that country?
16. Define laissez faire. Define appreciate and depreciate.
17. What is the formula for finding the area of a triangle?
Pages 73-111 due by
1. Create two graphs showing the exchange rate between any two countries. Use the exchange rate of 15 to 1.
2. Using the graphs from #1, create a scenario where one of the currencies appreciates and the other depreciates. Label the graphs from
#1 “2010” and the two new graphs “2020.” Use any new exchange rate, but keep it simple, like 10 to 1 or 100 to 50.
3. How will the currency of another country appreciating impact you in the future? Depreciating?
4. How do tariffs impact the import and export countries?
5. How does a recession or depression impact two countries if only one country has the financial breakdown?
6. If the government share of GDP is 19%, how much is left over for the private sector?
7. Define crowding out and give two examples.
8. What is the formula for private savings?
9. What is the formula for national savings?
10. Define GDP deflator and list its formula. Creates two examples using the formula.
11. How are normal goods different from inferior goods?
12. Draw a firm’s demand (D) curve. Why is it completely horizontal? Draw a monopoly’s or a monopolistic competitor’s demand (D)
curve. Why does it slope down?
13. Review the chapter presentation for Chapter 9 online. A little studying now will go a long way later! Can only help!! 
Pages 112-147 due by
1. Define consumer price index. What is its acronym?
2. What is the formula for the CPI?
3. What is the drawback with using the CPI as an inflation indicator?
4. Create two scenarios that measure CPI. Use any numbers you want, but keep it simple.
5. Define natural unemployment rate. Draw a LRAS graph, a potential GDP graph, and a production possibilities curve/frontier showing
where the natural unemployment rate would be at equilibrium.
6. Define cyclical unemployment. Draw a potential GDP graph showing cyclical unemployment.
7. Define frictional unemployment. Give two examples.
8. Define structural unemployment. Give two examples.
9. Draw two graphs showing an appreciation of currency in one country and the depreciation in another country? No numbers are
needed.
10. Why is a monopoly’s or a monopolistic competitor’s demand (D) curve sloping down?
11. Why do you think frictional unemployment exists at full employment but cyclical unemployment doesn’t?
12. Draw a perfectly elastic and perfectly inelastic demand curve. Why does each take the angle that each has?
Pages 148-171 due by
1. Draw a LRAS graph, a potential GDP graph, and a production possibilities curve/frontier showing what real GDP looks like when the
unemployment rate drops below the natural unemployment rate.
2. What composes the U.S. labor force? Are you in the labor force?
3. Define discouraged workers. Do you ever want to be a discouraged worker? Why or why not?
4. Define unemployment rate. What is the unemployment rate in Deerfield Beach if 75 out of 100 citizens in the labor force are currently
working?
5. Why is just about everyone frictionally and structurally unemployed at some point in their life?
6. Create an example showing why a country’s currency might appreciate while another depreciates. draw two graphs showing the
difference in movement of the two currencies.
7. What is the most accurate way to measure labor input to production of real GDP? Why?
8. Explain creative destruction.
9. Explain seasonal employment and give two examples.
10. Define wage rate.
11. Define nominal wage.
12. Define real wage. What is the formula for the real wage? Create two calculations using any numbers you want. Perhaps think of
what you earn today and what you dream of earning in the future.
13. Define marginal product of labor and diminishing returns to labor.
14. Review the chapter presentation for Chapter 10 online. A little studying now will go a long way later! Can only help!!