Download AP-Macroeconomics Syllabus

Advanced Placement Macroeconomics – Syllabus
Program: AP Macroeconomics is offered as an alternative to the required economics course that
all Michigan students must take to graduate high school. Student selection into AP
Macroeconomics is based on the individual’s enthusiasm for the subject matter as well as their
ability, willingness, and self-discipline to do the amount of reading and additional work required of
the AP Macroeconomics course.
Type of School: Public
Class Size: 30-35 students
Total Enrollment: 2085 students (2008 numbers)
Ethnic Diversity: 87% Caucasian, 9% African-American, 2% Asian, 1% Hispanic, 1%other
Advanced Placement Population: Approximately 11% of all students take one or more AP
class.
Goals of Advanced Placement Macroeconomics: The overall long term goal of the AP
Macroeconomics class is to build a strong foundation in aiding student comprehension of
economic concepts such as scarcity, opportunity cost, trade-offs, economic growth, aggregate
macroeconomic analysis, money, banking, monetary policy, fiscal policy, and international
economic concepts. This course places enormous emphasis on graphing and data/chart analysis,
specific objectives regarding graphing is listed within each unit objectives. The course promotes
the understanding of aggregate economic activity; the utilization of resources within and across
countries; and the critical evaluation of determinants of economic progress and economic
decisions made by policymakers (AP 2009). The immediate goal of AP Macroeconomics is to
prepare students for the AP Macroeconomic test in May.
Course Design: AP Macroeconomics is an academic course taught in the fall semester (18 weeks).
Each class period consists of fifty-six minutes of instructional time.
Assessment and Evaluation: All student readings and practice problems will be drawn directly
from the supplemental material listed below, AP Macroeconomic website, textbook and
corresponding workbooks. Interpreting, analyzing, labeling, and generating graphs, charts, and
data to explain economic concepts is a major focus of the evaluation of this course. Formal
assessments will be similar to the Advanced Placement Test. Tests will include both multiple
choice and free-response portions modeled to flow as the AP Test will. Most exams will take place
in fifty minutes with 27 minutes allotted for 25 multiple choice questions and 23 minutes allotted
for one free response question. Units that are more heavily weighted on the AP Test will be
assessed with an exam that spreads over two days , with day one consisting of multiple choice
questions and day two consisting of free-response questions.
Additional Assessments:
Students will be also evaluated on their contribution to the class through attendance and ability to
work within a group to debate current economic issues. Students will also be asked to keep an
economic journal in which they collect articles as they relate to the economy and interpret the
article with a graph, whenever possible. Additional forms of assessment will be through quizzes,
homework assignments, nightly readings, and current event projects.
Class Breakdown – Grades
Semester Evaluation of grades will be assessed on the following:
First Card Marking
40%
Second Card Marking
40%
Final Exam
20%

The final exam will reflect the style and expectations of AP College Board
Marking Periods will be broken down as follows:
Tests
Other Graded Assignments/ Participation
60%
40%
Course Materials:
Text and Workbook
Mankiw, Gregory N. Principles of Economics, 5th edition. Mason, Ohio: South-Western Cengage
Learning, 2008.
Morton, John S. and Rae Jean B. Goodman. Advanced Placement Economics, Teacher Manual and
Student Activities, 3rd Edition, New York National Council on Economic Education, 2003.
http://holtmcdougal.hmhco.com/hm/detail.htm?ID=1007500000073412 - Textbook Website
Supplements
Articles from Wall Street Journal, Business Week, The Economist, and Financial Times
Books including: Capstone: Exemplary Lessons for High School Economics, An Inquiry into the
Wealth of Nations, Fatal Equilibrium, Naked Economics, Saving Adam Smith, Travels of a T-Shirt in
a Global Economy
Media including: Commanding Heights: Battle for the World Economy, Economics U$A videos,
John Stossel’s: Macroeconomic Video Clips
Websites including http://www.aplia.com, http://highered.mcgraw-hill.com, www.bls.gov,
http://www.ers.usda.gov/Data/Macroeconomics/, http://www.federalreserve.gov/,
http://pages.stern.nyu.edu/~nroubini/WEBLINKS.HTM, additional websites will be used as they
become available and the instructor is made aware of.
Breakdown of Units, Graphical Expectations, Time Allotment - parentheses indicates the amount
of the AP exam that is for each topic, and Free-Response Questions
UNIT 1: Introduction to Economics (8-12%)
6-8 class periods
Chapter 1: Ten Principles of Economics
Scarcity – Economics – Opportunity Costs – Incentive – Trade-Offs – Thinking at the Margin –
Market Economy – Property Rights – Externality – Inflation – Business Cycle
Chapter 2: Thinking Like An Economist
Illustration of the Circular Flow Model – Production Possibilities Frontier –Normative Statements –
Positive Statements
Chapter 3: Interdependence And The Gains From Trade
Trade – Absolute Advantage – Comparative Advantage – Specialization – Opportunity Cost – Imports –
Exports
Chapter 25: Production and Growth (5-10%)
Productivity – Human Capital – Physical Capital – Natural Resources – Technological Knowledge –
Diminishing Returns – Catch-Up Effect
UNIT 1: Charts, Graphs, Data
1. Construct and interpret a production possibilities frontier
2. Define and calculate absolute and comparative advantages for production exchange
3. Illustrate and explain a basic circular flow model
4. Define productivity
5. Illustrate and explain growth using a production possibilities curve
6. Evaluate current growth trends in the U.S. and other foreign countries
Activities:
The following are a list of simulations that will be used to foster a clear understanding of the most basic
economic concepts and to engage students in economics.
1. Thinking at the Margin and Opportunity Cost – What to Order? Using restaurant menus students
place orders and then apply marginal thinking and opportunity cost to the situation
2. Circular Flow – Adopted from AP Sample Syllabus #2
3. Property Rights – Gone Fishing (a Common Sense Economics Lesson)
4. Benefits from Trade – Adopted from AP Sample Syllabus #2
Possible Free-Response Questions From Released Items:
2009: Question 2 part C
2008: Question 3
UNIT 2: Supply and Demand (inclusive of the above 8-12%)
4-5 class periods
Chapter 4:
The Market Forces of Supply And Demand
Market – Law of Demand – Quantity Demanded – Determinates of Demand – Normal Goods –
Inferior Goods – Substitutes – Complements – Law of Supply – Quantity Supplied –
Determinates of Supply – Shifts in Supply and Demand – Equilibrium – Surplus – Shortage
UNIT 2: Charts, Graphs, Data
1. Illustrate and correctly label a demand/supply graph
2. Evaluate the law of demand and the law of supply
3. Show changes in demand/supply
4. Illustrate the difference between a change in quantity demanded/supplied versus a change in
demand/supply
5. Illustrate and evaluate the effects of a price ceiling and price floor
6. Illustrate equilibrium price and quantity
7. Illustrate and explain changes in equilibrium price and quantity due to shifting demand or supply
curves.
Possible Free-Response Questions From Released Items:
Applicable questions from the AP microeconomics exam: For example from the 2006 exam, question 3:A
UNIT 3: Money and the Financial Sector (15-20%)
13-15 class periods
Chapter 26: Saving, Investment, and the Financial System
Financial Markets – Bond – Stock – Financial Intermediaries – Mutual Funds – Private Savings –
Public Savings – Budget Surplus – Budget Deficit – Market for Loanable Funds –Crowding Out –
Discretionary Spending – Mandatory Spending
Chapter 27: The Basic Tools of Finance
Present Value of Money – Future Value of Money – Compounding – Diversification
Chapter 29: The Monetary System
Money – Medium of Exchange – Unit of Account – Store of Value – Liquidity – Commodity Money –
Fiat Money – Currency – Demand Deposits – Federal Reserve – Money Supply – Monetary Policy –
Fractional Reserve Banking – Reserve Requirement – Money Multiplier – Open Market Operations –
Discount Rate – Federal Funds Rate
UNIT 3: Charts, Graphs, Data
1. Calculate, explain and analyze real versus nominal interest rates
2. Define and calculate M1, M2 and M3.
3. Explain and calculate the purchase power of the dollar.
4. Illustrate, explain and analyze the relationship between the demand for money and the money
market
5. Calculate and explain the money multiplier.
6. Explain the quantity theory of money and its equation
7. Illustrate, explain and analyze the relationships between the amount of money demanded and
supplied, amount of investment, and equilibrium GDP with respect to easy or tight money policies
Possible Free-Response Questions From Released Items:
2009: Question 1 parts C,D
2009: Question 2 part B
2009: Question 3 parts A,B
2008: Question 1 part D
2007: Question 1 part A
2007: Question 2
2006: Question 2
2005: Question 1 parts C,D,E
2005: Question 2
2004: Question 1 parts B,C
2004: Question 3
UNIT 4: Macroeconomics (12-16%)
17-19 class periods
Chapter 23: Measuring a Nation’s Income
Microeconomics – Macroeconomics – Circular Flow Diagram – Gross Domestic Product (GDP) –
Consumption – Investment – Government Purchases – Net Exports – Nominal GDP – Real GDP –
GDP Deflator
Chapter 28: Unemployment
Labor Force – Calculation of the Unemployment Rate – Labor Force Participation Rate –
Natural Rate of Unemployment – Cyclical Unemployment –Frictional Unemployment –
Structural Unemployment – Seasonal Unemployment – Discouraged Worker – Union – Strike –
Collective Bargaining – Unemployment Insurance – Effect of Minimum Wage Laws
Chapter 24: Measuring the Cost of Living
How to Calculate the Consumer Price Index (CPI) – Producer Price Index (PPI) – Inflation Rate –
Problems with the CPI – Deflation – Real Interest Rate – Nominal Interest Rate – Cost-push Inflation –
Demand-pull Inflation
Chapter 30: Money Growth and Inflation
Quantity Theory of Money – Velocity of Money – Inflation Tax – Money Demand – Fisher Effect –
Purchasing Power – Costs of Inflation – Menu Costs
Chapter 33: Aggregate Demand and Aggregate Supply
Business Cycle – Recession – Depression – Aggregate Demand – Aggregate Supply –
Long-run v. Short-run Aggregate Supply – Determinates of Aggregate Demand –
Determinates of Aggregate Supply – Sticky-Wage Theory – Sticky-Price Theory –
Misperceptions Theory – Stagflation – Flexible-Price Theory – Flexible-Wage Theory
UNIT 4: Charts, Graphs, Data
1. Explain the components of GDP and create GDP equations
2. Calculate GDP using expenditure and income approach
3. Explain the shortcomings of GDP measurements
4. Define and change Nominal GDP (NGDP) to Real GDP (RGDP).
5. Inflate and deflate nominal GDP
6. Define, explain and evaluate unemployment rate
7. Categorize types of unemployment
8. Explain and measure inflation
9. Calculate nominal and real inflation rates
10. Calculate and evaluate CPI and PPI
11. Illustrate and explain demand-pull and cost-push inflation
12. Illustrate and describe the four phases of the business cycle
13. Illustrate, explain and evaluate aggregate demand and supply
14. Illustrate and explain the determinates of AD and AS
15. Analyze macroeconomic equilibrium shifts
Possible Free-Response Questions From Released Items:
2009: Question 1 part E
2007: Question 3
2006: Question 1 part A,B
2006: Question 3 part B
2005: Question 1 part A, E
2005: Question 2 part C
20o5: Question 3 part B
2004: Question 1 part A,D,E,F
UNIT 5: Government (20-30%)
20-22 class periods
Chapter 34: The Influence of Monetary and Fiscal Policy on Aggregate Demand
The Wealth Effect – The Interest Effect – The Exchange Rate Effect – Money Markets –
Theory of Liquidity Preference – Changes in the Money Supply – Fiscal Policy –
Spending Multiplier – Marginal Propensity to Consume (MPC) – Crowding Out Effect –
Keynesian Policy – Automatic Stabilizers – Balanced Budget Multiplier
Chapter 35: The Short-Run Trade-off between Inflation and Unemployment
Phillips Curve – Natural-Rate Hypothesis – Supply Shock – Costs of Reducing Inflation
UNIT 6: Charts, Graphs, Data
1. Illustrate, explain and analyze expansionary and contractionary fiscal policy
2. Illustrate and explain automatic stabilizers and the full-employment budget.
3. Illustrate and explain the effects of crowding out
4. Illustrate and explain the supply-side effects of fiscal policy
5. Illustrate and explain the Phillips curve short and long run
6. Illustrate and explain the Laffer curve
7. Calculate and explain average and marginal propensities to consume and save
8. Illustrate and explain the multiplier effect
Possible Free-Response Questions From Released Items:
2009: Question 1 parts A,E,F
2009: Question 3 part C
2008: Question 1 parts A,B,C
2007: Question 1 parts D,E
2006: Question 3 parts A,C
2005: Question 1 part C
2005: Question 3
2004: Question 2 part A
UNIT 6: Open Economy (10-15%)
12-14 class periods
Chapter 9: Application: International Trade
Benefits of International Trade – Arguments for Restricting Trade
Chapter 31: Open-Economy Macroeconomics: Basic Concepts
Exports – Imports – Net Exports – Trade Balance – Trade Surplus – Trade Deficit – Appreciation –
Depreciation – Nominal Exchange Rate –Real Exchange Rate – Purchasing Power Parity
Chapter 32: A Macroeconomic Theory of the Open Market
Market for Loanable Funds – Market for Foreign-Currency Exchange – Net Capital Outflows – Trade
Policy – Capital Flight – Trade Quota – Tariff
UNIT 6: Charts, Graphs, Data
1. Illustrate and evaluate terms of trade and potential gains from trade
2. Illustrate and determine world price
3. Analyze supply and demand of exports and imports
4. Distinguish an open from closed economy
5.
6.
7.
8.
9.
Illustrate and define the impact of trade barriers (tariffs and quota)
Explain and calculate current and capital accounts
Calculate a balance of payments
Define exchange rate
Illustrate the market for foreign currency.
Possible Free-Response Questions From Released Items:
2009: Question 2 parts A,B
2008: Question 2 parts A,B,C
2007: Question 1 parts B.C
2006: Question 1 parts D,E
2005: Question 1 parts B,C
2005: Question 2 part D
2004: Question 2 parts B,C
Considering this course is to be taught in the fall semester only, there will be four – six
review sessions prior to the AP exam in May. Students should make a point to attend at
least four of the review sessions. Morning and afternoon review sessions will be held to
accommodate student schedules. At least one of the review sessions will be held on a
Saturday closer to the AP Test.
Tentative Calendar
These are the intended weeks and units and do take into account testing, conferences, and an
breaks. However some days could be eliminated due to weather or other unforeseen incidents.
Since the AP exam will not be postponed, students and the teacher must stay on this schedule to
maximize background.
Week
9/7 –
9/11
9/149/18
9/219/25
9/2810/2
10/510/9
10/1210/16
10/1910/23
10/2610/30
11/211/6
11/9-
Begin Unit 1 – Introduction to Economics
Finish Unit 1 – Review for one day and test one day (Friday)
Unit Two – Supply and Demand
Begin Unit Three – Money and the Financial System
Unit Three
Finish Unit Three- Review for one day and test over two days
Begin Unit Four – Macroeconomics
Unit Four
Unit Four
Finish Unit Four – Review for one day and test over two days
11/13
11/16Begin Unit Five – Government in the Economy
11/20
11/23-27 Unit Five (25th, 26th, 27th off for Thanksgiving)
11/3012/4
12/712/11
12/1412/18
12/211/1/2010
1 /4 –
1/8
1/111/15
1/181/22
Unit Five
Unit Five
Complete Unit Five – Review for one day and test over two days
WINTER BREAK
Begin Unit Six – International Trade
Unit Six
Finish Unit Six – Review for one day and test over one day. Also review for the final exam that
will take place the first week of February and accounts for 20% of the students grade.