We're behind schedule in my class right now and we barely have time to cover anything past Unit 4. Your videos have been an amazing help for me. Thank you so much!
Thank you so much. My teacher did not teach us some concepts like the interact between MP and FP. Your summaries are so helpful and they show me what unit I need to go back to review. 😊Praying I get a 4.
I'm a little bit confused of the part where expansionary MP and FP both lead to the increase in AD. Because fiscal policy will increase the demand of loanable funds which increases the interest rate, thus decreasing AD. But fiscal policy prompts consumer spending and government purchase, which means it will also increase the AD. I feel like we cannot determine whether fiscal policy can affect the AD or not at this point.
The expansionary impact of a decrease in taxes and/or increase in government spending will be less than the crowding out effect (decrease in Ig). The rightward AD shift of expansionary fiscal policy is the primary effect and the leftward AD shift from crowding out is the secondary effect. Focus on primary effects unless otherwise specified. I hope that helps!
thank you! quick question- for the SRPC shifting due to shift in SRAS, would that mean that unemployment rate doesn’t change, just an increase in inflation rate? hopefully this question makes sense, thank you!
Just like and SRAS shift causes a change in the PL and real output, an SRPC shift will cause a change in unemployment (the opposite direction of the change in real output) and cause a change in the inflation rate (the same direction as the change in the price level). I hope that helps!
So... This is a tricky one... As we have conflicting ideas in the Macro models. If a question asks about the long run impact of an increase in the money supply, The answer will be no change in real output but a higher price level. The reason being that the aggregate demand rightward shift is counteracted by a long run leftward shift of the short run area supply curve caused by increased inflation expectations. In this analysis the increased potential GDP from the increased investment is ignored. But, if the interest rate decreases, there will be an increase in gross investment. That gross investment will increase economic growth which we see as a right word shift of the long run aggregate supply curve. But my advice is to only consider the long run aggregate supply curve shift if the question asks about economic growth (or something along those lines).
I am not sure how Kahn academy teaches it, but there is a chance their videos haven't been updated to include the ample reserves monetary policy. But either way, both expansionary policies shift the AD curve right. Monetary policy decreases interest rates (in the money market for scarce reserves or reserves market for ample reserves) while fiscal policy increases interest rates (in the loanable funds market. Interest rates (and their impacts) are indeterminate as a result. Good luck on your exams!
@@ReviewEcon Thank you so much for your reply. I double-checked your video with the summary chart on Khan. They didn't consider nor include the policy effect on the Money Market and Loanable fund market. Therefore, they neglected the contradicting effect on the interest rate of expansionary monetary policy and expansionary fiscal policy. Your analysis is more comprehensive!🥰
I’m also a junior taking macro in one semester (although not micro) and my teacher sucked so now I’m trying to re-learn everything in time for the exam 😅 we have like a week so good luck to us 🤞
I found this an hour before my Olympiad! It solved all of my queries! Thank you so much Mr. Jacob!
You're very welcome! I sure hope your competition went well!
Easy to understand explanations covering wide topics, this helped me a lot. Great video!
I'm so glad it helped! Good luck with your studies!
We're behind schedule in my class right now and we barely have time to cover anything past Unit 4. Your videos have been an amazing help for me. Thank you so much!
You're very welcome! Good luck on the upcoming exams!
Cramming before the Macro AP exam, thanks for the vid! It really helps!
Thanks for watching! Good luck!
Thank you so much. My teacher did not teach us some concepts like the interact between MP and FP. Your summaries are so helpful and they show me what unit I need to go back to review. 😊Praying I get a 4.
You're very welcome! Good luck on Friday!
Thanks for the video, it's really helpful for me to get all the concepts. It's almost the Big AP exam, hope that I will be doing great this time!
You're very welcome! Good luck on your exams!
@@ReviewEconaqaa
this is soooo helpful!!! lit my fav econ channel! thankyou so muchhhhh! life saver frrrrrrrr
Thank you! 😄
And you're welcome!
WOW, such a great review video and playlist, 1 and a half week before Econ Challenge state for David Ricardo division!!!
Good luck! 🤘😎
I'm a little bit confused of the part where expansionary MP and FP both lead to the increase in AD. Because fiscal policy will increase the demand of loanable funds which increases the interest rate, thus decreasing AD. But fiscal policy prompts consumer spending and government purchase, which means it will also increase the AD. I feel like we cannot determine whether fiscal policy can affect the AD or not at this point.
The expansionary impact of a decrease in taxes and/or increase in government spending will be less than the crowding out effect (decrease in Ig).
The rightward AD shift of expansionary fiscal policy is the primary effect and the leftward AD shift from crowding out is the secondary effect. Focus on primary effects unless otherwise specified.
I hope that helps!
Thank you!!!!!!! Best wish for tomorrow everyone
You're very welcome!
And yes! Good luck to you and everyone else taking the exam tomorrow!
thank you! quick question- for the SRPC shifting due to shift in SRAS, would that mean that unemployment rate doesn’t change, just an increase in inflation rate? hopefully this question makes sense, thank you!
Just like and SRAS shift causes a change in the PL and real output, an SRPC shift will cause a change in unemployment (the opposite direction of the change in real output) and cause a change in the inflation rate (the same direction as the change in the price level).
I hope that helps!
Would the increase in money supply also shift the LRAS because there are more investment?
So... This is a tricky one... As we have conflicting ideas in the Macro models.
If a question asks about the long run impact of an increase in the money supply, The answer will be no change in real output but a higher price level. The reason being that the aggregate demand rightward shift is counteracted by a long run leftward shift of the short run area supply curve caused by increased inflation expectations. In this analysis the increased potential GDP from the increased investment is ignored.
But, if the interest rate decreases, there will be an increase in gross investment. That gross investment will increase economic growth which we see as a right word shift of the long run aggregate supply curve. But my advice is to only consider the long run aggregate supply curve shift if the question asks about economic growth (or something along those lines).
I wish I had discovered this before unit 5 lol. Super helpful!
Better late than never! 😅
Good luck on your exams!
such a good video, thanks for the help!
Thank you! Good luck with your exams!
taking the ap exam tmr thanks for helping me
You're welcome! Good luck!
This is a brilliant video!
Thank you!!
I love your hat! Where can I buy one?
I'm not selling them at this point (maybe some day), I had it made on Etsy. Feel free to do the same! 😀
very good video thank you
You're very welcome! Good luck with your exams!
Legend.
Thank you! Good luck to your students on this year's exam!
thanks! - mico
You're welcome!
I am sorry but the part in 5.1 about the effect of Expansionary MP and FP differs from the summary on Khan Academy. I am a bit confused
I am not sure how Kahn academy teaches it, but there is a chance their videos haven't been updated to include the ample reserves monetary policy.
But either way, both expansionary policies shift the AD curve right. Monetary policy decreases interest rates (in the money market for scarce reserves or reserves market for ample reserves) while fiscal policy increases interest rates (in the loanable funds market. Interest rates (and their impacts) are indeterminate as a result.
Good luck on your exams!
@@ReviewEcon Thank you so much for your reply. I double-checked your video with the summary chart on Khan. They didn't consider nor include the policy effect on the Money Market and Loanable fund market. Therefore, they neglected the contradicting effect on the interest rate of expansionary monetary policy and expansionary fiscal policy. Your analysis is more comprehensive!🥰
I'm glad I could help! Good luck with the exam this year!
thank you!
You're welcome!
thanks brah
You're welcome!
Thx dude
You're welcome! Good luck with your studies!
I am a Junior taking ap micro and macro, each in one semester, I hope I get fives on my ap exams :0
I wish you the very best of luck!!
I’m also a junior taking macro in one semester (although not micro) and my teacher sucked so now I’m trying to re-learn everything in time for the exam 😅 we have like a week so good luck to us 🤞
@@so_obsessed_ same situation, 1 day before exam
@@raiymbekb yep. good luck tomorrow!
watching this one hour before my macro exam😭
You got this!! Good luck!
fabi was here
Welcome fabi!
🐊
Not sure what the alligator emoji means, but I'll take it as a compliment. 🤷♂️😅
Thank you! Good luck on your exams!