Download AP Macroeconomics Syllabus AP Macroeconomics is a one

AP Macroeconomics
Syllabus
AP Macroeconomics is a one semester course that prepares students to pass the AP
exam. The class meets five days a week. The beginning activity each day is a group
five minute discussion of economic news. The main instructional method is lecture with
questions and class discussion. Some class time is devoted to worksheets especially
for students to illustrate their understanding by graphing correctly. There will be a test
grade after each unit. Each test will contain multiple choice and free response
questions. Most of the free response questions require graphing.
Textbook – Economics, 15th edition McConnell-Brue. McGraw-Hill/Irvin 2002
Workbook – Advanced Placement Economics. Macroeconomic Student Activities.
National Council on Economic Education 1996.
Video series – Economics USA
CR1
CR9
CR9
I. Introduction to economics – 15 days
A. Why study economics
1. scarcity
2. principles of capitalism
3. basic economic terms and concepts
4. functions of money
5. value
B. economic decision making
1. human want
2. factors of production
3. how choices are made
a. alternative cost
b. production possibilities
4. serving the needs of society
a. market economy
b. command economy
c. traditional economy
d. circular flow chart
C. Demand, Supply, Pricing and Markets
1. law of demand
2. diminishing marginal utility
3. change in the quantity demanded
4. determinants of demand
5. elasticity of demand
6. supply
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CR2
CR3
CR5
CR3
CR9
CR3
CR9
a. law of supply
b. elasticity of supply
c. costs
d. determinants of supply
e. law of variable proportions
7. price determinants
8. shortages and surpluses
9. government pricing
10. economic markets
11. market failure
II. GDP and National Income Accounting – 7 days
A. GDP – what counts?
B. shortcomings of GDP
C. two approaches to GDP
1. expenditures
2. income
3. other national accounts
D. nominal vs. real GDP
E. consumer price index
III. Business cycles, unemployment and inflation – 7 days
A. business cycles and their causes
B. business cycle indicators
C. unemployment
1. Great Depression
2. determining the unemployment rate
3. criticism of the unemployment rate
4. types of unemployment
5. the GDP gap and Okun’s Law
D. inflation
1. meaning and measurement
2. disinflation
3. deflation
4. history of US inflation
5. CPI and its criticisms
6. consequences of inflation
7. rule of 70
8. demand-pull
9. cost-push
10. Illustrations
a. AS short run
b. AS long run
IV. The Keynesian model and the multiplier – 8 days
A. Classical theory vs. Keynesian revolution
B. Say’s law
C. The General Theory
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D.
E.
F.
G.
H.
I.
J.
K.
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the consumption function
MPC and MPS
determinants of consumption and savings
investment expenditures
1. classical vs. Keynes
2. investment demand curve
3. why investment is unstable
aggregate expenditures function
the multiplier
the balanced budget multiplier
equilibrium vs. full employment GDP
1. recessionary gap
2. inflationary gap
V. Aggregate Demand and Aggregate Supply
A. aggregate demand defined
1. factors affecting AD
2. derivation of the AD curve from the AE model
3. determinants of AD – graphing and shifting
B. aggregate supply defined
1. three ranges of the AS curve – in-depth analysis of each
2. determinants of AS – graphing and shifting
C. equilibrium
1. changes in equilibrium
2. ratchet effect
a. causes
b. controversy
VI. Fiscal policy – 6 days
A. legislative mandate
B. discretionary fiscal policy
1. expansionary
2. contractionary
3. remember the multiplier
4. financing deficits
5. disposing of surplus
6. debt retirement vs. idle surplus
C. non-discretionary fiscal policy
1. stabilizers
2. examples
D. problems with fiscal policy
1. timing
2. political
3. expansionary bias
4. crowding out effect
5. fiscal policy in the open economy
6. net export effect
E. supply-side fiscal policy
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CR4
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CR8
1. shifting AS to the right
a. tax cuts
b. less regulation
2. mainstream skepticism
VII. Money, the Fed and Monetary Policy
A. money
1. M1, M2, M3
2. stabilizing
3. demand for money
B. The Federal Reserve
1. Board of Governors
2. FOM C
3. 12 federal reserve banks
4. fed functions
C. money multiplier
D. how banks create money
E. monetary policy
1. objectives
2. tools
a. open market operations
b. reserve ration
c. discount rate
d. fed funds rate
F. monetary policy, real GDP and the price level
1. easy money policy
2. tight money policy
3. policy effectiveness
a. strengths
b. problems
i. cyclical asymmetry
ii. changes in velocity
4. the international economy – net exports effect
G. Monetarists vs. Keynesians
VIII. International Trade – 7 days
A. specialization and economic interdependence
B. absolute advantage
C. comparative advantage
D. balancing payments and trade
E. US trade deficit
F. foreign markets and the value of currencies
G. trade barriers
H. free trade vs. protectionism
I. international trade agreements
IX. Controversy in macroeconomics – 8 days
A. extending the analysis of AS
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1. short run, long run
2. equilibrium in the extended AD-AS model
B. applying the extended AD-AS model
1. inflation
2. recession
C. the Phillips Curve
1. stagflation
2. adverse supply shocks
D. natural-rate hypothesis
1. Adaptive expectations theory
2. short run – long run Phillips Curve
E. rational expectations theory
F. supply-side economics
G. classical vs. Keynes
H. causes of macro instability
1. mainstream view.
2. monetarists MV=PQ
3. real business cycle view
I. self-correction
1. new classical view
2. mainstream view
3. monetary rule
4. defense of discretionary stabilization
X. Economic Growth
A. ingredients of growth
B. growth and production possibilities
C. growth in the US
1. accounting for growth
2. detriments to growth
D. growth policies
Review of released AP Macroeconomics Exams – 3 days
Resources and Assignments by Units
CR2
CR9
I. Introduction to Economics
McConnell-Brue – chapters 1-5
Video Economics USA – Resources and Scarcity;
Markets and Prices
Morton workbook
Activity 1 pages 1-7 – production possibilities graphing
Activity 6 pages 37-38 – pages 37-38 – circular flow
Activity 2 pages 9-12 – demand curves and shifting
Activity 3 pages 13-15 – supply curves and shifting
Page 27 – essays and graphing
II. GDP and National Income Accounting
CR2
CR3
CR5
CR9
McConnell-Brue – chapter 7;
Study questions 8, 9, 12, 13
Morton workbook
Activity 9 pages 47-48 – GDP: what counts
Activity 10 pages 49-53 – GDP and its cousins
III. Business cycles, unemployment and inflation
McConnell-Brue – chapter 8
Video Economics USA – Booms and Busts;
Inflation
Morton workbook
Activity 8 pages 40-45 – CPI, adjusting nominal to real GDP
Activity 12 pages 57-58 – who is helped or hurt by inflation
Activity 13 page 59 – types of unemployment
IV. The Keynesian Model and the Multiplier
McConnell-Brue – chapters 9 and 10
Video Economics USA – John Maynard Keynes
Morton workbook
Activity 23 pages 99-100 – classical and Keynesian views of the economy
Activity 25 page 101 – what is MPC?
Activity 26 pages 107-109 – graphing investment
Activity 27 pages 111-112 – magic of the multiplier
V. Aggregate Demand and Aggregate Supply
McConnell-Brue – chapter 11
Morton workbook
Activity 16 pages 79-80 – AD graphing and shifting
Activity 17 pages 81-82 – short run AS graphing
Activity 18 pages 83-86 – graphing equilibrium price level and output;
graphing price level and real GDP
Page 133 – essay questions;
AD-AS graphing
CR5
CR4
CR5
VI. Fiscal Policy
McConnell-Brue – chapter 12
Video Economics USA – fiscal policy
Morton Workbook
Activity 30 page 117 – discretionary and automatic stabilizers
Activity 31 pages 119-120 – tools of fiscal policy
Activity 32 pages 111-112 – two ways to analyze fiscal policy
Activity 35 pages 123-125 – analyzing the macroeconomy
VII. Money, the Fed and Monetary Policy
McConnell-Brue – chapters 13, 14 and 15
Video Economics USA – the banking system;
The Federal Reserve
monetary policy
Morton workbook
Activity 36 pages 147-149 – monetary equation of exchange
Activity 37 pages 151-152 – multiple expansion of demand deposits
Activity 38 pages 153-155 – reserve requirement and the multiplier
Activity 39 pages 157-160 – the Fed and monetary policy
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CR9
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CR8
VIII. International Trade
McConnell-Brue – chapters 6, 37, 38
Video Economics USA – international trade
Morton workbook
Activity 55 pages 229-230 – the Iowa car crop
Activity 56 pages 231-234 – determining comparative advantage
Activity 57 pages 235-236 – gain from international trade
Activity 58 pages 237-239 – economic efficiency and the gains from trade
Activity 59 pages 241-242 – barriers to trade
Activity 60 pages 243-246 – imbalance of payments
Activity 61 pages 247-248 – using foreign exchange rates
Activity 62 pages 249-250 – using supply and demand to analyze exchange
rates
Activity 63 pages 251-252 – the international efforts of monetary and fiscal
policies
Activity 64 pages 253-254 – the international way of thinking
IX. Controversy in Macroeconomics
McConnell-Brue – chapters 16-19
Morton workbook
Activity 49 pages 201-202 – supply-side economics, budget deficits and tax
changes
Activity 50 page 203 – analyzing short-run and long-run effects of monetary
and fiscal policies
Activity 51 pages 205-208 – why economists disagree
Activity 52 pages 209-211 – sorting out macroeconomic theories
Activity 53 page 213 – graphing macroeconomic theories
Activity 54 page 215 – what should a president do?
X. Economic Growth
McConnell-Brue – chapter 17
Morton workbook
Activity 46 pages 193-196 – economic growth and the determinants of
productive capacity
Activity 47 pages 197-198 – expansion of the 1960s