Download AP U - cloudfront.net

AP® Macroeconomics
Mr. Latimer
www.clevelandhs.org
JTL [email protected]
Syllabus
AP® Macroeconomics is a one-semester course at the initial college level and is a foundation for possible future
study in economics or business. This semester, we will emphasize the economic principles as applied to the
economy as a whole. Topics discussed will reflect the material for AP Economics Course Description at
www.apcentral.collegeboard.com. Each student is expected to take the AP Macroeconomics Exam that is
administered in May. Students will have ample opportunity to improve their writing, speaking, critical
thinking, and consensus building skills. You will also generate, interpret, correctly label, and analyze graphs,
charts, and data to describe and explain economic concepts. This will be a rigorous course, but it will also be
enjoyable. Hard work and dedication will be essential for success. All homework assignments will be posted
on Cleveland’s webpage.
Textbook
McConnell, Campbell, and Stanley Brue. Economics, 16th ed. McGraw-Hill/Irwin, 2005.
The assigned reading from McConnell and Brue will be referred to as M&B. There will also be assigned
reading from various articles and handouts provided by the teacher.
Grading
Assigned Homework and Class work = 20-40 pts.
Chapter Tests = 25-50 pts.
Projects = 30-50 pts.
Final Exam = 50-70 pts.
Quizzes = 20-30 pts.
Essays and short answers will be written in black ink and follow the MLA Style Guide for quotes and citations.
Everything will be written in your own words and graded on content, use of documentary and supporting
evidence, evidence of critical thinking, grammar, punctuation, and spelling.
FALL TERM
The following readings will be completed before the beginning of the week they will be discussed.
I. General Concepts (8-14%)
Basic Economic Concepts:
A. Scarcity, choice, and opportunity cost
B. Production possibilities curve
C. Comparative advantage, specialization, and trade
D. Economic Systems
E. Property rights and the role of incentives
F. Marginal analysis
List of Key Words or Terms:
Economics, macroeconomics, factors of production, positive economics, normative
economics, scarcity, opportunity cost, model, production possibilities, constant costs, law
of increasing opportunity cost, specialization, terms of trade, factor markets, productive
efficiency, allocative efficiency, private property, incentives, marginal benefit, and
marginal cost.
Key Graphs:
A. Production possibilities curve
B. Circular flow of economic activity
Week 1 (September 9-11, 2009)
M&B Chapters 1 and 2
II. Supply and Demand (15-20%)
The Nature and Functions of Product Markets:
A. Supply and Demand
1. Market equilibrium
2. Determinants of supply and demand
3. Price and quantity controls
4. Elasticity
5. Consumer surplus, producer surplus, and market efficiency
6. Tax incidence and deadweight loss
7. Total utility and marginal utility
8. Utility maximization
9. Individual and market demand curves
10. Income and substitution effects
Key Words or Terms:
Demand, law of demand, quantity demanded, market demanded, substitutes,
complements, normal goods, inferior goods, supply, law of supply, quantity supplied,
market equilibrium, equilibrium price, equilibrium quantity, price level determination,
shortage, surplus, price ceiling, price floor, elastic, inelastic, unit elastic, perfectly elastic,
perfectly inelastic, total revenue, elasticity of supply, consumer surplus, producer surplus,
total economic surplus, market efficiency, taxation, tax incidence, deadweight loss,
marginal utility, law of diminishing marginal utility, marginal utility vs. total utility,
individual demand curve, market demand curve, horizontal summation, substitution
effect, and income effect.
Key Graphs:
A. Demand and supply curves showing equilibrium, shifts of demand/supply
B. Demand and supply curves showing ceilings and floors
C. Demand and supply curves showing consumer surplus/producer surplus
D. Demand and supply curves showing deadweight loss
Week 2 (September 14-18)
M&B Chapters 3 and 4
Test on Chapters 1 – 4 (All tests will include both multiple choice and essay questions)
Essay on Adam Smith: Due Friday, September 25
Week 3 (September 21-25)
M&B Chapter 5
Week 4 (September 28-October 2)
M&B Chapter 6
Test on Chapters 5 and 6
III. Measurements of Economic Performance (10%)
Macroeconomic Measurement and Basic Concepts:
A.
Gross Domestic Product
B.
The Expenditure Approach
C.
The Income Approach
AP Macroeconomics
2
D.
E.
F.
G.
H.
I.
J.
Other National Accounts
Nominal GDP versus Real GDP
Shortcomings of GDP
Economic Growth
The Business Cycle
Unemployment and Inflation
Redistribution Effects on Inflation
Key Words or Terms:
National income accounting, GDP, intermediate goods, final goods, value added,
expenditures approach, income approach, personal consumption expenditures, gross
private domestic investment, net private domestic investment, government purchases, net
exports, national income, indirect business taxes, consumption of fixed capital, net
domestic product, personal income, disposable income, nominal GDP, price index,
economic growth, real GDP per capita, productivity, business cycle, recession, trough,
recovery, labor force, unemployment rate, frictional workers, structural workers,
unemployment, natural rate of unemployment, GDP gap, Okun’s law, inflation, consumer
price index, demand-pull inflation, cost-push inflation, nominal income, real income,
anticipated inflation, cost-of-living adjustments, real and nominal interest rate, deflation,
and hyperinflation.
Key Graphs:
A.
B.
C.
D.
GDP=C+I+G+X aggregate of demand
The real GDP and per capita GDP
The business cycle
Actual and potential GDP and the unemployment rate
Week 5 (October 5-9)
M&B Chapter 7
Week 6 (October 12-16)
M&B Chapter 8
Week 7 (October 19-23)
M&B Chapter 9
Test on Chapters 7 – 9
IV. AS/AD and Fiscal Policy (25%)
Models and Fiscal Policy
A. Consumption and investment schedules
B. Equilibrium
C. Equilibrium versus full-employment GDP
D. International trade
E. The public sector
F. Aggregate Demand and aggregate supply
G. Changes in equilibrium
H. Fiscal policy and the AS-AD model
I. Built-in stability
J. Problems, criticisms, and complications
AP Macroeconomics
3
Key Words or Terms:
Planned investment, investment schedule, aggregate expenditures schedule, equilibrium
GDP, injection, net exports, recessionary gap, inflationary gap, aggregate demandaggregate supply (AS-AD) model, aggregate demand, aggregate supply, long-run
aggregate supply curve, short-run aggregate supply curve, determinates, productivity,
equilibrium real output, efficiency wages, Employment Act of 1946, Council of
Economic Advisors (CEA), expansionary fiscal policy, budget deficit, budget surplus,
full-employment, crowding out effect, and net export effect.
Key Graphs:
A. Investment demand curve
B. Equilibrium GDP
C. Changes in equilibrium GDP
D. Net exports and equilibrium GDP
E. AS-AD Model
F. Recessionary and inflationary gaps
G. Changes in aggregate demand/supply curve
H. Aggregate supply that causes recession/cost-push inflation
I. Expansionary/contractionary fiscal policy
J. Full-employment deficits
K. Long-run aggregate supply curve
L. Short-run aggregate supply curve
Week 8 (October 26-30)
M&B Chapter 10
Week 9 (November 2-6)
M&B Chapter 11
Week 10 (November 9-13)
M&B Chapter 12
Test on Chapters 10 – 12
V. Money, Banking, and Monetary Policy (25%)
A. Functions and supply of money
B. The demand for money
C. The money market
D. The Federal Reserve and the banking system
E. Commercial banks
F. Tools of monetary policy
G. Real GDP and the price level
H. Monetary policy in action
Key Words or Terms:
Medium of exchange, unit of account, token money, Federal Reserve notes, checkable
deposits, near-monies, time deposits, legal tender, transactions demand, asset demand,
money market, Federal Reserve System, Board of Governors, Federal Reserve Banks,
financial services industry, electronic transactions, balance sheets, vault cash, required
services, reserve ratio, excess reserves, actual reserves, Federal funs rate, monetary
multiplier, monetary policy, open-market operations, discount rate, prime interest rate,
velocity of money, and inflationary targeting.
AP Macroeconomics
4
Key Graphs
A. The demand for money
B. Changes in supply
C. Monetary policy
D. AS-AD theory of price level, real output, and stabilization policy
Week 11 (November 16-20)
M&B Chapter 13
Week 12 (November 23-27)
M&B Chapter 14
Week 13 (November 30-December 4)
M&B Chapter 15
Test on Chapters 13 – 15
Essay on John Maynard Keynes: Due December 11
VI. Long-Run Perspectives
A. Short-run and Long-run
B. The extended AD-AS model
C. Inflation-unemployment relationship
D. Long-run Phillips curve
E. Taxation and aggregate supply
F. Productions possibilities analysis
G. U.S. economic growth rates
H. Supply and demand analysis of exports and imports
I. Trade barriers
Key Words or Terms:
Short-run, long-run, Phillips curve, long-run vertical Phillips curve, disinflation, supplyside economics, Laffer curve, supply factors, demand factors, efficiency factor, growth
accounting, labor productivity, infrastructure, human capital, economics of scale, New
Economy, start-up firms, increasing returns, network effects, cost ratio, terms of trade,
gains from trade, world price, domestic price, export supply curve, import demand curve,
tariffs, quotas, strategic trade policy, dumping, and World Trade Organization.
Key Graphs:
A. Short-run and long-run aggregate supply
B. Equilibrium in extended AD-AS model
C. Demand-pull inflation in extended AD-AS model
D. Cost-push inflation and recession in extended AD-AS model
E. The Phillips curve
F. Long-run vertical Phillips curve
G. Inflationary and unemployment rates
H. Production possibilities curve
I. Comparative advantage
J. Trading possibilities line
Week 14 (December 7-11)
M&B Chapter 16
AP Macroeconomics
5
Week 15 (December 14-18)
M&B Chapter 17
Test on Chapters 16 – 17
Winter Break (December 21-January 8, 2010)
VII. International Economies (10%)
The World Economy
A. Financing international trade
B. Balance of payments
C. Exchange rates
D. U.S. trade deficits
E. Economic development
F. The role of government
G. The role of advanced nations
H. Comparative economies
Key Words or Terms:
Open and closed economies, balance of payments, current accounts, balance of goods and
services, trade deficit, trade surplus, capital account, official reserve, flexible exchange
rate system, fixed exchange rate system, purchasing power parity theory, tariffs, quotas,
trade barriers, currency interventions, exchange controls, gold standard, devaluation,
Bretton Woods system, International Monetary Fund (IMF), and managing floating
exchange rates.
Key Graphs
A. Flexible exchange rates
B. Adjustments
C. U.S. trade deficits
Week 16 (January 11-15)
M&B Chapter 37
Week 17 (January 18-22)
M&B Chapter 38
Week 18 (January 25-29)
M&B Chapters 39 and 40
Test on Chapters 37 – 40
Week 19 (February 1-5)
Review: Final Exam
Week 20 (February 8-15)
Final Exam
AP Macroeconomics
6