<p>^Whatever, I am sick of analyzing one part. They will probably accept both if enough people put it down with good explanations. Either way its probably only one point out of 8 so I wouldn’t worry too much. Because we still get points for simply drawing the graph.</p>
<p>God dammit. My friends and I have been arguing since Thursday of whether demand shifts left or supply shifts left to question 2. I said that since investors make up demand, demand shifts left. I originally was going to put that supply shifts left because it said funds were being pulled out. </p>
<p>It just had to call them foreign INVESTORS, which is what made me pick demand. If it just said foreign entrepreneurs pulling out funds, it would have been clear that supply shifts left. I was just confused by their definitions. Believe me (not to be arrogant or anything), I got the highest grade in economics in my class, so me getting this question wrong is not from lack of economics knowledge or logic. Again, the question is worded vaguely.</p>
<p>But will I get points for 2c if I said the economy grows, because interest rate drops (which will occur if you shift demand right)? This connection is true, since we’ve discussed that increasing interest rates hurt the economy. But apparently if the right answer is supply if shifted left, then that means interest rate increases and economy slows.</p>
<p>I should get points in 2c because I used correct economics logic from my previous decreased interest rate answer.</p>
<p>
Those graphs are ridiculous. The supply of loanable funds is vertical? And only encompasses National Savings? The Demand for Credit is ONLY NCO and Domestic Investment? So the graph doesn’t account for individuals getting loans, governments taking out loans, or anyone getting loans in the market economy who are not firms with the intent of investment. And why is NCO part of the Demand?</p>
<p>As a side, none of this was actually needed to be learnt for AP Economics, Collegeboard does not include Net Capital Outflow and this zeroed-in analysis of international economics that disregards general equilibrium theorem in its syllabus for the course, and for the test. But anyway</p>
<p>
Ok so this isn’t something that my textbook taught me so I was second-guessing my conclusions to that Wikipedia article, so I had my dad (Econ Prof) take a look at the page. He got all cantankerous and said it was absolutely garbage and unreadable.</p>
<p>[Q]NCO increases, but domestic investment still decreases, so how does this equate to an increasing Demand curve? Seems to me according to this theory that the two will balance out and the net change will be zero.[/Q]</p>
<p>The definition of NCO and domestic investment, in this sense, are such that this will not be the case. </p>
<p>[Q]Wikipedia cites “the NCO graph has a negative slope as an increased interest rate domestically is an incentive for savers to do so at home rather than abroad.” But this seems more relevant to the Foreign Exchange Market and not the MLF. In the MLF, I thought the demand curve is set only by the fact that as interest rates increase domestic investors do not want to invest more because they also have to pay more.[/Q]</p>
<p>There are three graphs (loanable funds, NCO, and currency exchange) that are all interrelated; refer to the link in my second post for a depiction. </p>
<p>[Q]Those graphs are ridiculous. The supply of loanable funds is vertical? And only encompasses National Savings? The Demand for Credit is ONLY NCO and Domestic Investment? So the graph doesn’t account for individuals getting loans, governments taking out loans, or anyone getting loans in the market economy who are not firms with the intent of investment. And why is NCO part of the Demand?[/Q]</p>
<p>[Q]Ok so this isn’t something that my textbook taught me so I was second-guessing my conclusions to that Wikipedia article, so I had my dad (Econ Prof) take a look at the page. He got all cantankerous and said it was absolutely garbage and unreadable.[/Q]</p>
<p>Well had your textbook been written by Mankiw, you would have learned that, in an open market economy, the relationship is:</p>
<p>S = I + NCO</p>
<p>where S = National Savings, I = Domestic Investment, and NCO = Net Capital Outflow. </p>
<p>Furthermore:</p>
<p>NX = NCO</p>
<p>where NX = Net Exports.</p>
<p>These two equations are the foundations for the loanable funds market and currency exchange market, respectively, in an open market economy. Since equilibrium in a market is the point at which the supply and demand curves intersect, the curves themselves account for the variables in these relationships (S, I, NCO, and NX). As for the vertical supply curve in the market for loanable funds, I will apologize for that mistake. It is the only inconsistency between those graphs and the ones used in Mankiw. I didn’t read the full Wikipedia link, only the relevant portion that I quoted and which is supported by Mankiw. I take no responsibility for any of the other content on that page. However, as for the portion I did quote, it’s your dad versus Mankiw.</p>
<p>Can I get help on form B?
<a href=“Supporting Students from Day One to Exam Day – AP Central | College Board”>Supporting Students from Day One to Exam Day – AP Central | College Board;
<p>Thats the link to it, I would really appreciate the help. Thanks in advance.</p>
<p>Did anyone take the late test today? Did you find the first question ridiculously easy, if so?</p>
<p>So our class got the FRQ’s back today and we discussed them. On number 3, our teacher said the answers were 80, 400, 500 and 25 million…I, as well as others on CC, put 80, 500, and 400…</p>
<p>my teacher isn’t the brightest of teachers but apparently she had a “meeting” with all the econ teachers in the district to discuss it…</p>
<p>My teacher said it was $80, $500, $400, $25 for number 3 and that supply shifted left for number 2, which is fine with me since that’s what I put.</p>
<p>But… he also I think got number 1 part f wrong, (didn’t shift SRAS), so idk if its correct.</p>