AP Macro – 2/28/2020
I. Bellwork
A. Create a graph demonstrating cost-push inflation. Show the change in price level
B. Create a graph demonstrating demand-pull inflation. Show the change in price level
II. Objectives:
- Use the Phillips curve to show the nature of the short-run trade-off between inflation and unemployment
- Explain why there is no long-run trade-off between inflation and unemployment
- Discuss why expansionary policies are limited due to the effects of expected inflation
- Identify the problems with deflation that lead policy makers to prefer a low but positive inflation rate.
III. Discussion: P328-336
A. Introduction to the Phillips Curve
1. The Short-Run Phillips Curve
2. Inflation Expectations and the Short – Run Phillips Curve
B Inflation and Unemployment in the Long Run
1. The Long-Run Phillips Curve
2. The Natural Rate of Unemployment, Revisited
3. The Costs of Disinflation
C. Deflation
1. Debt Deflation
2. Effects of Expected Deflation
IV Notes:
- Relationship btw AD, Unemployment & Inflation
- Relationship btw AS, Unemployment & Inflation
- Copy SRPC & LRPC – video
V. Video Resources
VI. Classwork/Homework
- 34.1, 34.2 , 34.3 WS
- 5.2 A & 5.2B Phillips Curve
Leave a Reply