The COVID-19 Crash: AP Macroeconomics Study Guide

AP Macroeconomics Connections

The COVID-19 crash offers a rare, clean example of a supply-side shock combined with a demand-side collapse hitting simultaneously — useful for illustrating aggregate supply and aggregate demand concepts together. It's also a strong case study in fiscal and monetary policy coordination, and in the challenges of monetary policy at the "zero lower bound," when rates are already near zero.

Key Terms to Know

• Exogenous shock
• Aggregate supply / aggregate demand
• Fiscal stimulus
• Zero lower bound
• Quantitative easing