Valeria+A

AP MacroeconomicsUnit 3 Entry 1 media type="youtube" key="hTWPrWmPJS0" height="315" width="420" So I found this video which explains how RGDP, AD and AS work and form the macroeconomic model. We look at the aggregate demand of all products and services and the aggregate supply of all goods and services and that help us understand how economy works in a bigger scene. It is interesting how it explains what can cause shifts in the curves like a change in government spending and movements like a change in the price level. I really think it's amazing to understand how economy works and how prices can change depending in the shifts in aggregate demand and supply and ow many things are involved in the changes. 8/10 Good find. Could you provide some more of your own observations and understandings? Entry 2   The comic above shows inflation and how money (in this case wages) lose their real value. The bulls represent the different costs of living like housing, gasoline among others. There are different types of inflation according to the keynesian economic theoriy: the first one is the **demand-pulled inflation ** which is caused by an increase in the aggregate demand (CIGNX) for example an increase in government spending or inversion, which put more money in the market and shift the AD curve. The second type is the **cost-push inflation **which is caused by a decrease in the short run aggregate supply, which would shift the SRAS to the left, like for example a change in production costs like taxes or an increase in the price of gas and the last one is **built-in inflation** which is caused by adaptive expectations, it originates from either persistent demand-pull or large supply push inflation in the past. It then becomes a "normal" aspect of the economy, it causes a spiral between wages and inflation, in which wages are supposed to outrage inflation wages and the other way around. 10/10 Yes, and what will happen to "real" wages according to the cartoon? Good stuff.

AP Macroeconomics Unit 2 02/13/2012

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So I found this video that explains **externalities** because I couldn't understand externality's relationship between social cost and other terms. In the video it is explained that the p**rivate cost addition to the public cost** of an action are called **social cost.** There is also **private benefits** and **social benefits** depending of how the externality works.

<span style="color: #0b9eea; font-family: Tahoma,Geneva,sans-serif; font-size: 110%;">So externalities occur when costs or benefits are given to a person or persons (enterprises, etc) that are not envolved in the decision making process. An externality is produced when there is an action that affect the market from the outside.They use the example of someone driving and answering their cellphone to show the difference between **negative and possitive externalities**. Negative externalities affect the supply moving it up, causing a deadweightloss and an incrementation in the price of the products, which affect the consumer, while positive externalities shift the demand, helping the producer and the consumer.

<span style="color: #0b9eea; font-family: Tahoma,Geneva,sans-serif; font-size: 110%;">I found this example very useful and easy to comprehend, I hope you like it. <span style="color: #ff0000; font-family: Tahoma,Geneva,sans-serif; font-size: 110%;">Yes, good stuff. Can you provide more examples from your life? Where do you see some examples of each? 8/10 -SW

<span style="color: #860cc6; display: block; font-family: tahoma,geneva,sans-serif; font-size: 14px; text-align: center;">**AP Macroeconomics****Unit 1****02/02/2012** media type="youtube" key="38hvvAzgXZY" height="315" width="420" align="center"

<span style="color: #d100d1; font-family: Arial,Helvetica,sans-serif; font-size: 110%;">So I found this video, in which it is explained how **comparative advantage** works in a simplified way. The example using Gilligan's Island is useful to understand how trade between different nations and enterpreurs is more effective than an individual economy because of the production possibility frontier. <span style="color: #d100d1; font-family: Arial,Helvetica,sans-serif; font-size: 110%;">The **opportunity cost** for Skipper in fish is smaller than Gilligan's and the **opportunity cost** for Gilligan in shelters, when both specialize the advantage is greater for all the inhabitants of the island.

<span style="color: #d100d1; font-family: Arial,Helvetica,sans-serif; font-size: 110%;">I think it is interesting how they compare an skilled producer like Skipper and a hard work producer like Gilligan and compare them to nations. This made me think about the efficiency different nations have in the production and how technologies affect production:

<span style="color: #d100d1; font-family: Arial,Helvetica,sans-serif; font-size: 110%;">Let's think what would happen if the **factors of production** changed, for example let's say that Skipper finds a way to fish with a bigger net and was able to fish 200 fish in 1000 hours of work, then he would have the **absolute advantage** in both and specialization and trading with Gilligan wouldn't have any sense.

<span style="color: #d100d1; font-family: Arial,Helvetica,sans-serif; font-size: 110%;">In my opinion this video is a good example to explain the different concepts. Good video and it contains two of my favs! Nice job. 10/10