<p>I really liked those old Free-response questions that designeraddict posted (although I totally lost like half points on the GDP questions… I need to review that technical stuff),
does anyone have any links to other old exams?</p>
<p>Oh and vasudevank - in your fiscal policy, you totally forgot about government spending. So for expansionary fiscal policy, government can decrease taxes, increase government expenditures (spending), or a mixture of both.</p>
<p>What are: Recognition Lag, Administrative Lag, and Operational Lag</p>
<p>I haven’t even heard of those before.</p>
<p>Any1 know Y we’re not allowed to use calcs</p>
<p>^common sense?</p>
<p>also, u can store text data in some</p>
<p>Alex7592 - </p>
<p>1) Recognition lag - the fact that it takes people awhile to realize that we’re in a recession, just because humans can’t read the signs of the market and understand what it’s doing to the minute. For instance, it was only a few months ago that economists “officially” decided when the American recession began. They only were able to recognize when it began like a whole year after it actually did begin.</p>
<p>2) Administrative Lag - it takes Congress awhile to pass bills, they have to debate and all that (did you see all the debate over Obama’s Stimulus bill?)</p>
<p>3) Operational Lag - even once the law is passed, it takes awhile for it to actually happen. The money has to get distributed to the necessary department, they have to decide on a company they want to contract the job out to, and then they have to hire the people and all that. Bureaucracy mostly, and it all takes time.</p>
<p>kook78891 - the same reason you’re not allowed to use calculators the English, Foreign Language, and History APs I would assume</p>
<p>If you need a calculator when doing GDP deflator or spending/lending
multiplier questions you’re in trouble…</p>
<p>Ok thanks!!!</p>
<p>and yes, If the math is so hard that you need a calculator, you are doing it wrong.</p>
<p>I have an important question regarding the FRQs and AS/AD.</p>
<p>Does it matter which “type” of AS/AD we draw? I like to draw curved lines with increasing slopes for both AS and AD. My review book draws linear (straight) lines (like a normal supply/demand graph). There is also the graph with the horizontal (Keynesian) stage, Intermediate stage, and vertical (classical) stage for the AS. Does it matter which one we use? Will we loose points?</p>
<p>Just do straight lines. In fact, if you draw a curved AD line that might actually be wrong (unless you can tell me why it would be curved). Though a curved AS line where the slope is gradually increasing is correct, because that’s basically showing the fact that there is a Keynesian, Intermediate and classical stage to the AS line.</p>
<p>Anyway, just draw straight lines, it’s probably no big deal</p>
<p>vasudevank: the classical view of AS is that it’s vertical, which corresponds to the classical stage on the full AS line, but keynesians view it as upward sloping, so why does is the horizontal stage of the AS line called the keynesian stage? am i confusing two different AS lines?</p>
<p>I don’t think the classical view is vertical. Keynsian is somewhat straight lines that is horizontal, then slight up slope, then goes straight up at LRAS. It is that you can’t go over max GDP, so that is how that works. The newer version is a curved upsloping AS curve because the turns are not supposed to be as abrupt.</p>
<p>Keynesian is horizontal, classical is vertical.</p>
<p>Okay so does everybody do straight lines?</p>
<p>Not for philips curve, or the PPF</p>
<p>Well I understand that</p>
<p>how was I supposed to know that?</p>
<p>Well I was referring to my earlier question where I said “Does it matter which “type” of AS/AD we draw?”</p>
<p>Does anyone have the 2005 AP macroeconomics test answers or know were I could find them online? Thanks, I really need them.</p>
<p>“vasudevank: the classical view of AS is that it’s vertical, which corresponds to the classical stage on the full AS line, but keynesians view it as upward sloping, so why does is the horizontal stage of the AS line called the keynesian stage? am i confusing two different AS lines?”</p>
<p>Classical - yes, that the AS is vertical. This was so because classical economists believed in the (later disproved) Say’s Law - that supply creates its own demand (and thus that its impossible for the economy to leave its full employment output). Nowadays, we know that this is only true at or above the full employment output, not below.</p>
<p>Keynesian - this is where the AS is horizontal. Neokeynesians (those around today) don’t still believe this, however, John Maynard Keynes did. He postulated that the AS is horizontal in the economic times that he lived through - the Great Depression. So when output is far below full employment and in a depression, it’s actually true that the AS line is horizontal. This is because during a depression firms have large inventories of goods, and there are so many unemployed that if they were to increase capacity they wouldn’t have to increase wages. Thus, the horizontal part of the AS curve is sometimes called the depression stage.</p>
<p>Mainstream economists - Currently, mainstream, neokeynesians and neoclassic economists all recognize that during normal times, the AS line is somewhere between horizontal and verticle: upward-sloping, getting gradually closer to vertical as output increases, and getting gradually closer to horizontal as output decreases.
Thus, we just draw the AS line as an upward-sloping curve and don’t have to put in horizontal and vertical sections.</p>
<p>Bigb14 - I’ve actually seen both PPF and Philips Curves drawn with straight lines - in textbooks and economic articles. Mostly because economists are just kinda lazy. Still, it is probably best that we draw curved lines for the Philips Curve and PPF. For the AS line I suppose it doesn’t matter, after all they’re going to ask us to shift it a lot and find new equilibrium points, which is so much easier to do when it’s just a straight line.</p>
<p>^Thanks for clearing that up. I actually didn’t really know much about the differences in AS - we didn’t have enough time in class to go over all of the changes in AS over time so we just did the current situation. The most important is to know that AS slopes up as it goes toward full employment because it becomes more expensive to expand production so its relatively flat and then goes up exponentially. </p>
<p>Also one can draw Philips curve with a straight line along with PPF’s. If you want to you can make it curved, but straight just simplifies the graph. AP graders simply want you get the correct relationship down.</p>