All Graphs and Shifters AP Macroeconomics

Supply/Demand Curve

• Price Level on Y-axis

• Real GDP on X-axis

Shifters of Supply Curve

• Prices/Availability of Inputs (Resources)

• Number of Producers

• Technology

• Government Action: Taxes & Subsidies

• Expectations of Future Profit

Shifters of Demand Curve

• Tastes and Preferences

• Number of Consumers

• Price of Related Goods (Substitutes and Complements)

• Income

• Future Expectations

Double Shift Rule

If TWO curves shift at the same time, EITHER price or quantity will be indeterminate.

Aggregate Demand/Supply Curve

• Price Level on Y-axis

• Real GDP on X-axis

Shifters of Aggregate Demand

• Consumer Spending

• Investment Spending

• Government Spending

• Net Exports (Exports - Imports)

Shifters of Aggregate Supply

• Resource Prices

• Actions of the Government (Taxes, Regulations)

• Productivity

Money Market Graph

• Nominal Interest Rate on the Y-axis

• Quantity of Money on the X-axis

Shifters of Money Demand

• Changes in price level - Inflation requires consumer to hold more cash for financial transactions

• Changes income - Sustained economic growth in the economy leads to an increase in the demand for money

• Changes in taxation that affects personal investment - Government policies such as changing the capital gains tax would change the demand for money.

Shifters of Money Supply

• Reserve ratio - the percent of deposits that banks must hold in reserve

  • To increase money supply, decrease the reserve ratio

  • To decrease money supply, increase the reserve ratio

• Discount Rate - the interest rate that the FED charges commercial banks

  • To increase money supply, decrease the discount rate

  • To decrease money supply increase the discount rate

• Open Market Operations - when the FED buys or sells government bonds (securities)

  • To increase money supply, the FED buys bonds

  • To decrease money supply, the FED sells bonds