Macro 3.2- Inflationary and Recessionary Gaps with Fiscal and Monetary Policy AP Macro

Mr. Cliff from ACDC Econ explains key macroeconomic concepts, focusing on aggregate demand and supply. He discusses inflationary and recessionary gaps, highlighting their impact on unemployment and GDP. The video covers fiscal policy measures like government spending and taxes to address these gaps. Additionally, it introduces monetary policy, explaining how changes in the money supply affect interest rates and investment. The goal is to understand these concepts to solve economic problems using fiscal and monetary policies.

What is the significance of the long run aggregate supply curve in macroeconomics?

How does the concept of full employment relate to the inflationary gap?

Explain the concept of an inflationary gap and its implications for the economy.

What actions can Congress take to address a recessionary gap?

Describe the differences between fiscal policy and monetary policy in addressing economic gaps.