Transcript science of scarcity - Teaching Macroeconomics and economics with

Uncle Sam wants you to
do better in economics.
1. Economic
Growth
8. Favorable
Balance
Of Trade
2. Full
Employment
Eight
Economic
Goals
3. Economic
Efficiency
4. Price
Level
stability
5. Equal
Distribution
Of Income
7. Economic
Security
6. Economic
Freedom
Full $20 Billion
Increase in AD
AD2
LRAS
Price Level
$5 Billion in additional
government spending
Or decrease T by $6.67 billion
PL1= $20 B]
[MT of -3 x -$6.67 billion
SRAS
$510
YF
Real GDP
Marginal Tax Rates
28%
I only have
to pay the
FICA tax.
28%
$183,250
0
Standard Deduction
[$6,100-dependent]
[8,925-single]
[$12,750-HH]
[$17,850-married filing jointly]
20%
Take that, you
“low incomer.”
I’m a “low
incomer.”
10%
$50,000
And – how did former President George
W. Bush do in college economics?
Let’s take a look at his
college transcript.
Gov. 73 /71
Econ 71/ 72
President Bush’s overall average 77
Gore’s average was even worse.
Kerry’s overall average 76.
Major: Animal Science
Major: Animal Science
“So - If you are having a hard time in economics,
don’t worry about it. You are on schedule to be
President of the U.S., or at least a governor.”
One problem – he missed every 3rd answer on tests.
PL
LRAS
SRAS1
AD1
SRAS2
103
Y*
RGDP
AD
PL1
PL
AQD
AQD1
There go some
of my profits!
AS
PL1
AQS1
C
AD1
Ig
PL
XN
Corvette
Ferrari
[Exports-Imports]
AQD1
RDO
Anything that lowers
the cost of production
will shift AS right.
1. Lower business taxes
2. Decrease in regulations
3.
You save money. We don’t require
dental or medical insurance. You
don’t have to pay us a pension and
we don’t take sick days. And – we
can dance.
Increase in subsidies
AQS1
LRAS SRAS
LRAS SRAS
AD1
AD2
AD2
SRAS
PL
Y*
800
RGDP
PL
SRAS
Y*
800
RGDP
Full $60 Billion
Increase in AD
AD2
Price Level
LRAS
PL1
SRAS
+60
$740
$800
YR
YF
“M” =
Real GDP
Y/ E = 60/15 = 4
Full $60 Billion
Increase in AD
AD2
Price Level
LRAS
PL1
SRAS
+60
Recess. Gap
$800
YF
Real GDP