Dive into AP Macroeconomics Unit 5 with a comprehensive review of long-run consequences of stabilization policies. This episode breaks down short-run fiscal and monetary policy actions, their effects on aggregate demand, and introduces the Phillips Curve, equipping you with exam-ready graphs, multipliers, and pitfalls to avoid. Perfect for mastering FRQs and multiple-choice questions on recessionary/inflationary gaps.

• Fiscal policy: Expansionary (spending up, taxes down) vs. contractionary mechanics and multipliers
• Monetary policy: Open market operations, money market graphs, interest rates, and AD shifts
• Short-run effects on real GDP, unemployment, and price level
• Policy lags, timing differences, and RIPE mnemonic for recessions
• Phillips Curve introduction and common AP exam pitfalls

Master the full chain of causation for policy actions—like Fed bond buys leading to lower rates, higher investment, and rightward AD shifts. Calculate spending (1/(1-MPC)) and tax multipliers, draw money market + AD/AS graphs side-by-side, and identify gaps to choose expansionary or contractionary tools. Avoid traps like forgetting price level rises in expansions or confusing multiplier sizes.

Whether you're prepping for the AP exam or understanding real-world policy, this episode reveals why short-run boosts can lead to long-run trade-offs—essential knowledge for scoring 5s.

AP Macroeconomics Unit 5, fiscal policy, monetary policy, Phillips Curve, aggregate demand, AD/AS model, spending multiplier, tax multiplier, recessionary gap, inflationary gap, open market operations, money market graph, policy lags, AP exam review, FRQ tips

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