Class began with a review of production, supply, cost, and economies of scale. The class worked through the following problems:
Then the class used the two graphic organizers below to begin studying Macroeconomics and inflation. The first page of notes came from a video; the second page of notes is based on this episode of Planet Money. Episode 252: The Gold Standard.
:
X
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Fixed Costs
|
Marginal Cost 1-100
|
Total Cost to Produce
100
|
Marginal Cost 101-1,000
|
Total Cost to Produce
1,000
Widgits
|
Profit selling 100 Widgits for $4.00 each
|
Profit selling
1,000 Widgits for $4.00 each
|
Company A
|
$2.00
total Marginal Cost for 1-100
=
|
$300
|
$1.00
total Marginal Cost for 101-1000
=
| ||||
Company B
|
$250
|
$3.00
total Marginal Cost for 1-100
=
|
$.50
total Marginal Cost for 101-1000
=
|
Then the class used the two graphic organizers below to begin studying Macroeconomics and inflation. The first page of notes came from a video; the second page of notes is based on this episode of Planet Money. Episode 252: The Gold Standard.
Name __________________________________________ Date _____________ Period _______
Mediums of Exchange; What is Money? Introduction to Macroeconomics; Inflation and Monetary Policy
List at least five things people have used to facilitate trade and commerce over the years and around the world:
|
1
2
3
4
5
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Who created the first money? ________________________
Where was “paper” money (e.g. currency that has no value on it’s own first developed? _________________________
What are some ways paper money makes trade easier?
“Paper currency” is controlled by a government; what can a government do when they control the supply of money?
What determines prices?
What is the law of Demand?
What will happen if the supply of money increases?
|
What will happen if the supply of money decreases?
|
In a modern economy who controls the supply of money? __________________________________
Planet Money: The Gold Standard
Essential Question: Should the government be able to control the supply of money?
(Hint: most economist say, “Yes.”) The episode we are about to listen to is introduced this way:
On today's show, we visit the charming curmudgeon and respected finance writer James Grant. He says we should go back on the gold standard.
His basic argument: Under the gold standard, money holds its value. Central banks can't create (or destroy) money at a whim. In his words:
So the gold standard, the value was fixed and we adjusted our affairs to this North Star of value. Today, the North Star is like a comet. Ben Bernanke testifies one day, he thinks he wants to impart a little zest into our shopping by injecting more green, paper dollars into the world. He thinks that more of them will be more better. Why? Because it will cause prices to go up just enough. Not too much, but just enough. Do you believe that? It's risible. Laughable.
Arguments in FAVOR
of the Gold Standard
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Arguments AGAINST
the Gold Standard
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Questions I have
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Additional Notes
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My final thoughts on gold:
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