Macro Unit 3 Summary- Aggregate Demand/Supply and Fiscal Policy

This video provides an overview of macroeconomics, focusing on aggregate demand and supply, the Phillips curve, and fiscal policy. It explains GDP components, the short and long-run aggregate supply curves, and the inverse relationship between inflation and unemployment. The video also covers fiscal policy basics, including spending and taxes, and offers tips for AP economics exam preparation.

What are the four components of GDP mentioned in the context of aggregate demand?

• Consumption, Investment, Government Spending, Net Exports

• Consumption, Imports, Government Spending, Exports

• Consumption, Investment, Savings, Exports

• Investment, Savings, Government Spending, Net Exports

What does the Phillips curve illustrate?

• The direct relationship between inflation and unemployment

• The inverse relationship between inflation and unemployment

• The relationship between GDP and inflation

• The relationship between aggregate demand and supply

Which two elements are central to fiscal policy?

• Exports and imports

• Savings and investments

• Government spending and taxes

• Interest rates and money supply

What is the purpose of the spending multiplier in fiscal policy?

• To amplify the effect of government spending on the economy

• To increase taxes

• To reduce inflation

• To decrease government spending

What is a common topic in the first AP economics exam free response question?

• Interest rates

• Monetary policy

• Aggregate demand and supply graphs

• International trade