Money Supply

• A. Illustrate and explain why the AD curve slopes downward.

B. Using both the Keynesian Cross and the AD-AS Model, illustrate and explain what happens when the Federal Reserve (The Fed) increases the money supply

1. Using the AD-AS Model, illustrate and explain the causes of and the resulting government response.
   1. The Great Depression
   2. The 2001 Recession

1. Illustrate and explain the stock market crash and bank failures of the Great Depression according to Cathing-Foster and Fisher.

1. A. Explain the three causes of structural unemployment discussed in class.

B. Illustrate and explain the difference between a permanent recession and a temporary recession.

1. A. Illustrate and explain the difficulties that demand-side economics faced in the 1970’s and how it was eventually dealt with in the early 1980’s.

• Illustrate and explain the method and ideas of supply-side economics.

1. Explain the Great Recession according to the “Crisis of Credit” video.

1. Compare the Great Depression with the 2007-2009 Recession using the AD-AS Model.Illustrate and Explain.

1. A. Explain Japan’s “Lost Decade” through the Balance-Sheet Theory.

B. Explain how the US situation may differ from Japan’s “Lost Decade”.