For the instructor who has students who want answers to difficult questions, the Library of Economics and Liberty is the place to find the answers.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author, and also publishes the Mikeroeconomics and iMacroeconomics VB blogs.
Check out the Phillips Curve.
Mr. Mayer is an AP reader. There's an email link with questions too. You'll find PowerPoints, video clips, and handouts.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author, and also publishes the Mikeroeconomics and iMacroeconomics VB blogs.
If you want to survey your students to see if they are learning, try using their cell phones. The site is: http://www.polleverywhere.com/ HT: Rich Wiess.
The SMG is a powerful tool that I believe teachers are under-utilizing. I admit that I don't know all of the features on my Blackberry. I called my cell phone provider to learn how to add a new group so I could send one text message to several students. Later this week, I want to begin sending questions and content for AP Macroeconomics.
I would welcome any suggestions.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author, and also publishes the Mikeroeconomics and iMacroeconomics VB blogs.
A recent article in the Economist discussed how business models are more collaborative. In the World is Flat, Thomas Friedman, explains how software allows use to collaborate with others around the world while you are sleeping. Just what are the economics of cooperation? The Dallas Fed has a publication here. The publication could be used to show how comparative advantage maximizes the benefits from trade.
Mark Perry posted an blog about the number of women graduating from college with advanced degrees. His post showed that women now outnumber men and the trend will continue as men prefer jobs that use their hands. One of the arguments I hear is that women are innatelly different than men in the way they work. As the argument goes, women are able to build consensus, are less aggressive, and are concerned less about ego than men. So it's likely that women will chair top companies and use a collaborative business model.
In developing my iPod app, Econexamcram, I used Skype to work with programmers in India. In designing my new web page, I used PayPal to find a programmer online. I am collaborating with others who specialize in the areas I want and we are trading based on our comparative advantage. This is what economics teaches.
In working with others from around the world, I have learned that the comparative advantage is dynamic. When changes occur in the market place, such as the new e-book readers, the comparative advantage shifts. Working with others requires communication and technology skills in order to survive.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author, and also publishes the Mikeroeconomics and iMacroeconomics VB blogs.
An excellent source of economic instruction are the comic books you can order from the New York Federal Reserve Bank. The complete list is here. You'll find that the Fed tackles inflation, what is money, monetary policy, savings and more. I've used the comic books in a time crunch as a substitute for my textbook reading. I think a classroom set of comic books are free.
Bitstrips allows you and your class to make cartoons. As the saying goes, "one picture is worth a thousand words."
As an experiment, I'm going to use the software to help my students pair through operant condidtioning, economics concepts with pictures.
I welcome any other cartoon making software suggestions. Bitstrips is not free.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author, and also publishes the Mikeroeconomics and iMacroeconomics VB blogs.
When the economy dips into a recession, workers lose their jobs and government tax revenues fall. Unemployment benefits automatically kick in to offset some of the loss in spending. During a boom, progressive taxes take more of a workers check so inflationary flames aren't fueled. Usually, fiscal policy takes government approval and is subject to lags. Automatic stabilizers take both the politics and lags out of the business cycle. Which below are automatic stabilizers and which are discretionary?
1. Government spending for a tank. 2. Transfer payments increase during a recession. 3. An increase in corporate income taxes. 4. Progressive income taxes. 5. Unemployment benefits.
My answers: 1 and 3 are discretionary.
Using the equation for calculating real interest rate, r, to complete the problems below. In this drill, i, equals the nominal interest rate, and e equals the expected rate of inflation.
1. i = 8; e = 2; r = ?
2. i = 8; e = ?; r = 10
3. i = ?; e = 7; r = 6
4. i = 3; e = 1l r = 2
Using the AP Macroeconomics formula, r = i - e the answers are: 6,-2,13, and 2. Sure looks like borrowing was really expensive in problem 2.
When I explain nominal interest rates, I tell the students that this is the rate posted by a bank. It is the rate you'll find in the newspaper. Nominal means in terms of money or currency. The real interest rate is measured in a basket of goods. So the real interest rate measures how much you'll repay in a basket of goods. When inflation is high, you'll be repaying the loan, by the repayment buys less goods than when the loan was made.
Is inflation bad? My answer is it depends. Inflation has winners and losers. If a bank extends a fixed rate loan and unanticipated inflation catches the bank off guard, then the bank is hurt but the debtor is helped. So inflation would be bad for the bank but good for the debtor. The economy overall is neither hurt or helped.
FRED Data Base Name __________________________
GDP
1. Navigate your browser to: http://stlouisfed.org/index.cfm
2. On the tool bar, select “Research and Data” highlighted in maroon.
3. On the top tool bar, select “FRED®”
4. On the Economic Research page, select, “Gross Domestic Product (GDP) and Components”
5. Now select, “GDP/GNP (23)”
6. Select, “GDPA”. A graph should appear. Print this graph. This graph is “Nominal GDP.”
7. Select, “View Data”. Record the data into the table below.
8. Next, select, “GDPCA”. Print this graph. This graph is “Real GDP.”
9. Select, “View Data”. Record the data into the table below.
10.Use a calculator to compute the GDP Price Deflator for 1960, 1970, 1980, 1990, and 2000. The GDP Price Deflator in 1960, was 18.59 by my calculations (526.4/2830.9 = .1859 * 100).
11. Turn in two printed graphs and completed table above.
Extra Credit:
1. Calculate the GDP growth rate between decades for Nominal and Real GDP.
Interpret both growth rates.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author, and also publishes the Mikeroeconomics and iMacroeconomics VB blogs.
When the economy dips into a recession, unemployment increases and tax revenues fall. Public schools base their budgets on projected tax revenues. In Iowa public schools are faced with across the board budget cuts and staff reduction through attrition and reduction in force. Public school teachers have been forced to do without vital learning tools such as textbooks. This semester, I have been experimenting with online teaching. One resource I found, is provided by the St. Louis Federal Reserve Bank.
This online module, GDP and Pizza, promises to replace the 30 plus textbook pages of reading from my textbook authored by Paul Krugman and Robin Wells. I am excited about using online content because I think students interact with the data and often click on related links that they find relevant.
This is just one online learning module. I want to find as many as possible, such as the ones found at the Powell Center for Economic Literacy.
I also want to find content that is delivered directly to a cell phone such as the one Jason Welker provides.
Teaching AP Macroeconomics is theoretical and requires a disciplined student. I believe if we work together, we can compile online learning tools that deliver content and value.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author, and also publishes the Mikeroeconomics and iMacroeconomics VB blogs.
An excellent source of economic information is at Ask.com. If you want quality information on marginal utility, try Mike Moffatt. Mike has a knack for delivering content in a readable and effecient manner. You can also receive his updates to your blackberry.
How many of you are finding that your schools are not buying textbooks? I am wondering how long it will be before all content is delivered to hand held devices like phones and Kindles.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, Iowa.
The country of Alpha has a population of 450 residents. There are 5 residents in the military, 2 are retired, 3 are in prison, and 40 are under the age of 16. Calculate the civilian non-institutional population. In Alpha, there are 50 discouraged workers and 50 workers actively looking for work. Calculate the labor force, the unemployment rate, and the labor force participation rate.
Civilian Non-institutional Population is: 450 - 5 - 2 - 3 - 40 = 400
Labor Force is: 400 - 50 = 350
Unemployment rate is: 50/350 = 14.28%
Labor Force Participation Rate is: 350/400 = 87.5%
In your AP Macroeconomics class, you might want to discuss how different demographic groups are affected by unemployment. For example, teenagers typically have the highest unemployment rate. An interesting discussion topic might discuss measurement.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author.
A review book that offers challenging review questions is titled, AP Economics, by James Chasey. The link is here. I have found this book to be thought provoking and students must synthesize information to answer the questions. This is an excellent source of free response questions too. You'll have to know your material to complete the reviews in this book.
This book provides both reviews for AP macroeconomics and AP microeconomics.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author.
Which of the following is false?
a. The natural rate of unemployment equals the sum of frictional and structural unemployment
b. The labor force participation rate equals the labor force divided by the civilian noninstitutional population
c. Employment plus unemployment equals the labor force
d. The labor force participation rate equals the total employed divided by the civilian noninstutional population
D is the answer.
Extra credit. Why has the labor force participation rate inched upward since the 70's?
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author, and blogs at Mikeroeconomics.
Show the video and ask students what will change--supply or demand? Next, discuss how price and quantity would change. Discuss how automobiles are produced in an oligopoly market. Discuss how prices are set either through price leadership, kinked demand curve, or strategic interdependence. As a review of positive vs. normative economics, discuss whether the government should require more regulation.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, Iowa.
If you are discussing the national debt, check out this 30-minute video.
Do you believe in Ricardian equivalence? The evidence shows that most consumers did not spend their rebate check. Instead they saved part of it. Do you anticipate higher taxes? Are you going to leave a bequest? I think these questions are part of any discussion on the debt.
About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an EconEdLink.org author.
Say inflation this period is 6%, people expect inflation to be 2% and the natural rate of unemployment is 5%. Using The inflation augmented Phillips Curve equation, find the value of unemployment. Assume that Pt = Pe - 2(U - Un).
The unemployment rate would have to be 3%. This equation leads to some deep insights into the working of the economy. Unemployment would have to be 2% less than the natural rate to push inflation to 6%. Workers would have to work longer and harder. Now suppose Okun's Law holds and every 1% decrease in the unemployment rate leads to a 2% increase in GDP. That means that GDP is growing at 4%--just ahead of it's natural rate.
Now suppose that the unemployment rate is 10% and the natural rate is 5%. Would you agree that it might be as long as 5 years before the unemployment rate equals the natural rate? I don't forecast any better than a divining rod, but if the economy chugs along at 2% annual growth, it might be 2015 before the recession ends. It's interesting to me that the FRED graph shown, shows that the recession is over with GDP around 1.5%.
