07.04.08
AP Scores
Congratulations to my students for doing well on the AP Macro exam.
I’ve heard from several of you and and very happy that your hard work has paid off
Enjoy the Summer!
04.28.08
AP Economics Study Guides
Check out Jason Welker’s Wikinomics study guide page for both the Macro and Micro exams.
04.17.08
Capital Flow Chart
|
Interest Rate |
Capital Flows |
Demand for Currency |
Value of Currency |
Imports |
Exports |
|
↑
|
In |
↑ |
Appreciates |
↑ |
↓ |
|
↓
|
Out |
↓ |
Depreciates |
↓ |
↑ |
Remember, This chart does not work for Capital Flight or Trade Barrier Scenarios
What happens when Interest Rates Change
Here’s the written explanation for the Capital Flow Table:
Scenario I: Increasing Interest Rates.
As Interest Rates rise in the United States, Capital Flows In to the country because the higher interest rates are an incentive for foreign capital. As capital flow in to the nation, the Demand for the Dollar Increases, as demand for the dollar increases, the Value of the Dollar Appreciates. When the dollar appreciates, goods made in the United States appear more costly to domestic and foreign consumers. Therefore, Imports Increase while Exports Decrease.
Scenario II: Decreasing Interest Rates.
As Interest Rates fall in the United States, Capital Flows Out of the country because the lower interest rates are a disincentive for foreign and domestic capital. As capital flow out of the nation, the Demand for the Dollar Decreases, as demand for the dollar decreases, the Value of the Dollar Depreciates. When the dollar depreciates, goods made in the United States appear less expensive to domestic and foreign consumers. Therefore, Imports Decrease while Exports Increase.
03.04.08
AP Exam Registration
As you know AP exam registration must be completed by early next week. If you are interested in taking the Micro Exam, please see me to discuss. Because there is no check box on your registration sheets for the Micro Exam, you have to write it in on the bottom of the exam.
For those interested in the Micro exam, here is a chapter study guide to help you figure what you’ll need to read. In addition, here is a topic guide to help you understand what you’ll need to know.
P.S. To all of you who do not know whether you are taking micro or macro…figure it out.
