AP Macroeconomics FRQ discussion/answers!

[WorriedJunior10]

<p>Motion, I agree with every single answer you have and also don’t see any correlation with exports and imports for 3(d). It’s nice to know that we both beasted the FRQ’s. And yes, 1(c) was worded weirdly but it’s a fundamental concept of Macro that the LRAS wouldn’t shift to the R unless there’s significant technological advancement or something like that. (AD never shifts LRAS to the left or right.)</p>

[MED_VIRID]

<p>Anyone knows the answer to 2010 Form B 1/e?</p>

<p>Assume that the economy produces only two goods: military goods and civilian goods. Using a correctly labeled production possibilities curve, show the effect of the increase in military expenditures (AD increases, Price level and quantity of output increases), labeling the initial point as C and the new point as D.</p>

[Custardapple101]

<p>Hey guys, I want to take a ap macroeconomics class this year online. have any advice? Is it easy or hard?</p>

[aloser]

<p>Eh! Dang it! I totally messed up on number 3. I thought it asked you about Argentina’s AD for US dollars and i was so confused.</p>

[ryancj11]

<p>I did so much better than I thought I did. Thanks for posting this.</p>

[antonioray]

<p>

BTW, for 3c, I drew my graph with Pesos on the X-axis and Dollars/Pesos on the Y-axis.</p>

<p>I did it like that because decreased American investment in Argentina decreases the demand for Pesos, so the demand curve for Pesos will shift left, which makes it more fitting to have Pesos (oh donkey-brains I put Pesos instead of quantity of Pesos demanded; I could be wrong either way) on the X-axis.</p>

<p>However, I did get that the supply of US Dollars will decrease because Americans will need and want fewer US Dollars to trade in for Pesos. And for part ii of 3c, I just said that because the demand for Pesos has gone down, it will depreciate relative to the dollar.

</p>

<p>Can somebody tell me whether I’m absolutely wrong on that one?</p>

[jax90291]

<p>antonioray, im 99% sure they wanted you to draw an exchange market graph of the US dollar, not the peso. that way you could show the supply curve shifting left (edit: obviously appreciating the relative value of the dollar): as US demands less pesos, the supply of dollars brought to the exchange market decreases. they wanted you to be able to extrapolate a “foreign” situation and “localize” it per se to our own currency. im not sure if they will accept your graph.</p>

<p>widly05, for 1d your answer is also correct. i saw a grading rubric for a nearly identical question from a few years ago and it is acceptable to have the supply of LF decreasing or the demand for LF increasing. if you take another look at the crowding out effect, you will see that both of these things occur, so both graphs work.</p>

[ryancj11]

<p>I agree with jax90291. I drew just for the dollar so that supply would shift.</p>