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Jibin Park

Jibin Park

Aggregate Supply & Demand

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Table of Contents

Section 1: Introduction
Intro to Macroeconomics

43m 55s

Intro
0:00
Lesson Overview
0:14
What is Economics?
1:33
The Study of How People Seek to Satisfy Their Needs and Wants by Making Choices
1:40
Scarcity
1:56
Four Factors of Production (Resources)
2:59
Land
3:40
Labor
3:53
Capital
4:06
Entrepreneurship
4:50
Needs vs. Wabts
5:10
Choice and Cost
11:24
Opportunity Cost
12:41
Trade-Off
13:20
Opportunity Cost Example
14:16
Positive Economics vs. Normative Economics
16:19
Positive Economics
16:40
Normative Economics
17:26
Is It Normative or Positive?
18:30
Marginal Analysis
20:54
Thinking at the Margin
21:03
All or Nothing Propositions
21:29
Whether or Not to Consume the Next Unit
22:01
Marginal Analysis Example
22:10
Production Possibilities Frontier
25:00
Graph
25:17
Efficiency
25:25
Underutilization
25:38
PPF Graphs
25:45
Guns or Butter Analogy
26:03
Increasing Opportunity Cost
27:48
Law of Increasing Opportunity Cost
27:54
Curve Will Be Concave
28:04
Example
28:08
Constant Opportunity Cost
33:45
Definition of Constant Opportunity Cost
34:07
Downward-Sloping Line
34:14
Example
34:17
Example 1
37:32
Example 2
39:12
Example 3
40:37
Example 4
42:11
Comparative Advantage & Trade

45m 14s

Intro
0:00
Lesson Overview
0:07
Different Types of Economies
1:30
Market Economy
1:41
Command Economy
2:28
Mixed Economies
3:50
Absolute Advantage
4:38
Better In Producing a Particular Product
4:54
Example
5:03
Comparative Advantage
8:09
Lower Opportunity Cost in Producing a Particular Product
8:27
Example
8:52
Comparative Advantage and PPF Graph
14:30
Example 1
21:33
Example 2
25:57
Example 3
28:59
Example 4
30:17
Example 5
35:21
Example 6
40:37
Supply & Demand

48m 5s

Intro
0:00
Lesson Overview
0:09
Supply and Demand
1:34
Supply and Demand Model
1:39
Demand Curve
2:19
Supply Curve
2:23
Set of Factors
2:33
Equilibrium Price and Quantity
2:55
Demand Schedule and Demand Curve
3:09
Market Demand Schedule
3:19
Market Demand Curve
3:42
Example
3:51
Shifts of the Demand Curve
8:03
Changes in the Prices of Related Goods
8:19
Changes in Income
12:43
Changes in Tastes
14:35
Changes in Expectations
15:47
Increase in Demand (Rightward Shift)
17:25
Decrease in Demand (Leftward Shift)
18:37
Supply Schedule and Supply Curve
19:45
Market Supply Schedule
19:57
Market Supply Curve
20:09
Example
20:15
Shifts of the Supply Curve
23:38
Changes in Input Prices
24:04
Changes in Technology
24:49
Changes in Expectations
25:38
Increase in Supply (Rightward Shift)
26:56
Decrease in Supply (Leftward Shift)
28:10
Supply, Demand, and Equilibrium
29:02
Equilibrium Price
29:14
Equilibrium Quantity
29:26
Equilibrium
29:32
Surplus and Shortage
30:58
Surplus
31:09
Shortage
31:17
Example
31:22
Example 1
34:50
Example 2
36:05
Example 3
38:09
Example 4
41:53
Example 5
45:09
Changes in Supply and Demand

30m 7s

Intro
0:00
Lesson Overview
0:17
Shifts of the Demand or Supply Curve
1:34
Demand Shift to the Right
1:47
Demand Shift to the Left
2:04
Supply Shift to the Right
2:28
Supply Shift to the Left
2:42
Example 1
3:36
Example 2
5:46
Example 3
7:43
Example 4
9:37
Shifts of Both the Demand and Supply Curves
11:53
Demand and Supply Shift to the Right
13:24
Demand and Supply Shift to the Left
13:36
Supply Shift to the Left and Demand Shift to the Right
13:55
Supply Shift to the Right and Demand Shift to the Left
14:18
Example 5
17:13
Example 6
20:21
Example 7
22:44
Example 8
25:06
Section 2: Measurements of Economic Performances
Gross Domestic Product

50m 25s

Intro
0:00
Lesson Overview
0:27
National Accounts
1:20
National Income and Product Accounts
1:21
Macroeconomist Equation
2:35
Circular Flow of the Economy
9:23
Household
11:52
Firms
12:16
Product Market
12:31
Factor Market
12:40
Expanded Circular Flow Diagram
22:26
GDP Explained
30:36
Gross Domestic Product
30:43
First Method of Calculating
34:01
Second Method
35:00
Third Method
35:34
Real vs. Nominal GDP
36:21
Nominal GDP
36:36
Real GDP
36:51
Which is a More Accurate Means of Measuring Economic Growth
38:04
Real GDP Example (2010 Base)
39:08
Real GDP Per Capita
47:36
Real GDP Per Capita
48:46
Imperfect Measure but Generally Best Measure of Standard of Living
49:59
Unemployment

43m 39s

Intro
0:00
Lesson Overview
0:14
Am I Unemployed?
1:59
Unemployment Measures
4:43
Employed
4:46
Unemployed
5:20
Labor Force
5:53
Labor Force Participation
6:21
Unemployment Rate
6:39
Unemployment Example
7:56
Limitations of the Unemployment Rate
11:06
Unemployment Tends to Understand the Employment Situation
11:16
Marginally Attached to Labor Force
11:32
Discouraged Worker
12:20
Underemployed
13:17
Types of Unemployment
14:37
Frictional Unemployment
14:45
Structural Unemployment
16:06
Cyclical Unemployment
17:00
Effect of Minimum Wage of Labor Market
19:00
Natural Unemployment Rate
22:36
Natural Unemployment
22:13
Actual Unemployment
23:47
Full Employment
24:06
Unemployment Examples
25:54
US Unemployment Data
26:16
Unemployment Rate Declined in November 2013
26:59
Civilian Labor Force Rose
28:47
Return of Furloughed Federal Government Worker
29:10
2.1 Million Marginally Attached to the Labor Force Went Down
29:44
Reasons to Not Join Labor Force
30:50
Average Workweek Increased
31:17
Average Hourly Earnings Increased
31:48
Trends in US Unemployment
32:20
Unemployment Rate Example
34:29
Inflation

28m 44s

Intro
0:00
Lesson Overview
0:09
What is Inflation?
1:11
Purchasing Power of Your Money Decreases
1:16
All Prices Increase
1:46
Fed Chairman Paul Volcke's Top Priority
2:14
Target Federal Funds Rate
2:52
What's Wrong with Inflation
3:37
Costs of Inflation
3:48
Shoe-Leather Costs
3:57
Menu Costs
4:49
Unit-of-Account Costs
5:55
Crucifying Mankind on a Cross of Gold
6:32
Winners and Losers from Inflation
8:16
Nominal Interest Rate
8:21
Real Interest Rate
9:10
Real Interest Rate Examples
11:26
Wage-Price Spiral
14:29
Combination of 'Cost-Push' and 'Demand-Pull' Inflation
14:33
Demand-Pull Inflation
14:41
Wage-Price Spiral
15:13
Keynesians Tend to Favor This Model of How Inflation Works
16:10
Monetarist View of Inflation
17:04
Issue of Money Supply
17:13
Quantity Theory of Money
17:28
Austrian View
17:53
Paul Krugman's View
18:47
Measurement and Calculation of Inflation
19:37
Aggregate Price Level
19:41
Market Basket
19:48
Price Index
20:02
Consumer Price Index and PPI
21:51
Consumer Price Index
21:58
Producer Price Index
23:59
GDP Deflator
24:35
GDP Deflator Equation
24:36
Shows How Much the Aggregate Price Level Has Increased
24:55
Not Based on a Fixed Basket of Good's and Services
25:05
Default Basket
25:24
Price Index Problems
25:54
Section 3: National Income and Price Determination
Aggregate Demand

30m 20s

Intro
0:00
Lesson Overview
0:07
What is Aggregate Demand
1:29
Aggregate Demand Curve
1:34
All Things Equal
2:10
Basic Equation of National Income Accounting
2:35
Aggregate Demand Curve
3:54
Why is the AD Downward Sloping?
6:36
Demand Curve for an Individual Good
6:56
Aggregate Demand
7:32
Why Does a Rise in Aggregate Price Level Lead to a Fall in the Quantity of All Domestically Produced Goods?
8:00
The Wealth and Interest Rate Effect
8:25
Wealth Effect
8:34
Interest Rate Effect
9:47
Shifts in the Aggregate Demand Curve
11:01
Changes in Expectations
11:30
Changes in Wealth
12:47
Sixe of the Existing Stock of Physical Capital
13:34
Monetary and Fiscal Policy
14:13
Fiscal Policy
14:26
Monetary Policy
16:32
Example 1
20:27
Example 2
21:52
Example 3
24:20
Example 4
26:06
Aggregate Supply

24m 3s

Intro
0:00
Lesson Overview
0:12
What is Short-Run Aggregate Supply?
1:11
Shows the Relationship
1:17
Profit Per Unit of Output
1:41
Aggregate Supply Curve
2:35
Nominal Wages and Sticky Wages
4:05
Largest Source of Inflexible Production Cost
4:11
Nominal Wages Paid to Workers
5:09
Sticky Wages
5:48
Slow to Fall in Unemployment
6:04
Shifts in the Aggregate Supply Curve
9:33
Changes in Commodity Prices
10:15
Changes in Nominal Wages
10:45
Changes in Productivity
11:29
Long-Run Aggregate Supply Curve
12:24
Shows the Relationship
12:30
Potential Output
12:47
What Would Shift the LRAS?
13:57
Example 1
15:10
Example 2
18:11
Example 3
20:37
Example 4
21:41
Aggregate Supply & Demand

43m 41s

Intro
0:00
Lesson Overview
0:11
Long-Run Macroeconomic Equilibrium
1:06
The AD-AS Model
3:29
Short-Run Macroeconomic Equilibrium
3:34
Long-Run Macroeconomic Equilibrium
4:00
Recessionary Gap
4:55
Inflationary Gap
5:20
The Long-Run Approach
5:50
Initial Negative Demand Shock
6:33
Higher Unemployment in the Short-Run
6:52
Economy Moves Back to Potential Output
7:12
Self-Correcting Recessionary Gap
7:54
Expansionary Fiscal Policy
11:22
'In the Long-Run, We Are All Dead'
12:11
Increase Government Spending
13:00
Decrease Taxes
13:30
Increase in Government Transfers
13:55
Expansionary Fiscal Policy Graph
14:27
The Long-Run Approach
18:08
An Initial Positive Demand Shock
18:21
Higher Inflation and Reduced Unemployment
18:20
Economy Moves Back to Potential Output
18:27
Self-Correcting Inflationary Gap
19:04
Contrationary Fiscal Policy
22:39
President Johnson's Temporary Hike on Income Taxes
22:50
Decrease Government Spending
23:16
Increase Taxes
23:34
Decrease in Government Transfers
23:50
Contrationary Fiscal Policy Graph
24:05
Stabilization Policy
28:10
Government Policy to Refuce the Severity of Recessions
28:17
Should the Government Use Fiscal Policy to Reduce the Severity of Negative Demand Shocks
28:37
What Should the Government Due in the Face of a Negative Supply Shock?
30:19
Example 1
31:32
Example 2
34:30
Example 3
38:22
Example 4
39:58
Fiscal Policy & The Multiplier

45m 30s

Intro
0:00
Lesson Overview
0:09
The MPC and MPS
1:19
Investment Spending Increases
1:29
Increased Output
2:03
Marginal Propensity to Consumer and Marginal Propensity to Save
3:02
MPC
3:18
MPS
3:28
The Marginal Propensity to Consume
3:57
Number Is 0
4:55
Number is 1
5:13
Number is Usually Between 0 and 1
6:39
Number is 0.8
7:52
Formula
8:15
The Multiplier Effect
9:51
Autonomous Change in Aggregate Spending
9:59
Multiplier
10:36
Size of the Multiplier
11:36
Consumption Function
13:15
Equation Showing How an Individual's Household's Consumer Spending Changes with Disposable Income
13:45
Autonomous Consumer Spending
13:58
Formula
14:48
Example
15:30
Consumption Function Example
18:27
Shifts of the Aggregate Consumption Function
21:31
Changes in Expected Future Disposable Income
21:42
Changes in Aggregate Wealth
23:22
Investment Spending
24:12
If Interest Rates Go Up or Down
24:36
Expected Future Growth
25:07
Formula
25:18
Positive Unplanned Inventory Investment
25:31
Tax (or Government Transfer) Multiplier
26:38
Automatic Stabilizers
31:26
As the Economy Expands
32:03
As the Economy Contracts
32:42
2008 and 2009 Stimulus Package
33:20
2008 Question of Tax Cuts or Transfer Payments
33:21
2009 American Recovery and Reinvestment Act
36:16
Example 1
38:23
Example 2
41:19
Example 3
42:33
Example 4
43:13
Section 4: Financial Sector
Saving, Investment & the Financial System

48m 57s

Intro
0:00
Lesson Overview
0:08
Saving-Investment Spending Identity
1:49
Savings-Investment Spending Identity
2:09
Imagine a Country with No Government and No Trade
2:35
Budget Surplus and Deficit
7:34
Budget Surplus
8:19
Budget Deficit
10:34
Budget Balance
12:19
National Savings
12:42
Capital Inflows and Outflows
14:26
Cashflow
15:10
Capital Inflow
15:57
2008 Example
16:12
Tasks of a Financial System
20:43
Reduce Transaction Costs
21:25
Reduce Risk
21:59
Provide Liquidity
24:04
Types of Financial Assets
25:29
Bonds
25:45
Loan-Backed Securities
28:39
Stocks
30:12
Financial Intermediary
31:56
Types of Financial Intermediaries
32:01
75% of Wealth in U.S. is Held by These Four
32:29
Mutual Funds
33:08
Definition of Mutual Funds
33:17
Benefit
34:39
Downside
35:03
Households Owned Over $10 Trillion in Mutual Funds
37:47
Fidelity Investments
38:02
Pension Funds and Life Insurance
38:16
Pension Funds
38:22
Life Insurance
40:31
Banks
42:34
Accept Funds From Depositors
42:40
Keep a Fraction of Customers' Deposits in Cash Form
42:44
FDIC
43:55
Example 1
44:10
Example 2
45:01
Example 3
45:48
Example 4
47:34
The Definition & Time Value of Money

34m 5s

Intro
0:00
Lesson Overview
0:21
What is Money?
1:49
Assets That Can Be Easily Used to Purchase Goods and Services
1:52
Money in Savings Accounts, CDs or Money Market Accounts
3:02
Roles of Money
5:37
Medium of Exchange
5:53
Store of Value
6:56
Unit of Account
9:15
Types of Money
9:56
Commodity Money
10:16
Commodity-Backed Money
10:50
Fiat Money
12:20
M1 and M2
16:29
M1
16:34
M2
16:40
2010 Facts
17:01
A Penny Doubled
18:59
Present vs. Future Value
20:26
Formula
20:35
Future Value
20:42
Present Value
20:49
Interest Rate
20:54
Time Period of Investment
20:57
$0.01 = ?????
23:25
Winning the Lottery Example
24:52
Example 1
27:06
Example 2
28:33
Example 3
29:34
Example 4
31:21
Banking & Money Creation

32m

Intro
0:00
Lesson Overview
0:12
What Do Banks Do?
1:09
What Are Banks
1:13
Restrictions
1:52
Federal Reserve
2:24
Assets and Liabilities of Park's Place Bank
2:39
The Problem of Bank Runs
6:36
Financial Trouble Rumors Lead to Depositors Withdrawing Funds
7:17
Panic
7:30
Self-Fulfilling Prophecy
8:02
Bank Regulation
8:37
Deposit Insurance
8:56
Capital Requirement
9:46
Reserve Requirements
10:21
Discount Window
11:23
Money Creation Process
12:24
Money Multiplier Formula
15:20
Required Reserve Ratio
15:23
Example
15:31
Real World Money Multiplier
17:11
Some People Hold Onto Cash
17:16
Monetary Base
17:37
Money Supply
18:20
Money Multiplier
18:33
Normally It Is About 1.9
19:08
2008: It Was About 0.8
19:35
Venn Diagram
20:06
Example 1
22:28
Example 2
23:57
Example 3
26:30
Example 4
29:05
The Federal Reserve & Monetary Policy

25m 42s

Intro
0:00
Lesson Overview
0:08
History of the Federal Reserve
1:23
Established in 1913
1:27
Private Institution with a Public Component
2:22
Board of Governors
3:10
The Federal Reserve Structure
3:54
12 Federal Reserve Banks
3:57
Federal Open Market Committee
4:50
Functions of the Federal Reserve
5:22
Provide Financial Services
5:35
Supervise and Regular Banking Institutions
6:14
Maintain the Stability of the Financial System
6:34
Conduct Monetary Policy
7:20
Reserve Requirement and Discount Rate
8:00
Reserve Requirement
8:10
Discount Rate
10:24
Open Market Operations
10:55
Fed Buys or Sells U.S. Treasury Bills Through a Commercial Bank
11:25
How Do They Purchase It?
12:36
The Financial Crisis of 2008
13:31
Subprime Lending and the Housing Bubble
13:36
Fed Chair Alan Greenspan
14:01
Low Interest Rates
14:23
2003-2006 Suprime Lending Increased in Popularity
14:52
Crisis and Response
16:19
Housing Collapse
16:24
Fed Bailed Our Bear Stearns and Insurance Giant AIG
16:37
Widespread Panic in the Financial System
16:55
Quantitative Easing
17:48
Example 1
18:45
Example 2
19:25
Example 3
20:07
Example 4
22:57
The Money Market

33m 52s

Intro
0:00
Lesson Overview
0:04
Opportunity Cost of Holding Money
0:57
Can't Be Used to Invest in Other Assets
1:02
2007 Federal Funds Rate
2:24
2008 Federal Funds Rate
2:35
2009 Federal Funds Rate
2:42
The Money Demand Curve
5:01
Shifts of the Money Demand Curve
6:29
Changes in the Aggregate Price Level
7:18
Changes in Real GDP
8:54
Changes in Technology
9:44
Changes in Institutions
12:55
Money and Interest Rates
13:24
FOCM Sets up the Target Federal Funds Rate
13:28
Lower Federal Funds Rate
15:11
0% Federal Funds Rate Era
16:10
Liquidity Preference Model
16:56
Liquidity Preference Model of the Interest Rate
17:09
Open Market Operations
18:21
Changing Reserve Requirements
18:52
Lending Through the Discount Window
19:22
Equilibrium in the Money Market
19:52
Example 1
21:19
Example 2
23:21
Example 3
26:22
Example 4
30:14
The Market for Loanable Funds

32m 55s

Intro
0:00
Lesson Overview
0:05
Loanable Funds Market
0:57
Loanable Funds Markets
1:17
Savers
1:46
Borrowers
2:26
Equilibrium in the Loanable Funds Market
3:27
Equilibrium in Loanable Funds Market
3:45
Shifts of Demand for Loanable Funds
5:47
Changes in Perceived Business Opportunities
5:59
Changes In the Government's Borrowing
7:10
Shifts of the Supply of Loanable Funds
8:35
Changes in Private Savings Behavior
8:44
Changes in Capital Inflows
10:24
Inflation and Interest Rates
11:07
Real Interest Rate
12:01
A Good Hedge Against Inflation
14:21
Fisher Effect
14:54
Increase in Supply of Loanable Funds
15:38
Interest Rate in the Short Run
16:57
Fall in Interest Rates
17:00
Increase in the Money Market
17:14
Short Run
17:26
Interest Rate in the Long Run
18:16
Increase in Money Supply in Long Run
18:41
Supply of Loanable Funds
19:42
Supply and Demand for Loanable Funds Determines the Interest Rate
20:12
Example 1
20:20
Example 2
23:40
Example 3
28:18
Example 4
29:29
Section 5: Inflation, Unemployment, and Stabilization Policies
Budget Deficits & the National Debt

40m 8s

Intro
0:00
Lesson Overview
0:07
The Budget Balance
1:20
Formula
1:54
Rule of Thumb
4:07
Generally, Contractionary Fiscal Policies Will Increase the Budget Balance
6:02
Cyclically Adjusted Budget Balance
9:35
Estimate if Real GDP was Equal to Potential Output
9:56
Economic Expansion
10:13
Contractions
10:44
Should the Budget Be Balanced?
11:35
Balanced Budget Amendment
13:00
Restricts a Country's Ability to Run a Budget Deficit During Recessions
13:40
National Debt
15:50
Problems of a Rising Government Debt
16:15
Crowding Out Effect
16:28
Today's Deficits Increases the Public Debt
18:17
Historical Debt-GDP Ratio
20:33
Trends in Debt-GDP Ratio
24:03
U.S. Trends to Run a Budget Deficit During War
24:05
U.S. Total Debt-GDP Ratio Exceeded 100% During Relative Peace
24:30
Debt Grows Larger with Projected Budget Deficits Continuing
25:06
Implicit Liabilities
26:35
Spending Promises Made by the Government
26:45
Three Largest Implicit Liabilities of the American Gov
27:27
Net Present Value of Debt
28:26
Example 1
29:25
Example 2
33:40
Example 3
35:28
Example 4
37:59
Inflation & Unemployment

32m 24s

Intro
0:00
Lesson Overview
0:09
The Short-Run Phillips Curve
1:05
High Unemployment Rate
1:24
Low Unemployment Rate
1:49
Short-Run Phillips Curve Graph
3:20
Inflation Expectations
6:24
Increase in Expected Inflation
6:47
Expectations Based on Experience
6:58
Inflation and Unemployment in the Long Run
7:39
Most Economists Believe There is No Trade-Off Between Unemployment and Inflation
7:48
Nonaccelerating Inflation Rate of Unemployment NAIRU
8:27
Long-Run Phillips Curve
9:01
Long-Run Phillips Curve and NAIRU
9:24
The Costs of Disinflation
12:03
Harder to Bring Inflation Down Than to Increase It
13:10
Disinflation
13:38
Long-Term Benefit of Controlling Double-Digit Inflation
14:13
Announcing Policy of Disinflation
14:55
The Costs of Deflation
15:21
Deflation is the Fall in the Aggregate Price Level
15:53
Why is Deflation Bad?
16:35
Lenders Gain and Borrowers Lose
17:31
Effect of Deflation
17:43
Japan's Liquidity Trap of the 1990s
19:30
Liquidity Trap
22:13
Japan Example
22:58
Example 1
23:48
Example 2
25:14
Example 3
27:05
Example 4
28:31
Section 6: Economic Growth and Productivity
Economic Growth

32m 28s

Intro
0:00
Lesson Overview
0:07
Real GDP Per Capita
1:17
Real GDP Per Capita
1:23
How Do You Find the Real GDP Per Capita
1:34
Many Countries Have Lower Standard of Living Than U.S.A. 100 Years Ago
4:29
Long Run Economic Growth
5:36
Growth Rate
6:00
Physical Capital
8:09
Human Capital
8:27
Technology
9:17
Economic Growth on a PPF Graph
10:37
Investment vs. Consumer Good
15:31
Long-Run Growth and the LRAS Curve
19:08
Short-Run to Long-Run: Example 1
21:07
Short-Run to Long-Run: Example 2
24:01
Example 1
26:09
Example 2
27:33
Example 3
29:48
Example 4
31:09
Balance of Payments

36m 56s

Intro
0:00
Lesson Overview
0:06
Balance of Payments Account
1:01
Current Account
1:09
Sales and Purchases of Goods and Services
1:54
Factor Income
2:58
International Transfers
3:48
Sales, Factor and Transfers
4:13
Financial Account
7:58
Official Asset Sales and Purchases
8:29
Private Sale and Purchases of Assets
9:01
Financial Account
10:19
Current Account = -Financial Account
12:10
Formula
12:30
What a Country's Financial Account Measures
13:37
Financial Account and Loanable Supplies
14:30
Foreign Direct Investment
14:40
Exchanges Rates
15:20
Assume Equilibrium Interest Rate is 4%
15:30
The Loanable Funds Model: Example 1
15:50
The Loanable Funds Model: Example 2
16:49
GDP, GNP, and the Current Account
21:33
Basic Equation for National Income Accounting
21:45
Why Doesn't the National Income Equation Use the Current Account as a Whole?
22:23
Gross National Product Includes International Factor Income
22:54
Why Do We Use GDP and Not GNP
23:03
Global Savings Glut
24:07
U.S. Entered in a Massive Current Account Deficit
24:14
U.S. Takes in a Lot of Capital Inflow from the Rest of the World
24:50
How Did This Happen?
25:06
Example 1
27:05
Example 2
28:10
Example 3
30:43
Example 4
33:01
Section 7: Open Economy: International Trade and Finance
Foreign Exchange Market

40m 31s

Intro
0:00
Lesson Overview
0:06
Understanding Exchange Rates
1:19
Items Produced in a Country Will be Paid for In That Country's Currency
1:24
Foreign Exchange Market
2:12
The Foreign Exchange Market: Dollar Example
5:33
The Foreign Exchange Market: Euro Example
9:44
Inflation and Real Exchange Rates
15:34
Real Exchange Rates
16:32
Current Account Responds Only to Changes in the Real Exchange Rate
17:01
Purchasing Power Parity
18:02
Concept for Analyzing Interest Rates
18:10
Purchasing Power Parity Between Two Countries Currencies
18:24
In Theory, You 'Should' Be Able to Buy $100 Worth of Stuff in Any Country
19:01
Burgernomics
21:03
Big Mac Index
21:13
Not the Best Measure
21:54
U.S. Cost of Big Macs
22:38
Overvalued Big Macs
23:10
Undervalued Big Macs
24:09
Chart: Buns For Your Buck
25:12
Floating vs. Fixed Exchange Rate Regime
26:31
Fixed Exchange Rate
26:40
Floating Exchange Rate
27:50
Exchange Rate Dilemma
29:40
Fixed Rate Regimes Give Predictability to Trade
29:44
Every Choice Has a Cost
30:30
Example 1
32:21
Example 2
33:55
Example 3
35:25
Example 4
37:30
Section 8: AP Test
Major Graphs Review

21m 51s

Intro
0:00
Lesson Overview
0:08
The Scenario
1:07
The Inflationary Gap
3:27
The Money Market Graph
7:51
Higher Interest Rate = Decreased Investment
14:52
Exchange Market Graph
17:32
AP Practice Exam: Multiple Choice

46m 2s

Intro
0:00
Multiple Choice 1
0:30
Multiple Choice 2
6:21
Multiple Choice 3
7:33
Multiple Choice 4
9:54
Multiple Choice 5
12:04
Multiple Choice 6
14:49
Multiple Choice 7
17:11
Multiple Choice 8
19:11
Multiple Choice 9
20:17
Multiple Choice 10
22:55
Multiple Choice 11
24:25
Multiple Choice 12
27:56
Multiple Choice 13
29:08
Multiple Choice 14
30:00
Multiple Choice 15
31:26
Multiple Choice 16
32:57
Multiple Choice 17
33:44
Multiple Choice 18
36:12
Multiple Choice 19
38:11
Multiple Choice 20
40:40
Multiple Choice 21
42:55
AP Practice Exam: Free Response, 2012

23m 14s

Intro
0:00
Free Response 1
0:10
Free Response 2
11:19
Free Response 3
17:05
AP Practice Exam: Free Response, 2013

22m 39s

Intro
0:00
Free Response 1
0:14
Free Response 2
9:56
Free Response 3
15:34
AP Practice Exam: Full-Length Multiple Choice

1h 16m 21s

Intro
0:00
Multiple Choice 1
0:19
Multiple Choice 2
1:09
Multiple Choice 3
2:34
Multiple Choice 4
3:19
Multiple Choice 5
4:36
Multiple Choice 6
5:54
Multiple Choice 7
7:08
Multiple Choice 8
8:37
Multiple Choice 9
9:36
Multiple Choice 10
10:29
Multiple Choice 11
11:57
Multiple Choice 12
12:52
Multiple Choice 13
14:09
Multiple Choice 14
16:52
Multiple Choice 15
19:14
Multiple Choice 16
20:48
Multiple Choice 17
21:46
Multiple Choice 18
22:57
Multiple Choice 19
24:20
Multiple Choice 20
26:09
Multiple Choice 21
27:02
Multiple Choice 22
28:10
Multiple Choice 23
28:52
Multiple Choice 24
29:36
Multiple Choice 25
30:24
Multiple Choice 26
31:31
Multiple Choice 27
32:44
Multiple Choice 28
33:39
Multiple Choice 29
35:40
Multiple Choice 30
37:02
Multiple Choice 31
38:10
Multiple Choice 32
38:49
Multiple Choice 33
39:40
Multiple Choice 34
40:30
Multiple Choice 35
41:50
Multiple Choice 36
42:19
Multiple Choice 37
44:37
Multiple Choice 38
46:09
Multiple Choice 39
48:33
Multiple Choice 40
49:20
Multiple Choice 41
50:24
Multiple Choice 42
52:47
Multiple Choice 43
53:54
Multiple Choice 44
55:15
Multiple Choice 45
56:47
Multiple Choice 46
57:48
Multiple Choice 47
1:00:37
Multiple Choice 48
1:01:40
Multiple Choice 49
1:02:41
Multiple Choice 50
1:03:17
Multiple Choice 51
1:04:09
Multiple Choice 52
1:05:04
Multiple Choice 53
1:06:20
Multiple Choice 54
1:08:32
Multiple Choice 55
1:09:07
Multiple Choice 56
1:09:50
Multiple Choice 57
1:11:26
Multiple Choice 58
1:12:38
Multiple Choice 59
1:13:19
Multiple Choice 60
1:14:36
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Lecture Comments (8)

1 answer

Last reply by: Professor Jibin Park
Tue Mar 22, 2016 12:26 PM

Post by Sarmad Khokhar on March 9, 2016

Why wasn't LRAS on right side when you drew self correcting recessionary gap ?

1 answer

Last reply by: Professor Jibin Park
Thu Aug 27, 2015 1:09 AM

Post by Jim Tang on August 27, 2015

Why does increasing the prices of oil shift the supply to the left again? I thought that higher prices ==> larger incentive for aggregate suppliers to produce more ==> more supply.

1 answer

Last reply by: Professor Jibin Park
Mon Jan 12, 2015 5:20 PM

Post by Thadeus McNamara on January 3, 2015

10:45 why do the wages decrease?

1 answer

Last reply by: Angela Patrick
Wed May 14, 2014 8:08 PM

Post by Angela Patrick on May 14, 2014

I thought example 4 should be A because the tax multiplier should always have a greater magnitude at every MPC value, so if the government spending is the same as the amount taxes are increased, the taxes would have a greater impact.

Aggregate Supply & Demand

  • The short-run macroeconomic equilibrium occurs where the SRAS = AD
  • The long-run macroeconomic equilibrium occurs where the LRAS = AD
  • If the short-run equilibrium is to the left of the long-run equilibrium, the economy is experiencing a recession
  • If the short-run equilibrium is to the right of the long-run equilibrium, the economy is experiencing inflation
  • In the long-run, the economy will “self-correct” with the SRAS moving back to the LRAS
  • Expansionary fiscal and monetary policy make sense when the economy is experiencing a recession
  • Contractionary fiscal and monetary policy usually take place in reaction to inflationary times

Aggregate Supply & Demand

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • Lesson Overview 0:11
  • Long-Run Macroeconomic Equilibrium 1:06
  • The AD-AS Model 3:29
    • Short-Run Macroeconomic Equilibrium
    • Long-Run Macroeconomic Equilibrium
    • Recessionary Gap
    • Inflationary Gap
  • The Long-Run Approach 5:50
    • Initial Negative Demand Shock
    • Higher Unemployment in the Short-Run
    • Economy Moves Back to Potential Output
  • Self-Correcting Recessionary Gap 7:54
  • Expansionary Fiscal Policy 11:22
    • 'In the Long-Run, We Are All Dead'
    • Increase Government Spending
    • Decrease Taxes
    • Increase in Government Transfers
  • Expansionary Fiscal Policy Graph 14:27
  • The Long-Run Approach 18:08
    • An Initial Positive Demand Shock
    • Higher Inflation and Reduced Unemployment
    • Economy Moves Back to Potential Output
  • Self-Correcting Inflationary Gap 19:04
  • Contrationary Fiscal Policy 22:39
    • President Johnson's Temporary Hike on Income Taxes
    • Decrease Government Spending
    • Increase Taxes
    • Decrease in Government Transfers
  • Contrationary Fiscal Policy Graph 24:05
  • Stabilization Policy 28:10
    • Government Policy to Refuce the Severity of Recessions
    • Should the Government Use Fiscal Policy to Reduce the Severity of Negative Demand Shocks
    • What Should the Government Due in the Face of a Negative Supply Shock?
  • Example 1 31:32
  • Example 2 34:30
  • Example 3 38:22
  • Example 4 39:58

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