Automatic stabilizers are a type of fiscal policy that is already in place to offset the fluctuations of economic activity in our economy.  These include things like unemployment benefits, welfare, and progressive income taxes.

Automatic stabilizers are typically used to counter the effects of negative supply shocks or recessions.  For example, if an economy falls into a recession we see an increase in unemployment benefits being given to help get the economy moving again and spending money which will ultimately cause an increase in aggregate demand.

Automatic Stabilizers

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AP Macro Exam Prep 2021 | Reviews + Free Study Help | Fiveable

AP Macroeconomics

Build a solid foundation in unit 1 of AP Macroeconomics. Our resources go over the important vocabulary, fundamental skills, and basic economic concepts you'll need to master for the exam, such as supply, demand, and market equilibrium. Review and practice with these helpful study guides, so you'll be prepared to conquer the test!

Unit 1: Basic Economic Concepts

Don't miss out on these useful resources for unit 2 of AP Macroeconomics: Economic Indicators and the Business Cycle! We go over the important vocabulary, skills, and concepts you need to know for the exam. Review and practice GDP, inflation, and unemployment!

Unit 2: Economic Indicators and the Business Cycle

Take advantage of our useful resources for National Income and Price Determination in AP Macroeconomics. Explore all the important vocabulary, skills, and concepts you need to master. Review aggregate supply and demand, multipliers, and equilibrium and master AP Macro unit 3!

Unit 3: National Income and Price Determination

Get ready to conquer the financial sector in AP Macroeconomics. We cover the important vocabulary, skills, and concepts you need to master to do well on the exam. Learn all about interest rates, the money market, and monetary policy with our amazing Macro unit 4 guides.

Unit 4: Financial Sector

Master the long-run effects of stabilization policies in our AP Macro unit 5 guides, and learn all about growth, debt, inflation, and the Philips curve. Review and practice with us, so you'll be prepared to rock the test!

Unit 5: Long-Run Consequences of Stabilization Policies

Finish out AP Macro: Open Economy—International Trade and Finance. We cover the vocabulary, skills, and concepts you need to master. Our helpful study guides and resources will go over all you need to know about foreign exchange market, rates, and policies to be ready for unit 6!

Unit 6: Open Economy-International Trade and Finance

Frequently Asked Questions

Learn all about the AP Macroeconomics exam! Learn how to manage the multiple choice questions (MCQs) and how to write great FRQs. Brush up on exam logistics, types of questions, how to draw graphs, helpful tips, sample questions, and practice prompts, With these useful strategies and practice, you'll be prepared to knock the exam out of the park!

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AP Macroeconomics Exam Guide

Your guide to the 2021 AP Macroeconomics exam

Format of the 2021 AP AP Macroeconomics exam

When is the 2021 AP Macroeconomics exam and how do I take it?

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Pre-work: set up your study environment

AP Macroeconomics 2021 Study Plan

💸 Unit 1: Basic Economic Concepts 

📈 Unit 2: Economic Indicators and the Business Cycle

💲 Unit 3: National Income and Price Determination

💰 Unit 4: Financial Sector 

⚖️ Unit 5: Long-run Consequences of Stabilization Policies 

🏗  Unit 6: Open Economy- International Trade and Finance 

2021 AP Macroeconomics Exam Guide

Microeconomics vs. Macroeconomics

Factors of Production

Opportunity Costs and Trade-offs

Production Possibilities

Scarcity

Introduction to the Production Possibilities Curve (PPC)

Opportunity Cost and the Production Possibilities Curve (PPC)

Key Terms

Introduction

Output Problems

Determining Absolute Advantage

Determining Comparative Advantage

 Terms of Trade

Comparative Advantage and Trade

Definition of Demand

Demand vs. Quantity Demanded

Law of Demand

Determinants of Demand

Demand

Definition of Supply

Quantity Supplied vs. Supply

Law of Supply

Determinants of Supply

Supply

Market Equilibrium

Market Disequilbrium  

Changes in Market Equilibrium

Market Equilibrium, Disequilibrium, and Changes in Equilibrium

2.0: Intro to Unit 2


Economic Indicators and the Business Cycle

Intro to Unit 2

2.1: The Circular Flow and GDP

Circular Flow

GDP (Gross Domestic Product)

Components of GDP 

Circular Flow and GDP

2.2: Limitations of GDP

1. Population

2. Inequality

3. Environment

4. Shadow Economy

Limitations of GDP

2.3: Unemployment

Vocabulary: 

Calculating the Unemployment Rate

Types of Unemployment

Unemployment

2.4: Price Indices and Inflation

Vocabulary

How to Calculate the CPI

Price Indices and Inflation

2.5: Costs of Inflation

Costs of Inflation

2.6: Real vs. Nominal GDP

How to Calculate (sample problem)

GDP Deflator

Real vs Nominal GDP

2.7: Business Cycles

Business Cycle Diagram

Business Cycles

Production, Cost, and the Perfect Competition Model (22%-25%)

Unit 3 - National Income and Price Determination

3.1: Aggregate Demand

Aggregate Demand

3.2: Multipliers

multipliers

3.3: Short-Run Aggregate Supply (SRAS)

Short-Run Aggregate Supply (SRAS)

3.4: Long-Run Aggregate Supply (LRAS)

Long-Run Aggregate Supply (LRAS)

3.5: Equilibrium in Aggregate Demand-Aggregate Supply (AD-AS) Model

Equilibrium in Aggregate Demand-Aggregate Supply (AD-AS) Model

3.6: Changes in the AD-AS Model in the Short Run

Changes in the AD-AS Model in the Short Run

3.7: Long-Run Self-Adjustment

Long-Run Self-Adjustment

3.8: Fiscal Policy

Fiscal Policy

3.9: Automatic Stabilizers

Key Vocabulary

Bonds and Interest Rates

Financial Assets 💰

Interest Rates

Chart

Nominal vs. Real Interest Rates

Functions of Money

Measurements of the Money Supply

Definition, Measurement, and Functions of Money

Fractional Reserve Banking

Money Multiplier

Bank Balance Sheets

Practice Free Response Question (FRQ) - 2016 # 2

Banking and the Expansion of the Money Supply

The Demand For Money

The Money Market

Types of Monetary Policy


Tools of Monetary Policy

Effects of Monetary Policy

Recessionary Gap to Full Equilibrium via Expansionary Monetary Policy

Inflationary Gap to Full Equilibrium via Contractionary Monetary Policy

Monetary Policy

Demand of Loanable Funds


Shifters for the Demand Loanable Funds

Supply of Loanable Funds

Determinants for the Supply of Loanable Funds 

Loanable Funds Market

The Loanable Funds Market

Intro to Unit 5

Long-Run Consequences of Stabilization Policies

Unit 5 Overview: Long-Run Consequences of Stabilization Policies

5.1: Fiscal and Monetary Policy Actions in the Short-Run

Fiscal and Monetary Policy Actions in the Short-Run

5.2: The Phillips Curve

The Phillips Curve

5.3: Money Growth and Inflation

Money Growth and Inflation

5.4: Deficits and the National Debt

Deficits and the National Debt

5.5: Crowding Out

Crowding Out

5.6: Economic Growth

Economic Growth

5.7: Public Policy and Economic Growth

Public Policy and Economic Growth

6.0: Intro to Unit 6

Open Economy - International Trade and Finance

Intro to Unit 6

Unit 6: Open-Economy - International Trade and Finance

6.1: Balance of Payments Accounts

Balance of Payments Accounts

6.2: Exchange Rates

Exchange Rates

6.3: Foreign Exchange Market

Foreign Exchange Market

6.4: Effect of Changes in Policies and Economic Conditions on the Foreign Exchange Market

Change in Demand or Supply in Currency

Fiscal Policy Impact on Exchange Rates

Effect of Changes in Policies & Economic Conditions on the Foreign Exchange Market

6.5: Changes in the Foreign Exchange Market and Net Exports

Changes in the Foreign Exchange Market and Net Exports

Jeanne Stansak

AP Micro Exam Prep 2021 | Reviews + Free Study Help | Fiveable

AP Microeconomics

Build a strong foundation in unit 1 of AP Microeconomics. We cover the important vocabulary, fundamental skills, and basic economic concepts you need to master for the exam, such as the production possibilities curve (aka the PPC). Review and practice with our signature helpful study guides and useful resources.

Unit 1: Basic Economic Concepts 

Master supply and demand in these Unit 2 AP Micro resources. We cover the important vocabulary, skills, and concepts you need to understand for the exam. You'll review elasticity, market equilibrium, and policy. With these useful resources and practice, you'll feel confident and prepared to conquer the test!

Unit 2: Supply and Demand

Don't miss out on these useful resources for production, cost, and the perfecet competition model. We cover the important vocabulary, skills, and concepts you need to understand and master for the exam. With these helpful study guides, resources, and practice, you'll feel confident and prepared to ace unit 3 of AP Micro!

Unit 3: Production, Cost, and the Perfect Competition Model

Get ready to conquer unit 4 of AP Microeconomics—imperfect competition! Brush up on vocab and concepts relating to monopolies, price discrimination, oligopolies, and game theory, to clear up any weak spots you may have!

Unit 4: Imperfect Competition

Check out these resources for factor markets for unit 5 of AP Microeconomics with guides reviewing vocab and key concepts! Review everything from factor supply and demand and profit-maximizing to monopsony markets.

Unit 5: Factor Markets

Wrap up your AP Micro studies with unit 6—market failure and role of government! We cover the important vocabulary, skills, and concepts you need to understand and master. With these helpful study guides, useful resources, and practice all about the markets and how government affects them, you'll be prepared to conquer the exam!

Unit 6: Market Failure and Role of Government

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3.9 Automatic Stabilizers

AP Macroeconomics 🤑

3.9: Automatic Stabilizers

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