Download AP Macroeconomics

Mike Raymond – Richland High School
AP Macroeconomics
Syllabus and Expectations
Course Description
AP Macroeconomics is a one semester survey of the concepts and tools that economists use to analyze trends and solve
problems on a national scale. Topics covered will be derived from the material included in the AP Economics Course
Description provided by the College Board. Content covered will include, but not be limited to, an analysis of national
income and its components, economic indicators, inflation and unemployment, money and banking, stabilization policies,
and the United States and world trade in preparation for the AP Macroeconomics exam in May.
Required Text
Ray, Margaret and David Anderson. Krugman’s Macroeconomics for AP. New York: Worth Publishers, 2011.
Supplemental Resources
Clifford ACDC Macroeconomics Videos:
https://www.youtube.com/user/ACDCLeadership/playlists?shelf_id=12&view=50&sort=dd
Morton, John and Rae Jean Goodman. Advanced Placement Economics Macroeconomics: Student Activities. 4th ed. New
York: NCEE, 2012.
Welker, Jason. AP Macroeconomics Crash Course. Piscataway, NJ: Research and Education Association, 2011.
Shmoop.com – Online review topics and test preparatory materials (Instructor will provide login information)
A variety of articles from the Wall Street Journal, The Economist, and other publications on current economic conditions
and policy
NOTE: Students will also be provided a study guide for their use throughout the semester. These books were purchased
by the district with the intent that they be a reusable resource for future AP Macroeconomics students. Damages
to the study guide may result in a fee being assessed to the student’s account.
Teacher Resources
Morton, John and Rae Jean Goodman. Advanced Placement Economics Macroeconomics: Teacher Manual. 4th ed. New
York: NCEE, 2012.
Ray, Margaret. Strive for a 5: Preparing for the AP Macroeconomics Examination. New York: Worth Publishers, 2011.
Course Expectations
Students must take primary responsibility for their learning. Students are expected to participate in all activities in a
positive, constructive manner. Students must be prepared to contribute. This is a college-level course. Students must
commit to a college-level attitude. This means completing all assignments on time and being prepared. A schedule for this
class will be posted each day. Students are expected to enter the class ready to learn, and to read the schedule to determine
what actions (if any) they need to take to be prepared to begin. Students will work “from bell to bell.” At the ringing of
the bell signaling the end of class, I will release students. They are not to leave without being dismissed.
Reading
Students must complete outside reading to create a foundational understanding of macroeconomics and fundamental
terminology, so they may apply their study to current economic conditions. Therefore, it is essential that AP
Macroeconomics students keep up with the outside reading assignments, which may be in the form of textbook pages,
online articles, or handouts provided by the teacher. Much like other college level courses, the reading load for the course
will be intensive. A reading schedule for each unit will be posted on my website. Reading quizzes will be given to
determine students’ levels of understanding the reading material. Students will also take vocabulary quizzes for each unit
to check for understanding of key terms.
Free Response Questions
Students will practice extensively with released free response questions from previous AP exams. In class free response
questions will be assigned frequently, as individual assessments and in conjunction with multiple choice exams. All free
responses will be timed to help students learn to complete these within the time restraints of the AP exam. Students will
also participate in peer review of free responses in order to familiarize themselves with the grading process and rubric
standards.
From the AP Economics Course Description:
When answering the AP Macroeconomics free response questions, a student should respond clearly and concisely.
Including paragraph or even full-sentence responses is not always necessary; however, it is important to address the verb
prompts appropriately (as explained below). Definitions of the following terms that are frequently used as prompts in freeresponse questions are:
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“Show” means to use a diagram to illustrate your answer. Correct labeling of all elements including the axes of the
diagram is necessary to receive full credit.
“Explain” means to take the reader through ll of the steps or linkages in the line of economic reasoning. Graphs and
symbols are acceptable as part of the explanation.
“Identify” means to provide a specific answer that might be a list or a label on a graph, without any explanation or
elaboration.
”Calculate” means to use mathematical operations to determine a specific numerical response, along with providing
your work.
Course Outline
The presentation of course material will coincide with the percentage of multiple choice questions from each content area
on the Advanced Placement test, as stated by College Board. The scope and sequence of this course is largely reflective
of this weighting, with consideration given to the instructional calendar and textbook treatment of these subjects.
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Basic Economic Concepts – 8-12% (approximately 3 weeks)
Measurement of Economic Performance – 12-16% (approximately 2.5 weeks)
National Income and Price Determination – 10-15% (approximately 2.5 weeks)
Financial Sector – 15-20% (approximately 3 weeks)
Inflation, Unemployment, and Stabilization Policies – 20-30% (approximately 3 weeks)
Economic Growth and Productivity – 5-10% (approximately 1.5 weeks)
Open Economy: International Trade and Finance – 10-15% (approximately 2 weeks)
Advanced Placement Exam
Unlike previous years, Birdville ISD will be unable to pay the entire cost for all students enrolled in AP classes to take the
exam. Students will be asked to pay a fee of $15 (or $5 if the student qualified for Free/Reduced Lunch) to help cover the
cost of the exam for each AP course they are taking. This fee will be collected in January. Every student will sign a
contract upon enrollment stating that they agree to take the exam seriously. If students choose not to take the AP exam,
they will be charged an additional $30 fee.
The AP exam for Macroeconomics is 2 hours and 10 minutes long. It includes a 70-minute multiple-choice section
consisting of sixty questions and a 60-minute free-response section consisting of three questions (one longer essay and
two shorter essays).
While excellent performance on the AP exam is a goal of this course, the main focus should remain on learning the
material and developing good study and analysis skills. The instructor will provide many opportunities for students to
prepare for the AP test, including multiple choice tests with questions from released exams, and in-class practice with free
response questions from previous exams. Students will become familiar with the grading practices for the AP exam, to
understand the scoring guidelines and process. All students will be required to sit for a mock exam in March to gauge
preparation for the actual exam. This mock exam will count as a test grade.
Course Outline
Unit/
Est. Time
Frame
Unit 1:
Basic
Economic
Concepts,
Supply and
Demand
(3 weeks)
Topics
Essential Vocabulary
Readings, Activities, and Assessments
A. The Study of Economics
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Krugman: Module 1, 3-8 and Appendix
B. Introduction to
Macroeconomics
C. The Production
Possibilities Curve
D. Comparative Advantage
and Trade
E. Graphs in Economics
F.
Supply and Demand
G. Price and Quantity
Controls
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
Absolute advantage
Capital
Capital goods
Capitalism
Ceteris paribus
Choice
Command system
Competition
Consumer goods
Direct relationship
Economic costs
Economic profits
Economic resources
Economics
Inverse relationship
Investment
Law of increasing
opportunity cost
Macroeconomics
Marginal analysis
Marginal analysis
Market economic system
Microeconomics
Normative economics
Opportunity cost
Positive economics
Production possibilities curve
(frontier)
Productive efficiency
Scarcity
Shortage
Surplus
Tradeoffs
Utility
Morton and Goodman: Unit 1
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Laws of Supply and Demand
Supply, Demand, and Equilibrium
Scarcity, Opportunity Costs, and the
PPC
Graphing Supply and Demand
Shifting Supply and Demand
Applying Supply and Demand to
Foreign Exchange Rates
Practicing Production Possibilities
Market Equilibrium, Shortages, and
Surpluses
Review of homework exercises
Unit 1 reading and/or vocabulary quizzes
Multiple choice and/or free response exam
Unit/
Est. Time
Frame
Unit 2:
Measuring
Economic
Performance
(2.5 weeks)
Topics
Essential Vocabulary
Readings, Activities, and Assessments
A. The Circular Flow and
Gross Domestic Product
1.
2.
3.
4.
5.
6.
7.
Krugman: Modules 2, 10-15
B. Interpreting Real GDP
C. The Meaning and
Calculation of
Unemployment
D. The Causes and
Categories of
Unemployment
E.
The Measurement and
Calculation of Inflation
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
Aggregate output
Aggregate spending
Business cycle
Chain-linking
Circular flow model
Consumer Price Index
Cost-of-living adjustment
(COLA)
Cyclical unemployment
Deflation
Expenditure approach
Exports
Final goods
Frictional unemployment
GDP deflator
Gross Domestic Product
Income approach
Inflation
Inflationary spiral
Intermediate goods
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Labor force
Money
National Income
Natural rate of
unemployment
Net exports
Nominal GDP
Nominal interest rate
Okun’s Law
Peak
Personal expenditures
Price index
Product market
Real GDP
Real income
Real interest rate
Real wage
Recession
Recovery
Resource market
Structural unemployment
Trough
Morton and Goodman: Unit 2
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Circular Flow and Answers to the
Economic Problem
GDP: Approaches and Categories
National Income Accounts and MacoCircular Flow
Unemployment and Okun’s Law
Comparing Nominal and Real Numbers
in GDP
CPI and Inflation
Circular Flow and Macroeconomic
Theory
GDP: Included/Excluded Factors
Price Indexes
Types of Unemployment
Business Cycles
Review of homework exercises
Current events related to measures of
economic performance
Unit 2 reading and/or vocabulary quizzes
Multiple choice and/or free response exam
Unit/
Est. Time
Frame
Unit 3:
National
Income and
Price
Determination
(2.5 weeks)
Topics
Essential Vocabulary
Readings, Activities, and Assessments
A. Income and Expenditure
1.
2.
3.
4.
Krugman: Modules 16-21 and 35
B. Aggregate Model
C. Fiscal Policy and the
Multiplier
D. History and Alternative
Views of
Macroeconomics
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
AD-AS model
Aggregate demand (AD)
Aggregate supply (AS)
Average propensity to
consume
Average propensity to save
Balanced-budget multiplier
Classical economics
Consumption
Contractionary fiscal policy
Demand shock
Determinants of AD
Determinants of AS
Disposable income
Equilibrium GDP
Equilibrium price level
Equilibrium real output
Expansionary fiscal policy
Fiscal policy
Horizontal (Keynesian) range
Inflationary gap
Interest rate
Interest rate effect
Intermediate range
Investment demand curve
Keynesian economics
Leakage
Long Run Aggregate Supply
Macroeconomic equilibrium
Marginal Propensity to
Consume (MPC)
Marginal Propensity to Save
(MPS)
Multiplier effect
Productivity
Recessionary gap
Say’s Law
Stagflation
Sticky Wage and Price
Model
Supply shock
Vertical range
Wealth (Wealth effect)
Morton and Goodman: Unit 3
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Consumption v. Savings
History of Economics
Aggregate Demand and Aggregate
Supply
Multiplier effect and AD/AS
Determinants of AD/AS Comparison
Applying APC, APS, MPC, and MPS
Investment and Investment Demand
Practicing Aggregate Demand
Practicing Aggregate Supply
Macroeconomic Equilibrium Price Level
and GDP
Manipulating the AD/AS Model
Basics of Economic Policy
Review of homework exercises
Unit 3 reading and/or vocabulary quizzes
Multiple choice and/or free response exam
Unit/
Est. Time
Frame
Unit 4:
Financial
Sector and
Money
(3 weeks)
Topics
Essential Vocabulary
Readings, Activities, and Assessments
A. Saving, Investment, and
the Financial System
1.
2.
3.
4.
5.
Krugman: Modules 22-29
B. Definition and
Measurement of Money
C. The Time Value of
Money
D. Banking and Money
Creation
E. The Federal Reserve
System
F.
The Money Market
G. The Market for Loanable
Funds
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
Actual reserves
Asset
Balance sheet
Bonds
Contractionary monetary
policy
Demand deposit
Discount rate
Easy money policies
Excess reserves
Federal funds rate
Fractional reserve banking
Loanable funds market
M1
M2
M3
Medium of exchange
Monetary policy
Money demand
Money market
Money multiplier
Money supply
Near-money
Open-market operation
Required reserves
Reserve ratio
Store of value
Tight money policies
Trade balance
Unit of account
Velocity of money
Morton and Goodman: Unit 4
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Functions of Money
Demand for Money and the Money
Market
Banks, Reserves, and the Money
Multiplier
Tight v. Easy Monetary Policy
Effectiveness of Monetary Policy
Loanable Funds Market and Bond
Market
Functions of the Federal Reserve
Tools of Monetary Policy
Parts of Money Supply
Expansion of Checkable Deposits
Mechanics of Monetary Policy
The Fed and Money Market
The Fed and Money Multiplier
Interest Rates and Monetary Policy
Cause and Effect Chain of Monetary
Policy
The Fed at Work
Review of homework exercises
Current events related to the Federal Reserve
and Monetary Policy
Unit 4 reading and/or vocabulary quizzes
Multiple choice and/or free response exam
Unit/
Est. Time
Frame
Unit 5:
Stabilization
Policies
(3 weeks)
Topics
Essential Vocabulary
Readings, Activities, and Assessments
A. Long-Run Implications of
Fiscal Policy
1.
2.
Krugman: Modules 30-34 and 36
B. Monetary Policy and the
Interest Rate
C. Money, Output, and
Prices in the Long Run
D. Types of Inflation,
Disinflation, and
Deflation
E. The Phillips Curve
F.
The Modern
Macroeconomic
Consensus
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
Budget surplus
Automatic (built-in)
stabilizer
Contractionary fiscal policy
Cost-push inflation
Crowding-out effect
Demand-pull inflation
Disinflation
Equation of exchange
(Quantity Theory of Money)
Expansionary fiscal policy
Fiscal policy
Full employment
Keynesian view
Laffer curve
Long Run
Monetarism
Monetary rule
Phillips curve (long run)
Phillips curve (short run)
Rational expectations theory
Self-correction
Stagflation
Supply shock
Supply-side economics
Morton and Goodman: Unit 3 and 5
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Monetary Exchange
Expansionary and Contractionary Fiscal
Policy
Fiscal Policy and Autonomous Fiscal
Policy
The Philips Curve (SR and LR)
Disputes over Macro Theory and Policy
Fiscal Criticisms, Crowding Out, and
Net Export Effect
SRAS and LRAS
Examining Monetary and Fiscal Policy
Graphing the Crowding-Out Effect
Macroeconomics: Short Run and Long
Run
Utilizing the Philips Curve
Economic Growth and Determinants of
Productive Capacity
Tools of Fiscal Policy
Analyzing the Macroeconomy
Supply-side Economics and the Laffer
Curve
Review of homework exercises
Current events related to fiscal policy and
government impact on economic conditions
Unit 5 reading and/or vocabulary quizzes
Unit 6:
Economic
Growth
(1.5 weeks)
A. Long-Run Economic
Growth
B. Productivity and Growth
C. Growth Policy
D. Economic Growth in
Macroeconomic Models
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Annually balanced budget
Budget deficit
Demand factors
Diminishing returns
Economic growth
Economies of scale
Efficiency factors
Factors of productivity
Human capital
Infrastructure
Labor productivity
New economy
Physical capital
Public debt
Public investment
Research and development
Rule of 70
Supply factors
Sustainable
Technology
Multiple choice and free response exam
Krugman: Modules 37-40
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Economic Growth Factors
Government Budgets and
Macroeconomic Theory
PPC and LRAS
The New Economy: Good and Bad
Review of homework exercises
Current events related to federal budgeting
Unit 6 reading and/or vocabulary quizzes
Multiple choice and/or free response exam
Unit/
Est. Time
Frame
Unit 7:
International
Trade and
Finance
(2 weeks)
Topics
Essential Vocabulary
Readings, Activities, and Assessments
A. Capital Flows and the
Balance of Payments
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Krugman: Modules 41-45
B. The Foreign Exchange
Market
C. Exchange Rate Policy
D. Exchange Rates and
Macroeconomic Policy
E. Putting It All Together
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
End of Course
Review
(1 week)
Review major concepts
Appreciation
Balance of payments
Capital account
Comparative advantage
Current account
Depreciation
Devaluation
Domestic price
Dumping
Exchange rate
Floating exchange rate
system
Forex Market
Import quota
Imports
Managed or fixed exchange
rate system
Net export effect
Official reserves
Protectionism
Revaluation
Tariffs
Terms of trade
Trade barriers
Trade deficit
Trade surplus
World price
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Comparative Advantage and the PPC
Comparative Advantage and Trade
Barriers to Trade
Applying Balance of Payments
Domestic & International Policy Effects
How Monetary and Fiscal Policies
Affect Exchange Rates
Balance of Payments in the Current
Economic Environment
Graphing Net Export Effect in the
Cause and Effect Chain
Review of homework exercises
Current events related to international trade
and finance
Unit 6 reading and/or vocabulary quizzes
Multiple choice and/or free response exam
Review concepts through FRQ practice
(brainstorming, writing, peer review)
Mock exam
Shmoop review topics and practice activities