IES: International Economic Summit

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We organized ourselves into groups for the IES simulation. The International Economic Summit (IES) is a world trade simulation which teaches fundamental economic concepts within the context of international trade. Students will work in teams as virtual “Economic Advisors” to an assigned country and create a strategic plan to improve living standards for their population.

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Econ: Globalization

What-is-globalization_benefits     Globalization is the integration of economies and societies around the world. Critics emphasize its costs, while supporters point to its benefits. There are four main groups play key roles in globalization. The first is international organizations such as the World Bank, the International Monetary Fund, World Trade Organization, and the United Nations. The second group is nongovernmental organizations such as the World Wildlife Fund and Free the Children. The third group is represented by multinational corporations such as McDonald’s and Exxon/Mobile. The final group is made up of sovereign nation-states.

For many developing countries, globalization has been the key to growing their economies and raising living standards. However, some of the world’s less-developed countries have failed to experience such economic gains. Although globalization is not the root cause of most environmental problems, it may contribute to them by encouraging industrialization. However, as countries develop, they also begin to do more to protect the environment. Globalization may help solve problems like climate change by promoting international cooperation. Globalization brings cultures together in ways never experienced before. In some cases, the flood of Western products and ideas may crowd out local traditions and customs. At the same time, globalization enriches cultures by introducing new ideas, technologies, foods, and arts that can be adapted for local use and enjoyment.

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AP Macro: Exam Review and Prep

Studying3

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Econ and AP Macro: 12-week Progress Report

Progress-Report

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AP Macro: Key Macroeconomic Formulas to Know

  1. GDP = C + I + G + Xn: The expenditure approach to measuring GDP
  2. GDP = R + I + P + SA + W: The income approach to measuring GDP
  3. Calculating nominal GDP: The quantity of various goods produced in a nation times their current prices, added together.
  4. GDP deflator: A price index used to adjust nominal GDP to arrive at real GDP. Called the ‘deflator’ because nominal GDP will usually over-state the value of a nation’s output if there has been inflation.
  5. Real GDP = (nominal GDP/ GDP deflator) x 100
  6. GDP Growth rate = [(current GDP – last year GDP)/last year GDP] x 100
  7. The inflation rate via the CPI = [(current CPI – last year CPI)/last year CPI] x 100
  8. Real interest rate = nominal interest rate – inflation rate.
  9. Unemployment Rate = (# of unemployed/# of labor force) x 100
  10. Money Multiplier = 1/required reserve ratio
  11. Quantity theory of money: MV = PY – a moneterist’s view which explains how changes in the money supply will affect the price level assuming the velocity of money and the level of output are fixed.
  12. MPC + MPS = 1. Households may consume or save with any change in their income.
  13. Spending Multiplier = 1/(1 – MPC) or 1/MPS
  14. Tax multiplier = -MPC/MPS. It tells you how much total spending will result from an initial change in the level of taxation. It is negative because when taxes decrease, spending increases, and vice versa. The tax multiplier will always be smaller than the spending multiplier.

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Econ: IACs Role

Advanced nations can encourage development in the DVCs by reducing IAC trade barriers and by directing foreign aid (official development assistance) to the neediest nations, providing debt forgiveness to the poorest DVCs, allowing temporary low-skilled immigration from the DVCs, and discouraging arms sales to the DVCs. Critics of foreign aid, however, say that it (a) creates DVC dependency, (b) contributes to the growth of bureaucracies and centralized economic control, and (c) is rendered ineffective by corruption and mismanagement.

In recent years the IACs have reduced foreign aid to the DVCs but have increased direct investment and other private capital flows to the DVCs. Little of the foreign direct investment, however, has gone to the poorest DVCs. Also, foreign direct investment plummeted during the worldwide recession of 2007–2009.

Christiane Amanpour traveled to Kenya as part of a special documentary “Where Have All the Parents Gone,” which looks at the millions of AIDS orphans now living on their own. The film focuses on the impact of the AIDS epidemic on children in Africa and includes a visit to AID Village Clinics.

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AP Macro: Macroeconomic Graphs to Know

1. Production Possibilities Curve
a. Absolute Advantage
b. Comparative Advantage
c. Terms of Trade

2. Circular Flow

3. Business Cycle
a. Peak
b. Trough
c. Recession / Contraction
d. Recovery/Expansion

4. Supply and Demand
a. Surplus and Shortage
b. Price Floor and Price Ceiling

5. Aggregate Demand-Aggregate Supply
a. Full Employment
b. Recession
c. Demand-Pull Inflation
d. Cost-Push Inflation

6. Investment Demand

7. Money Market

8. Loanable Funds

9. Currency Market
a. Currency Appreciation
b. Currency Depreciation

10. Phillips Curve
a. Stagflation

11. Balance of Payments
a. Current Account
b. Capital Account
c. trade deficit / trade surplus

12. Bank Balance Sheet

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