Official AP MACRO Economics Discussion 2011

Well your teacher is an idiot then. 2/10 is .2</p>

Hypothetically of course, if the reserve rate was actually .1 what would the other answers be?</p>

Apparently, you only add up the assets, and not include the liabilities? Someone mentioned it on here before.</p>

And also, hypothetically speaking, what would happen to the natural rate of unemployment in the long run with an expansionary policy? This is all hypothetical ofcourse…</p>

Wrong…</p>

Natural rate of unemployment almost never changes. The only thing that might change it is unemployment benefits.</p>

Lmao Duh…
But I would get partial credit if they were correctly corresponded to the reserve rate.</p>

MC was pretty easy compared to a practice test that I took this morning. But don’t even get me started on that FRQ, man… I am SOOO thankful for number 3. Number 2 I skipped… I was not prepared AT ALL for graphing.</p>

Can somebody explain why the RRR would be 20%? Wasn’t it $2,000/$20,000=10%?</p>

i thought number two was the easiest one, the last couple of questions in number 1 sucked though</p>

10,000 dollars were deposits and 10,000 were equity. Equity means stuff the bank owns, like the building, the computers used, bonds, etc. Since it can’t loan out it’s building, or bonds (which aren’t money), equity is not loanable. Reserve rate is only about loanable funds. So it’s only demand deposits.</p>

To find reserve ratio you only need to compare the Checkable deposits with the required reserves.</p>

Take a look at this completely hypothetical situation:</p>

A bank is empty.
You deposit 10000USD into the bank.
Now, the bank has 2000USD in its required reserves.</p>

That must mean that the reserve ratio is 20% or .2, because the bank kept 2000 of the 10000 you deposited. Ignore anything else in the table to find the reserve ratio.</p>

Just out of curiosity, is the study of economics how people deal with money or scarcity? or neither?</p>

@kellian: Scarcity.</p>

If we used the wrong RRR but did the calculations later on in the problem correctly using that figure, do we still get partial credit?</p>

Yeah same question as AlaskanDebater44, will we still get some credit?</p>

@leadlol: thanks</p>

Yes, I believe the AP readers will follow your reasoning and award you partial credit.</p>

Yes, you guys do get credit if you make a mistake but continue on with it!</p>

I think its possible to even get like 6/7 points assuming you did everything in the right manner even though your initial statement was incorrect. As long as you keep going with it.</p>

I’m not so sure about number 2, because frictionally unemployed would mean that someone was in between jobs, and the girl was not in between jobs. I would think, hypothetically, that the answer would evoke a man, maybe who couldn’t find a job in his field of work? Therefore, he’d have to move on to a different field? (In between jobs)</p>

Wiki </p>

“New entrants (such as graduating students) and re-entrants (such as former homemakers) can also suffer a spell of frictional unemployment.”</p>