FRQ EDITION Operation FRQ 2014 FRQ 1 Assume

FRQ EDITION 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 Y 1 and PL 1, 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 Y 1 and PL 1, 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 U% Graph AD/AS intersect to left of LRAS PPF 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 Mc. Farling’s webpage ▫ Select “AP Econ EXAM STUDY”