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Exam skills

Exam skills. 1. Fiscal policy versus monetary policy. Example 1. A. B. P. P. SRAS 0. SRAS. SRAS 1. AD 0. AD 0. AD 1. AD 1. Y. Y. 0. 0. C. D. P. P. LRAS 1. LRAS 0. LRAS 0. LRAS 1. AD 0. AD. AD 1. Y. Y. 0. 0.

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Exam skills

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  1. Exam skills 1 Fiscal policy versus monetary policy

  2. Example 1 A. B. P P SRAS0 SRAS SRAS1 AD0 AD0 AD1 AD1 Y Y 0 0 C. D. P P LRAS1 LRAS0 LRAS0 LRAS1 AD0 AD AD1 Y Y 0 0 Suppose the government raises income taxes and issues bonds at the same time. Which of the following can best illustrate the overall effects of the above changes on price and output levels?

  3. You should... 1. Study the questions carefully 2. List the relevant information you have 3. Choose your answer strategically

  4. 1. Study the questions carefully Hint: More than one policy Suppose the government raises income taxes and issues bonds at the same time. Which of the following can best illustrate the overall effects of the above changes on price and output levels?

  5. 1. Study the questions carefully • TWO policies • Raising income taxes • Issuing bonds Suppose the government raises income taxes and issues bonds at the same time. Which of the following can best illustrate the overall effects of the above changes on price and output levels?

  6. 2. List the relevant information you have Student A ONLY knows the following:  (Contractionary) Shiftsleftwards ? Shiftsleftwards  (Contractionary) ? Shiftsleftwards ?  Suppose the government raises income taxes and issues bonds at the same time. Which of the following can best illustrate the overall effects of the above changes on price and output levels?

  7. 3. Choose your answer strategically Strategy 1: Possible choice strategy a. Find the diagram(s) with a leftward shift in AD. b. Find the diagram with a decrease in Y. A. B. P P SRAS0 SRAS SRAS1 AD0 AD0 AD1 AD1 Y Y 0 0 C. D. P P LRAS1 LRAS0 LRAS0 LRAS1 AD0 AD AD1 Y Y 0 0 Suppose the government raises income taxes and issues bonds at the same time. Which of the following can best illustrate the overall effects of the above changes on price and output levels?

  8. 3. Choose your answer strategically Strategy 2: Elimination method Well done Can you choose the best answer now? Yes Yes Eliminate an option No No?! Eliminate an option Can you choose the best answer now? Eliminate an option No No Skip this question and try it later!

  9. 3. Choose your answer strategically Student B ONLY knows the following:  (Contractionary) ? Change  (Contractionary) ? Change ? Change  Suppose the government raises income taxes and issues bonds at the same time. Which of the following can best illustrate the overall effects of the above changes on price and output levels?

  10. 3. Choose your answer strategically AD must change. A. B. P P SRAS0 SRAS SRAS1 AD0 AD0 AD1 AD1 Y Y 0 0 C. D. P P LRAS1 LRAS0 LRAS0 LRAS1 AD0 AD AD1 Y Y 0 0 Suppose the government raises income taxes and issues bonds at the same time. Which of the following can best illustrate the overall effects of the above changes on price and output levels?

  11. 3. Choose your answer strategically Both are contractionary policies. Y must decrease. A. B. P P SRAS0 SRAS SRAS1 Option A is the answer. AD0 AD0 AD1 AD1 Y Y 0 0 C. D. P P LRAS1 LRAS0 LRAS0 LRAS1 AD0 AD AD1 Y Y 0 0 Suppose the government raises income taxes and issues bonds at the same time. Which of the following can best illustrate the overall effects of the above changes on price and output levels?

  12. More examples will be provided later.

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