Macro Graph Review PPC Supply/Demand Business Cycle Investment Demand AS/AD/LRAS Money Market Increasing cost Constant cost Loanable funds market Phillips Curve AD shift/shock to SRAS shift/shock to Eco Growth Exchange rates Phillips curve Phillips curve Bond Market Macro Graph Review Fold your 11 by 17 paper in half (long way), then in half again, and then into thirds (like a letter). See the diagram on the 1 PPC Meekland makes only consumer goods and capital goods (resources are not transferable) Westland bakery makes only bread and scones (resources are transferable) 2 Supply/Demand 1. News report: tiny insects found in 80% of breakfast cereal. ( market for breakfast cereal) 2. Both General Mills and Post must stop production and clean their factories. 3 Business Cycle Draw and label the 4 phases 4 Investment Demand Show the impact of a change in the real interest rate from 4 to 6%. 5 AS/AD/LRAS Meekland is currently in a recession. 6 Money market The Federal Reserve runs an expansionary monetary policy. 7 Loanable funds market The US Treasury sells bonds in order to borrow money, show the impact. Bond market The Federal Reserve buys bonds. 8 Phillips Curve Currently the inflation is 0.5% and unemployment is 8%. (experted inflation 2%, NRU 5%) 9 AD to Phillips Curve Show demand pull inflation on both graphs. 10 SRAS to Phillips Curve Show cost push inflation on both graphs. 11 Eco Growth (two graphs) Illustrate economic growth 12 Exchange rates US kids all want a newest Japanese video game, show the impact. (US Dollar and Japanese Yen)