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Macroeconomics Unit 3 COMPLETE Summary - National Income and Price Level

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This video covers all of the key points of Unit 3 from the AP Macroeconomics Course Exam Description (CED). Multipliers, Aggregate Demand (AD), Short-run Aggregate Supply (SRAS), Long-run Aggregate Supply (LRAS), Long-run equilibrium, Inflationary Gap, Recessionary Gap, Long-run Adjustment, and Fiscal Policy.
For more help with unit three, there are content reviews, review games, and practice exercises for you at: www.reviewecon...
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Note: Topics are out of order because this is the oder in which they are covered in the ReviewEcon.com Total Review Booklet.
Note: AP©, Advanced Placement Program©, and College Board© are registered trademarks of the College Board, which was not involved in the production of, and does not endorse, this material.

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4 сен 2024

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Комментарии : 91

@stephaniecastro9200 3 года назад

Thank you!! You literally just taught me the whole unit so easy and to the point! Ready for my unit test next class!

@ReviewEcon 3 года назад

You're welcome! I am glad it helped. Good luck with your unit test!

@brandonmora2153 2 года назад

WAIT TRUE

@alehgngestie3341 Год назад

@@ReviewEcon❤

@drewgoodove3259 3 года назад

This channel is going to be the reason I pass my econ exams.

@ReviewEcon 3 года назад

Good luck!

@graham8643 3 года назад

This is the only video of this whole unit I could find, and man it was worth the hour and a half of rewinding to understand and take notes. Thank you!

@ReviewEcon 3 года назад

You're very welcome. I have a complete video for every unit, I hope the rest are just as helpful! Good luck with your exams!

@vanessaanaya9520 Год назад

You ARE the reason I am able to understand Macro and getting me through the semester! God bless you, I hope you hit the powerball. I will be returning when I take Micro next semester! THANK YOU!!!

@ReviewEcon Год назад

So glad to know my videos helped you! Good luck with the rest of this term and micro next term!!

@natecanonico1545 4 месяца назад

Hey how was your day? Taking the macro test tomorrow, wish me luck! Thank you for everything

@ReviewEcon 4 месяца назад

My day is going great! Good luck tomorrow! 😄

@ReviewEcon 3 месяца назад

The AP macro exam is on Friday, but lots of colleges are starting Finals.

@user-eo1bk5ye9g 5 месяцев назад

Holy moly!! this channel is honetly underrated, those full summary videos are what is helping me pass my exams!!! helps me undersstand the concepts and rather than bombarding with equations. thankyou!

@ReviewEcon 5 месяцев назад

You're very welcome! Good luck with those exams!

@noahschoenbaum3860 3 года назад

Thank you! This was so helpful

@ReviewEcon 3 года назад

I am so glad. 😀 You're very welcome!

@ashishronak5774 9 месяцев назад

You are the main reason why I do so good on the my ECON Tests. I really appreciate you making it so easy to understand. Continue to do what works for you.

@ReviewEcon 9 месяцев назад

You're very welcome! Good luck on your next test!!

@hackingchampion Год назад

After 2 years, this video is still maintaining the demand

@ReviewEcon Год назад

🤘😎😅

@mazinsaleh3489 3 года назад

Every summary is so helpful every time

@ReviewEcon 3 года назад

Awesome! Thank you!

@sukhmansidhu4453 Год назад

A literal godsend! Thank you so much for helping me review macro for the ap exam after a semester gap!

@ReviewEcon Год назад

You're welcome! Good luck on your exams!

@alterego7305 2 года назад

Thanks for everything, you're helping a ton of people out.

@ReviewEcon 2 года назад

You're very welcome!

@friederichostertag1666 3 года назад

very helpful,, thank you!

@ReviewEcon 3 года назад

Awesome! And you're welcome!

@cocoodb7697 3 года назад

🐐 he’s like my teacher but good at his job

@ReviewEcon 3 года назад

Sometimes it just takes someone saying in a slightly different way for it to make sense. Good luck on your exams!

@dolfinw4179 4 месяца назад

I got a 5 on micro last year because of you, now coming back to get a 5 on macro! Could you elaborate what does "wages and other resource prices are sticky in the short run"?

@ReviewEcon 4 месяца назад

Awesome! Welcome back! Sticky is the technical term (sticky is not on the exam) for the fact that wages (and other resource prices) are slow to adjust to economic conditions like changes in the price level. While you don't need to know sticky, you need to know wages and other resource prices are fixed in the short run and flexible in the long run. I hope that helps!

@dolfinw4179 4 месяца назад

@@ReviewEcon Alright thanks! One more question: does changing discount rate or reserve requirement shift the money supply just like buying and selling bonds?

@kiantaewebbfan5028 3 года назад

You deserve more subs, you’ve helped me out so much. Thanks 👍

@ReviewEcon 3 года назад

They're coming slowly. 😉 Thank you and you're welcome!

@Jessicabatdorj 3 года назад

Honestly thank you so much!

@ReviewEcon 3 года назад

You're very welcome!

@Lana-or5dz Год назад

Glad!!! I found these videos. I Currently have a low C need to maintain it to pass this class and finally move on .. Thank you so much for providing these videos they truly help with giving you a better understanding on the material because when I be reading them textbooks 📚 I don’t be retaining or knowing what the hell I’m reading .. once Again thank you! I truly do appreciate all your videos.

@ReviewEcon Год назад

You're very welcome! Good luck with the rest of the class!!

@jackriley713 3 месяца назад

I appreciate the video. One question. You mentioned that if oil prices decrease there will be a negative SRAS shock leading to stagnation. Wouldn’t it be the opposite? If oil prices fall wouldn’t the input cost for business go down leading to a rightward shift in the SRAS resulting in an inflationary gap?

@rael5333 3 месяца назад

correct

@ReviewEcon 3 месяца назад

I'll have to check and see if I mispoke. If I did, you are correct. Oil prices fall is a rightward SRAS shift, oil prices rise is a leftward SRAS shift.

@user-yj3ep9pt6u 5 месяцев назад

Thanks for the videos, I told my friends about them

@ReviewEcon 5 месяцев назад

Thank you! Good luck on your exams!

@allonbluvshteyn43 3 месяца назад

You said that in during an nflationary gap the LRAS shows that there is low unemployment. Using the phillip's curve we know that low unemployment means that there is high inflation. Therefore, at 11:52 in the video wouldn't aggregate demand shift left as consumption decreases due to the high inflation and thus bringing PL2 below PL1 as Y1 approaches Yf?

@ReviewEcon 3 месяца назад

There is less real GDP, but it's due to the leftward shift of the SRAS. Wage changes are the driving force. That's the self correction you need to know in the AP exam. Good luck!

@allonbluvshteyn43 3 месяца назад

@@ReviewEcon Thank you!

@joosh7380 Год назад

In ReviewEcon we trust 🙏🙏🙏

@ReviewEcon Год назад

Aw! Thank you! Good luck with your studies!

@so.phiaaa 3 месяца назад

At 14:18, did you mean to say the during contractions, transfer payments increase because more people are unemployed not fewer?

@ReviewEcon 3 месяца назад

It's a bit hard to hear but I say fewer both times "fewer employed" during contractions and "fewer unemployed" during expansions. Good luck!

@wahjergah4543 3 года назад

Thanks for this--it was really helpful, but I have a quick question. If, in inflationary fiscal policy, if you were to increase government spending (increase GDP) and also decrease taxes, why would decreasing taxes (therefore getting more money in people's pockets and letting them spend more), not cancel or overpower the effect on GDP that government spending would have (especially considering that consumer spending has a higher impact on GDP than government spending does)? Thanks for your help! EDIT: Whoops, didn't think this all the way through--if you cut taxes that would increase spending and therefore increase GDP anyway. Regardless, thank you so much for your help!

@ReviewEcon 3 года назад

Remember taxes and spending are entirely separate. Governments can change one without changing the other. The difference between the two is the budget deficit (or surplus). Expansionary fiscal policy (used to fight unemployment and close recessionary gap) is cutting taxes and/or decreasing spending. Cutting taxes increases gross investment and consumption, increasing government spending increases government purchases. Both of those shift AD to the right. Good luck on your exams!

@roombaoffline 3 месяца назад

who up cramming

@ReviewEcon 3 месяца назад

Smart people! :-)

@katherinewang6230 3 года назад

Hi, I have a question at the end of the video where you talk about transfer payments in automatic stabilizers. it should be an increase during expansions or a decrease during expansions. I thought it would be an increase because in a recessionary gap there is higher unemployment, so more people need the unemployment compensation. Thank you!

@ReviewEcon 3 года назад

Automatic stabilizers are anything that increases the budget deficit during a contraction, and decrease the budget deficit during an expansion. Taxes automatically decrease during a recession and increase during an expansion. Transfer payments, like unemployment, increase during contractions and decrease during expansions.

@katherinewang6230 3 года назад

@@ReviewEcon Sorry... I understand the first part (Taxes), but not the transfer payments. What increase is the amount of money that the person received or ..... ?

@ReviewEcon 3 года назад

Transfer payments are payments to citizens from the government, like social security, disability, welfare payment, and unemployment compensation. Welfare payments and unemployment compensation are automatic stabilizers. When we have a recession, more people are unemployed and more people qualify for public assistance. As a result, the government spends more money providing welfare payments and unemployment compensation during recessions.

@ReviewEcon 3 года назад

So more people getting paid from the government when there is a recession means more total money spent automatically.

@katherinewang6230 3 года назад

Got it. so it means that the government spent more during the recession gap (increasing its payments), but would that mean there should be an increase during expansions (your notes said decrease during expansions)? because expansion policy is used to fix the recession gap. Thank you for much for helping me, hope that won't bother you and my questions may seem stupid.

@kimiisun1827 3 года назад

Super helpful!!

@ReviewEcon 3 года назад

Awesome! I'm glad you found it helpful!

@anniezhang347 Год назад

can you explain again why the tax multiplier is one less than the spending multiplier? 3:34 because isn't some of the money saved with the spending multiplier too, like when you saved .2 of your new 1000?

@ReviewEcon Год назад

Yes! When the government spends $1000, all of that spending is immediately counted in GDP (government purchases). When the government reduces taxes by $1000, that tax reduction is not immediately counted in GDP because there was no immediate spending. The first spending with a tax decrease will be by consumers minus any savings (with an MPC of .8 it would be $800). That same amount is the second round of spending with an increase in government spending. As a result tax decreases have a smaller multiplier than spending increases (by a factor of 1). On the AP macro exam, the rubrics explain it as something like "when taxes are decreased, some of the decrease is saved rather than spent."

@louis7428 Год назад

11:53 Do wages rise as in, "real" wages? How/Why do they rise?

@ReviewEcon Год назад

It's actually nominal wages that rise (real may or may not rise depending on how much inflation there is when SRAS shifts left). They rise because people are being overworked when we have an inflationary gap. Workers without jobs are few and employers are having a tough time finding workers. Workers therefore have power to demand higher wages for their extra work and those higher wages cause the leftward shift of the short run aggregate supply curve.

@akhilkaturi7937 3 года назад

You made a mistake. When you gave examples about Positive SRAS shocks and Negative SRAS shocks, you said the examples were when there was a sudden decrease in oil prices. Which one assumes an increase in oil prices and which one assumes a decrease? Somewhere around 10:57

@ReviewEcon 3 года назад

Good catch! I'll have to fix that and upload a new version (might take a bit though). It should be an increase in oil prices cause a negative SRAS shock (leftward shift) and a decrease in oil prices cause a positive SRAS shock (rightward shift). Thank you!

@akhilkaturi7937 3 года назад

@@ReviewEcon Awesome thanks! Great video though keep up the good work!

@ReviewEcon 3 года назад

It will be a bit before I have time to re-record, so I edited my error out. Somewhat awkward cut, but at least I won't lead students astray. Thanks again!

@andrewsuh1019 3 месяца назад

Hi, I have a question. For a negative supply shock, wouldn't that be caused by an increase in oil prices as it makes producing more expensive?

@rael5333 3 месяца назад

correct

@ReviewEcon 3 месяца назад

I'll have to check and see if I mispoke. If I did, you are correct. Oil prices fall is a rightward SRAS shift, oil prices rise is a leftward SRAS shift.

@user-sh1iy9xq5g 5 месяцев назад

is SRAS and LRAS same as IS and LM curves?

@ReviewEcon 5 месяцев назад

They are not. IS/LM is a different model and one that is not covered by the AP Macro exam or CLEP macro exam (the focus of this channel). There are a lot of videos about IS/LM on RU-vid though. Here is one of them ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-7OXZnEGHV5I.htmlsi=GITuGahpkhWF6osm Good luck!