No Bull Economics Lessons

Macroeconomics & Microeconomics Concepts You Must Know

Essential Questions

What is the Phillips curve?

Posted on April 14, 2014 at 5:40 PM Comments comments (0)

The short-run Phillips curve is a downward sloping curve that shows the inverse relationship between inflation and unemployment. Inflation is on the Y-axis and unemployment is on the X-axis. When aggregate demand shifts to the right, inflation increases and unemployment falls. This means that the economy moves point-to-point leftward along the short-run Phillips curve.


In the long run, there is no tradeoff between inflation and unemployment. The long-run Phillips curve is vertical at the natural rate of unemployment (or the NAIRU).


AP Macroeconomics Unit 5 Macroeconomic Theory

What is the federal funds rate?

Posted on April 14, 2014 at 5:35 PM Comments comments (0)

The federal funds rate is an interest rate that the Federal Reserve (the central bank) targets through open market operations. The Federal Open Market Committee meets every six weeks to determine the federal funds rate. Traditionally, when the Fed lowers the federal funds rate, money supply increases, interest rates fall, investment and consumption increase, aggregate demand increases, real GDP increases, price level increases, and unemployment falls.


AP Macroeconomics Unit 4 Monetary Policy

What is fiscal policy?

Posted on April 14, 2014 at 5:30 PM Comments comments (0)

Fiscal policy consists of government action which seeks to shift aggregate demand (and sometimes aggregate supply) to bring about full employment. The government does this primarily through changing its levels of spending and taxes.


AP Macroeconomics Unit 3 AD/AS & Fiscal Policy

What is included in the gross domestic product?

Posted on April 14, 2014 at 5:25 PM Comments comments (0)

The four components to a nation's gross domestic product are consumption, gross investment, government spending, and net exports. The GDP accounts for production within a country's borders in one year.


The No Bull Review video below shows you what types of goods are included and excluded from a country's gross domestic product

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AP Macroeconomics Unit 2 Measuring Economic Performance

What is the circular flow model?

Posted on April 14, 2014 at 5:20 PM Comments comments (0)

The circular flow model is a system of incentives that shows how businesses and households interact through product markets and resource markets.


This No Bull Review video shows you how to draw the circular flow model correctly

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AP Macroeconomics Unit 2 Measuring Economic Performance

How do you determine whether a country benefits from trade?

Posted on April 14, 2014 at 5:15 PM Comments comments (0)

If you are deciding whether countries should specialize and trade, then you must use the law of comparative advantage (AKA the Ricardian Model). First establish which country will be exporting which good. To do this, simple look at which country has the lower opportunity cost in producing the good. The country with the lowest opportunity cost will specialize in that good and export that good.


To determine if the trade terms are beneficial, do the following: Imports divided by Exports


If the Imports / Exports are > than the opportunity cost of the country's export then it is a good trade for that country.


You must do the same thing for the other country since it is exporting the other good if it has a comparative advantage in the production of the other good.


This No Bull Review video explains it the best!

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AP Macroeconomics Unit 1 Basic Economic Concepts

What are the shift factors of supply?

Posted on April 14, 2014 at 5:10 PM Comments comments (0)

A change in any of the following will cause the supply curve to shift to the right or to the left:


1. Resource prices

2. Alternative output price changes

3. Technology and productivity

4. Number of sellers

5. Expectations of future prices

6. Subsidies to producers

7. Taxes on production


See the No Bull Review video for more information on these shift factors of supply

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AP Macroeconomics / AP Microeconomics Unit 1 Basic Economic Concepts

What are the shift factors of demand?

Posted on April 14, 2014 at 5:00 PM Comments comments (0)

The demand curve will shift if there is a change in the determinants of demand. Here are the shift factors of demand:


1. Tastes and preferences

2. Income of buyers

3. Number of buyers

4. Expectations of prices in the future

5. Substitute good prices

6. Complementary good price


Watch the No Bull Review video below for more information on shifting demand:

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AP Macroeconomics / AP Microecnomics Unit 1 Basic Economic Concepts

What graphs do I need to know for the AP Macroeconomics exam?

Posted on April 14, 2014 at 4:55 PM Comments comments (0)

If you are taking the AP Macroeconomics exam in May then you should know the following graphs and models well.


1. Production Possibilities Curve

2. Supply and Demand

3. AD/AS Model

4. Money Market

5. Loanable Funds Market

6. Phillips Curve

7. Foreign Exchange Market


The No Bull Review video below illustrates all of the models listed above. You can pause the video to get a closer look at each of the majot graphs.

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AP Macroeconomics Exam Review

How do you calculate the unemployment rate?

Posted on April 14, 2014 at 4:20 PM Comments comments (0)

The unemployment rate measures the percentage of people in the labor force that are actively looking for employment.


To calculate the rate of unemoployment, take the number of people that are unemployed and looking for work and divide by the number of people that are working plus the number of people looking for work.


Unemployment Rate = Quantity of people unemployed / Quantity of people in the labor force


Watch the No Bull Review video below for more information:

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AP Macroeconomics Unit 2 Measuring Economic Performance

Mr. Medico Joins "The Takeaway," a National Morning Radio Show

Posted on April 9, 2010 at 6:50 AM Comments comments (2)

AP Economics Students: Hey! I was a guest on a radio show called "The Takeaway" this morning explaining the basics of the foreign exchange market and how it relates to China's expected change on currency policy. http://www.thetakeaway.org/2010/apr/09/the-yuan-also-rises/


AP Macroeconomics Unit 6 International Trade

India: the largest economy in the year 2109?

Posted on November 19, 2009 at 8:15 PM Comments comments (0)

AP Economics Students: An interesting argument from monetary economist Scott Sumner that predicts the new economic leader 100 years from now.


AP Macroeconomics Unit 6 International Trade

What is the national debt?

Posted on November 11, 2009 at 3:10 PM Comments comments (0)

The U.S. National Debt is the amount of outstanding dollars owed by the United States in the form of marketable and non-marketable securities (bonds).


To view the national debt visit this site: http://www.usdebtclock.org/


AP Macroeconomics Unit 3 AD/AS & Fiscal Policy

Unemployment Breakdown

Posted on November 11, 2009 at 3:10 PM Comments comments (0)

AP Economics Students: Here is that interactive unemployment graph from the NY Times that I mentioned in class. Unfortunately, the computer in the classroom could not load it so we were unable to discuss in detail. http://www.nytimes.com/interactive/2009/11/06/business/economy/unemployment-lines.html