Monetary policy graphs

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

201 201 views | 8 Sep. 2010

Mr. Clifford's explanation

Mr. Clifford's explanation of inflationary and recessionary gaps. Be sure to watch the bonus round which includes an overview of fiscal and monetary policy. Please keep in mind that these video lessons are not designed to teach you the key concepts. These videos are a review tool to help you better understand what you learned in class.

ACDC is Mr. Clifford's teaching philosophy:

Active Learning

Cooperative Learning

Discovery Learning



i love you!!

Matthew Putnam

Oh wow so this subject matter can be easy after all. There should be a small board of teachers in every category who own their category and make the shitty teachers watch their videos so that they may learn how to teach simply and effectively....because this makes sense. 

Ian Phifer

Stop moving the Damn Camera, I got a Test tomorrow.


Honestly, whatever I learned in a semester (which I didn't fully understand EVEN with the huge amount of time), I started to FULLY understand within these short videos of yours. Why couldn't you teach at my school!? But seriously, you're awesome and thank you!


concise, straight forward and right to the point. Id be great in econ if my teacher taught like this

Sophia Madonia

You're a king amongst men.


thank you thank you thank you thank you

syprian isaacs

When i become an economist, i'll give you some money. Excellent video thanks soo much

Osama Bin Khalid

Thanks dude

Antonia C

THANK YOU! You explained this a million times better than my teacher did! With your help I shouldn't fail my exams! YAY :D


Ur catchphrase= thats the concept btw thanx a lot - super helpful

mike r

isn't monetary policy the banks? how can gov'mnt decrease interest rates?


2 dudes failed the exam


Watching these awesome videos just shows how crap my macroeconomics teacher is. This guy is awesome! Test in an hour, WOOOOOOOOOOO!

Adno Mahad


Trini Army

This was really helpful. thanks!

Sandar .Htike

wht is PL on the graph??


wow... I get it... I get something Macroeconomic!! (Y)


great video!


Im startled

Me Again

This is wrong mr clifford - . Recessionary Gap is drawn wrong. It has to be below the EQ point - Production is fallen below the natural rate of employment - Peace outskies

Joshua Chavez

YO!!!! i recommended this to all my econ friends. Its hard to find a econ video that has someone that speaks perfect English without an accent. So thanks and until next time. PS you need HD!

Marcus Fearon

bro you old dog, go unda the porch


@mikerot91 The CENTRAL banks. In the past monetary policy for most countries was the responsability of the Treasury/Finance Ministry and it's still the case for some economies like Japan. So the government was directly setting interest rates. Today most major central banks are independent (*) but people still refer to the central bank as being "government" in the broad sense of the term. (*) I don't believe independent central banks are truly independent, that's a big joke!

Roman Lewandowski

I really value your videos. I really wonder one thing: why do I get to sit a whole lecture to be taught the same thing you just did for 4 mins.

Amy C

dude you're the best

Movie Spoiler

why are you trying to decrease AD? dont you want to stay where you are? beyond full employment? what are the negatives for an inflationary gap?

The Burmese Girl

Thank you sir! Now you have helped me a lot with the inflationary and deflationary gaps for my exam your explanation is short to the point and superb

Arvind Srinivasan

im fucked beyond belief


'ANDDDDD START THE VIDEO'.. love when he says that

Ess Iyayi

i love Mr Clifford! perfect teacher

Mano Raaju

Wow...u are really really a great teacher..I loved the way you explained and the the bonus round was really what i needed..Thank you..u are amazing...

Soul Machingauta

woow u are too much sir

Anthony H Roberts

Thanks for the down-to-earth explanation. It helped me understand the concept very well.

Dhuren Govender

Dam, Americans got swag! Thanx for the vid!!

San Domingo

I wish i could like this more than once!

Michael C

3:04 ....stimulus anyone?

Paulina Walker

This is wrong

Moon Light

When he said stimulus.......... little did he know

Jessica Matthews

Speedy. Wow take your time, too fast

Alexander Gugliotta

final tomorrow!! this helps so much!!

Split2nd Reality

In my lessons the ad moves opposite?


helped clear up a lot of shit for me. thanks man! boss teacher!!!


Thanks you made me finish this chapter in 4 minutes.. hope I pass tomorrow :(


@mikerot91 Some banks are owned by governments. In the case of the federal reserve, the government can stop selling bonds which would then decrease money supply.

Dhanyia Passcuran


Belle Vy

0:48 - I have a feeling that if I can't draw it you're gonna hit me with that big ruler >_< Anyway, awesome lecture! Thank you!

ramazah masood

God Bless you! I might not fail my Macro Midterm today...


You're a boss.

Abdul Karim

You are BEST!



Shahana Yasmeen

Thankyou sir .its really a helpul material for me

Farah Khalil

AP exam tomorrow.. seriouslly fml

Ziyaraat 247

You are a great teacher.keep it up I have done MA in economics too.... you created good videos

Rhea Banerjee

Wait I have a question. With the monetary policy, aren't you increasing supply and not demand? Because lower interest rates would mean more firms would invest and hence supply would increase

Rohit Tadikamalla

Hey Mr. Clifford, you're such an amazing teacher on Econ. I'm taking AP Micro/Macro online through APEX and you explain a whole concept in 1/10th the time. I wish i had found out about you earlier in the year. But thanks for the helpful videos. I have my AP exam tomorrow and you're videos are the best way to review everything! Again, thanks very much! (btw, love the belt buckles!)

Suruchi Mehtaz

Amazing... I wish every teacher teaches like you on YouTube..Your videos are On point,short and Easy to understand..


Isnt it the Fed that changes the Money Supply in monetary policy? just wondering in case im asked to explain it. thanks


the ending of Fiscal policy affect C and G and Monetary policy affect I makes things so much easier

n y

You are amazing!!! I bought the packet as well and it has helped me soo much. To everyone watching, this guy and his work is grade A and deserves every econ student to watch him and support him! You helped me pass MICRO AND MACRO and I can't thank you enough!!!

Anderson Avarell

3:04 that aged well

Sharon Zhu

What... I got that confused all semester and never got it, and suddenly in 4 minutes everything makes sense. That's fantastic.

Mo Mu

(I'm a guy) ... Marry me please

Hamza Godhrawala

So simple..so good

Lydia Liu

Thank you so much!!!!


U make my teacher seem like he doesn't know what he is doing. How could this be so simple?

Alex Rodriguez

Massively helpful. Many thanks.

Emilio Betancourt

This is backwards I think. The inflationary gap should be after the LRAS and the recessionary gap should be before the LRAS?


You are a life saver. THANK YOU SO MUCH!!


Monetary policy is introduced by Central Bank not Government!

Andrew Dawson

These videos are great, thanks a lot for the help.

Powder_ Days

What about expansion and contraction with interest rate/cash rate? I get them mixed up. Lol.

Ankit Shubham

you're so cool :-B


Great video but just to clarify, the government does not increase/decrease money supply, monetary policies are controlled by the country's central bank.


why don't I have a professor like you?


BOOM! That was so helpful. So easy!

That Philosophical Dude

Instructions not good enough.  It's been 3 months, the video is still paused at 0:48.  I don't know what to do.  Someone send help!

Arjun pangannavar

To Keynes, the real inflation starts after attainment of full employment.




What effects the AS-curve then if both monetary- and fiscal policy effects the AD-curve?

Chloe K

Your passion is as clear as your explanations! Thank you so much! More, more, more!

Sophia De Lurgio

wife me up lol

Gaurav Gupta

ikr... this is soo helpful! thank you!! its nice and swift and quick lol GG

Arman Sabahi

How does the government decrease the money supply? The federal reserve surely can increase or decrease the money supply but what can the government do?


is an ap exam like an end of yr exam? sorry i'm from australia and we don't have that here.

Michelle Tang

thank you so much! you just cleared up this ugly cloud in my mind

Jack Wood

You speak faster than my economics lecturer at double speed


wowww, i understand too much now. i think i should go and work for the fed. thanks

Rachael Burke

what about keynesian ???

saikrishna vemuri

what is Xn

Terry D.

This is good... easy to follow... it is quick so take notes or play it again!!!

jamie camilleri

The best you tube economics teacher, well done :) with all your videos i understood economics wayyy easier. A big well done for all of this help.
thanks Mr.Clifford

Terry Lee

Thanks, it is going to help me so much in the exam~

Daniel Tran

@jellybean1234jess PL = Price Level buddy :D

Bruce G

So much better than my econ teacher and you get it done in 1/100th the amount of time that he takes. 

Irfan Khan

more like less than 12 hours lol


Thank you so much for your videos. Today I was on the verge of crying because I could not understand this shit, I don't know anyone who will help me because they're busy with harder classes, the test will have nothing directly from our textbook, and I don't understand the concepts, and the teacher sucks. This has helped me understand 80% more of my practice test for a particular chapter. Thank you SO MUCH for this free service.


Ur catchphrase= thats the concept! :) btw thanx a lot - super helpful


Thank you,


You might be the reason I pass this year. THANK YOU, SIR!

Monetary policy graphs

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Monetary Policy Graphs (2 of 2) - Macro 4.6

186 118 views | 15 Mar. 2012

Here is the second video

Here is the second video where I explain how the Fed uses monetary policy to adjust interests rates and shift aggregate demand. Enjoy.

Need help? Check out the Ultimate Review Packet for FREE: https://www.acdcecon.com/review-packet

Kilimo Wilfred

Thanks but network bad

Hanan Al Rais

You made my life easier

Bryan Velazquez

Someone give this man a raise!

Alejandra Radillo

you rock!

Sujay Syal

Mr. Clifford you deserve a gold medal. Your ability to simplify and explain economics at a high level in unmatched anywhere on youtube.

Sim Yun Shen

This guy needs a Medal

Khomotso Bashele

Why can't our lecturers explain things like this! Getting straight As wouldn't seem impossible!

Rachel Karl

This is amazingly helpful and simple to understand. THANK YOU!

Kyle Gorny

I would't be able to Econ without your videos Mr. Clifford thank you so much!!!! I pretty much consider you my econ teacher for this whole semester:D


When you decide to run for a position in government, YOU WILL GET MY VOTE. WE NEED ECONOMISTS in the CONGRESS who will make COMMONS-SENSE ECONOMIC DECISIONS.


Time and time again, you make Economics simple. Cheers Boss!


ACDC belt?? holy shit....don't screw the shirt and the trousers like that :P 


My econ teacher sucks so bad, our last test is tomorrow and you have saved my grade! Thank you for making this so simple and easy.

No Name


Alex Perez

could you like... uh... maybe replace my macroeconomics teacher, that would be great


Not sure if this is a silly question but...what is the discount rate? I'm from the UK so it might be a states thing as I've never heard of it before. Btw I'm not at university yet but this is still surprisingly helpful despite the age difference I can still kinda keep up so thanks Mr clifford, you're great!

Mehfooz Husein


Marie Cardenas

here for finals. :P


I'm totally against Keynesian economics and think it's bs. but this guy has the best explanation of it around.


It's amazing how my professor managed to confuse the whole class for 3 consecutive weeks on monetary policy, and you helped to make sense of the concept in under 3 minutes.

Siam.X 8707

yeah?!!!!!! man !!!!

Valentina Lizasoain


The Fail Hunter

Awesome video! Clear, quick, concise. Thank you so much for such a helpful lesson!

Leonardo Nunes

What happens if the shock is: Money demands increases (Md arrow up) and Consumption goes down?

usman naseer

we like u cliff


Thank you!! Finally, I had that AHA! moment re: monetary policy.

Alexis Rogers

thank you so much you helped me a lot.  Before I saw this I was lost. Now I actually get it thanks

seegalleet lillian

and suddenly it all makes sense! thank-you and also can you come teach at my uni?

Vedansh Nathani

You're a god

Faiah Lumination

This is, honestly, really really good.... best explanation I've heard so far (all your other videos too) Thank you so much for the clear explanations

armo legend

Thank you youre very helpful


Question: Why do interest rates go up when money supply shrinks? And conversely why do they go down when money supply rises?

Nicole Mairena

Great Job Teaching, I am getting through college macro with your help!(: Thank you!

waleed harbi

This guy is awesome!

Resident Reveler

If this guy could teach all commerce subjects, I don't think B.schools are necessary. LOL

Tom Hoatlin

Gonna buy your app as youtube tuition, thanks.

Monetary policy graphs

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Monetary Policy and the Fed- EconMovies #9: Despicable Me

223 618 views | 2 Nov. 2015

Teachers! I created NEW

Teachers! I created NEW worksheets for all my EconMovies episodes and for all the Crash Course Economics episodes. If you want to learn more about these worksheets and get some samples, fill out this form: https://forms.gle/1XajQCpkmcdw3Spx5

EconMovies explain economic concepts through movies. In this episode, I use Despicable Me to explain monetary policy, interest rates, and the role of banks in the economy. Good luck studying economics. Oh, and don't mess with Janet Yellen. Thanks for watching. Please subscribe.

Watch ALL episodes of Econmovies


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I love watching these videos even when I fully understand the concept. Thanks for the help

pierre michel

Hello, have you or can you explain the economics behind the health care in the USA- relation between medical field and insurance- Corrupted????

Taqdees Aziz

this is so interesting.



Sergio Angel

Taking more notes from your videos than I do from my Professor lol. Once again, sir, you made macroeconomics a fun subject.

Mike Hunt

Just done with my final economics exam.. Thanks a lot Mr. Clifford. I was stuck with oligopolies but the dark knight video really helped me. Stay awesome

Kay Chaudhry

how come you have so less of viewer.. you really deserve much more than this.

Daniel Garay

the fucking fed teasing with raising the interest rate has been messing with my country's economy, and many others around the world. Ever since they announce in 2012 that they were gonna raise their interest rate, the exchange rate has risen from 2.7 to 3.5. Now is really expensive buy things form the US, investment shrank a lot, and also thanks to that announcement (and china's recession) mineral prices also decreased a lot, and they are the main export of my country, so before 2012 we were growing at rates of 7-8% annually, and now we are back again at 2-3%, and now with the US and my country's elections next year I can foresee a small recession in my economy.... I now is bad to say this, but i wished the crisis had lasted a little longer, thing were doing great here... Great video by the way, I really like your channel.

Sasha Mireskandari

You have taught me more than my actual teacher. Thanks!

Abigail Brown

I'm not even sorry. #yellowbuttplugs

Sameer Malik

Mr Clifford were you a teacher at Lester b. Pearson high school in calgary, AB?

Charles Spurgeon

Mr. Clifford would you make a video of the problem when printing more money?

Luke Gresser

I am a university student. I came across these videos today preparing for an exam.
I cannot believe how helpful they are. Thank you!


New era of econ lecturing..

Piraya Srisathitvatana

movement and shift for a demand and supply curve

Lindssay Tran

You're awesome

Михаил Крюков


Cassandra Charland

Thank you for the amazing videos!

peter eias

real hero

Christian D.

Hi Mr. B

Claudia Spain

Dude your videos are AWESOME. Fast, short and to the point. I really dont think I would be passing my MBA economics class without them. THANK YOUU!!


This was very well done. Thank you, from another YouTuber who's also an econ student!

Abdul Rafay

Who saw the "invade Canada " sign at 4:41 ????

Jonathan Q

In capitalism nothing is too big too fail

Rawan Alali

Very interesting and powerful ? thank you ?

Michelle Jiang

I rarely find videos study videos that actually make me laugh and learn at the same time. XD thanks man!

Bharghava K

Aww man, spoilers.

Erik P.T.

Make an update on the Monetary policy with the new Fed.

Cesar Vigil

ay dat econ doe

Rahul Mawa

I love economics because of you. The day this channel ends so will my interest in economics. Thank you so so much...

andrea luce

3:39 JUMBOTRON backwards on the light-up screen....

Jazmine Nieves

these are AMAZZINGGG, please make more. I wish all my teachers would explain things like this. You're Kinda making me wanna change majors right now.

Eunwoo Kim

WIll you please try making econ movie episode for the movie Parasite?

Arun Aggarwal

This guy saves me before every exam . Thumbs up!

Zeta Man

That was awesome. Thanks!

Beth Lawrie-Smith

This video is awesome! Thanks Mr. Clifford for making teaching Econ. easier and fun! I will use this today to help explain monetary policy! You rock!! :)


is his voice speed up?

Sameer Malik

haha you're the best! I am trying to read my book and watch your videos to understand the concepts. so far I have done well! I just scored a 75% in a quiz that I was very nervous about. kindly stay passionate about your teachings! I must say You're definitely making a difference in my life!.

Aarom Barefoot

My son actually enjoys watching your videos with me so I can do my homework and spend time with my little buddy ☺


Thank you so much, this video is awesome!

Tadiwanashe Manyika


Jamie Holton

I'm a Dutch student studying in Singapore now, and from all of my economics teachers worldwide, YOU are the best one! :) Thank you for putting in so many hours into explaining concepts and calculations as well as making it fun and interesting! I am now genuinely interested in economics, simply because I understand it. :)

Murtaza Ali

grt concept to explain such difficult things in an easy way
its help a lot
thx :-) :-) :-)

Amanda Anyaehie

thank u so much I now understand this topic so well
you make economics seem so easy and I thank you for that.

Libby Warren

the ac/dc belt buckle is so distracting lol

achmad rizki


spicy export

this video was very helpful , I like how this guy makes things easy to understand


Did he just explain monetary policy with Despicable Me? That's why I call a genius.

meleonie Soreal

Excellent job!!!...it was real funny too


But isn't time preference another major factor in determining interest rates?

Vienna M

You talk way too fast. Slow down please.


invade canada?

Madalena Cardoso

I love your movies and creativity

Linh Nguyen

This video is saving me thank you so much!

Siddu Kolli

Did anybody else see the "Invade Canada" Missile?

Emmanuel Uzodike

invade canada lol

luis alvarado

I think you are phenomenal .....

Mario Pasaribu

4:39 Invade Canada...


Mommies Joy

Thank you and thank you for making monetary policy interesting to learn.

Tsering Namgyal

this was an awesome content, keep up the great work.


You deserve more subs and more views. You've made this both entertaining and interesting.



Bender Bending Rodriguez


formerly Lehman Brothers...

Classyyy Girll


Mango Mango

Can you do one on Captain America Civil War

Guerta Toussaint

You are the ABSOLUTE BOMB!!!!!!! you have made my macro-journey so much more doable and enjoyable. Your kwerkyness, knowledge of the material and your simplification of the concepts have been an amazing help in understanding the core elements.

Please keep it up. :)

Daniel Sobczak

I start monetary policy tomorrow. Yay for flexible lesson plans! Going to start with this video.


OMG! That's super great video!!!

Carolina Lindner

You're a genius! Most well-made tutoring video I have ever seen! Huge shoutout for you for putting in so much effort. Wish there were more passionate teachers like you out there! <3

Tony Spillman

Anyone else feel like this man speaks at 1.25 speed? Lol! The first time I don't have to speed up videos when trying to learn! (sometimes even have to slow him down).


Mr. Clifford for President!

Divyadarshi Pandit

You are amazing!!!


No explanation to as why does any nation have to borrow their own currency from bunch of banksters?!

Spangie Pie

This was AMAZING :D

Sebastian Porras

Huge fan from Mexico, its even simpler to watch your videos in english then study the content in Spanish hahaha.

Maxime Meis

I love it that we have those smart people who are there to "fine tune" the business cycle. Greenspan and Bernanke both recognize that the Great Depression was caused by the Fed. Bernanke was also the last person to acknowledge the problem in 2009 and instead testified before congress saying everything was fine. Oh and these near 0 interest rates for several years under Greenspan. Didn't that fuel the bubble?

Sol Segovia

This is the most helpful video in youtube, so well explained, thank you!

Not Scarce

Shout out to Mr.Nascimento assigning this to is

Pratul r

*invade canada ! at 4:38 thought we wouldn't notice... but we did?

Kay Chaudhry

watching it for the first time and really loving it. your hard work is appreciated sir. well done!!!

Ola Nashaat

seriously that was awesome :D :D I loved it.


This is so cute and it explains monetary policy so well! Please do more EconMovies! ;)


Three Solutions to Problems of US Economy:
1) Monetary Policy
2) Fiscal Policy
3) Invade Canada

Ivan Bošnjak

If bank gives a man or a firm a loan. Where does the amount of money come from to repay the interest rate (97% of money is created throught commercial banks)? Does this essentialy creates demand for new loans?

Best regards

Dave Cullins

The government doesn't HAVE to step in, but your business cycle would just go really high and really deep if they don't which can have crazy consequences for people - think The Financial Crises-scale recessions and the kind of uprising there was before it. But without the government that's the kind of economic turbulance you would get, and it's not like it hasn't had any amjor political consequences....




I don't understand in what way "Quantitative Easing" is a new concept (wiki etc say it was first tried with the Japanese 90s crisis and the 2008 crisis), although according to this video it is exactly what the Fed does since 1913- that is buying bonds to increase the money supply, lower interest rates and boost consumption and investment. Could someone please explain? -Great vid by the way!

Cameron Aminian

Hey Mr. Clifford! You made economics a lot easier for me, and I ended up getting a 5 just by watching your videos. The least I could do is buy your app. I still like/think about economics, even though I am no longer taking it, because your videos are awesome! Keep up the AMAZING work!!! :)

KBJ Studios

Im having trouble understanding how you can use movie clips and copyright, how do you get the rights to use movie clips?


this is awesome. haha

Riya Relan

love these<3

Christopher Newsome

You need to watch this after this one https://youtu.be/mII9NZ8MMVM


2008 financial crisis explanation video please.

Valerie Bonz

thanks for being so awesome and helpful

María Karla González Pérez

i loveeee this movieee. ba na na

Chelle Padriga

Why go to college when I can learn on Youtube?

Eddelquin Kilingi

I was so sick of studying then I watched this..oh man everything is so much better

Sudhanshu Sawlani

This is awesome! Thanks a ton!

Fortune Tatenda

wooow!!!!! mr man i think you are a blessing

Yejin Lee