Since there isn’t a single thread for it yet, I figured I’d start.</p>
Last minute stuff:
How are y’all studying? questions/clarifications/tips/study guides/cram packets/ pdfs to prep books, pooooost away! :)</p>
<p>Great site
[url=<a href=“http://www.reffonomics.com/TRB/INPROGRESS/Macroeconomics]Macroeconomics[/url”>http://www.reffonomics.com/TRB/INPROGRESS/Macroeconomics]Macroeconomics[/url</a>]</p>
<p>im aiming for at least a 4 wish me luck :D</p>
<p>Practice tests. We finished Macro about two weeks ago and I can’t believe how much I’ve already forgotten. How do interest rates translate onto the AD/AS model?</p>
<p>Interest rates → increased investment spending → increased AD</p>
<p>I can’t find it in my textbook, so I’ll ask: what’s the relationship between AD, bond (loanable funds) prices, and inflation? I know AD and inflation, but I don’t quite understand how the 3 work.</p>
<p>I’m not sure about bond prices, but if the supply of loanable funds increases -> interest rate decreases -> investment spending/durable goods consumption increases -> AD increases.</p>
<p>Don’t bond prices need to rise with inflation so that they remain constant? Or am I way off</p>
<p>At least 40% of the test is just finding the correct monetary and fiscal policies for expansion or contraction of the economy. If you know that well you’re pretty much golden.
Bond prices and interest rates are inversely related to each other. This is because if interest rates increase, bonds seem less desirable due to having less return, so demand for bonds goes down, which decreases bond price and quantity.
For example, if there is inflation, there is more money, so the supply of money increases, which lowers interest rates. This means that bond prices increase.</p>
<p>anyone who wants to cram macro - [wb1i3</a> - Tinychat](<a href=“Live video chat rooms, simple and easy. - Tinychat”>Live video chat rooms, simple and easy. - Tinychat)</p>
<p>^^ @Fastneutrino </p>
<p>I may be confusing myself, but don’t bonds become more desirable when interest rates increase? I thought that the interest rates for bonds were different than interest rates for investments (where people are borrowing money and lower interest rates means less money borrowers have to pay back). When buying bonds, they are supplying money which they hope to make money off of. If interest rates are high, borrowers will have to pay more money to bond owners, increasing the desire to own bonds.</p>
<p>Yeah, I must’ve confused interest rates and transaction money demand or something. I think it’s more that when transaction demand increases, interest rates happen to increase. The real relationship is that transaction demand and asset demand are inverse though. When you want more money to spend, you don’t want as much to save.
Although I guess, at this point, it’s not a big deal. =P</p>
<p>was this exam dreadful for anyone else today? ._.</p>
<p>I got so caught up on the very last FRQ letter… my brain must’ve been dead…</p>
<p>I messed up on one of the parts to the last frq, saying the real interest rate increased</p>
<p>but for the last part, the real interest rate was 5% right?</p>
<p>I got 5%, the real GDP thing was a distractor.</p>
<p>lol it was 5%? I COMPLETELY guessed. WOW GOOD STUFF</p>
<p>oh good xD
i lost a decent number of points on all frqs tho
and i already know of me missing 5 mult choice i actually remember
meaning like im forgetting about 55 others i prolly got wrong</p>
<p>Nooooooo, 
I put 2%. Sad day.</p>
<p>also, was did the euro demand increase or decrease? and its supply?</p>
<p>im pretty sure the U.S had a surplus though</p>
<p>I’m pretty sure the current account has a deficit because the euro appreciates. It costs more dollars to by the same amount of goods from the euro zone and we get less euros in return for our exports to the euro zone.</p>