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AP Macroeconomic Syllabus
Butler Area Senior High School
Scoring Components
Page(s)
SC1 The course provides instruction in basic economic concepts, such as marginal analysis and
opportunity costs.
2
SC2 The course provides instruction in measurement of economic performance, national income
and price level determination.
3,6
SC3 The course provides instruction in unemployment and inflation.
3,4,7
SC4 The course provides instruction in the financial sector.
4
SC5 The course provides instruction in stabilization policies.
7
SC6 The course provides instruction in economic growth and productivity.
4
SC7 The course provides instruction in open economy and international trade and finance.
5
SC8 The course promotes understanding of aggregate economic activity and the critical
evaluation of determinants of economic progress and economic decisions made by policy
makers.
SC9 The course teaches students how to generate charts and graphs to describe economic
concepts.
SC10 The course teaches students how to interpret and analyze charts, graphs and data to
describe economic concepts.
5,6
3,6
3,4,5
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AP Macroeconomic Syllabus
Butler Area Senior High School
Course Description:
The purpose of the AP course in macroeconomics is to give students a thorough understanding of
the principles of economics that apply to an economic system as a whole. The course places
particular emphasis on the study of national income and price-level determination, and also
develops students’ familiarity with economic performance measures, the financial sector,
stabilization policies, economic growth, and international economics.
The course is designed as an initial college-level course in macroeconomics and as a foundation for
possible future study in economics or business. Students’ second goal of the course is to prepare for
the AP Exam. The exam will take place in May. Passing the exam will result in college credit at
almost all colleges and universities. Throughout the course, students will have ample opportunity to
improve their writing, speaking, critical-thinking, and consensus-building skills.
Textbook:
Mankiw, N. Gregory. Principles of Economics. 7th ed. Mason, OH: South-Western Cengage
Learning, 2015.
Workbook:
Morton, John. Advanced Placement Economics: Macroeconomics Student Activities, 3rd ed. New
York: National Council on Economic Education, 2003.
Additional Readings:
Wall Street Journal
New York Times
Magazine Articles
Course Outline:
Unit I: Basic Economic Concepts:
[SC1] & [SC10] (Chapters 1-6) (4 Weeks)
A. Scarcity, choice, and opportunity cost
B. Circular Flow Model and the Production Possibilities Frontier
C. Comparative advantage, specialization, and exchange
D. Demand, Supply, and Market equilibrium
E. Price Elasticity of Supply and Demand
F. Price Ceilings and Price Floors
SC1 – The course provides
instruction in basic economic
concepts, such as marginal
analysis and opportunity
costs.
List of Key Concepts and Graphs
Key Concepts: 10 principles of economics, thinking like an economist, scarcity, trade-offs,
opportunity costs, incentives, the invisible hand, marginal thinking, the scientific method, circular
flow model, production possibilities, micro vs. macro, positive vs. normative analysis,
specialization and trade, absolute advantage, comparative advantage, markets and competition,
Demand, supply, market equilibrium, determinants of supply and demand, shifts in supply and
demand with effects on equilibrium price and quantity, elasticity of supply and demand, price
ceilings and price floors. [SC 1].
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AP Macroeconomic Syllabus
Butler Area Senior High School
Graphs/Models: [SC9] [SC10]
 Productions Possibilities Frontier
 Circular Flow Diagram
 Demand Curve, Supply Curve, The Equilibrium of Supply and
Demand
 Shifts in Supply and Demand
Web Resources:
http://www.councilforeconed.org
http://www.reffonomics.com
SC9—The course teaches
students how to generate
charts and graphs to describe
economic concepts.
SC10—The course teaches
students how to interpret
and analyze charts, graphs
and data to describe
economic concepts.
Activities:
Morton. Advance Placement Economics, Activities 1-8.
Mankiw, Principles of Macroeconomics, Chapters 1-6 Questions for Review, Multiple
Choice, Problems and Applications.
Unit II: Measurement of Economic Performance:
[SC2] (Chapters 10-12,15) (3 Weeks)
A. Measuring a Nation’s Income
1. The Economy’s Income and Expenditure
2. The Components of GDP
3. Real vs. Nominal GDP
4. Is GDP a Good Measure of Economic Well-Being?
B. Measuring the Cost of Living
1. The Consumer Price Index
2. Correcting Economic Variables for the Effects of Inflation
C. Definition of economic growth [SC6]
D. Productivity: It's Role and Determinants
1. Investment in human capital
2. Investment in physical capital
3. Economic Growth and Policy
E. Unemployment [SC3]
1. Identifying Unemployment
2. Types of unemployment
3. Natural rate of unemployment
SC2—The course provides
instruction in measurement
of economic performance,
national income and price
level determination.
SC6—The course provides
instruction in economic
growth and productivity.
SC3—The course provides
instruction in unemployment
and inflation.
List of Key Concepts and Graphs
Key Concepts: microeconomics, macroeconomics, gross domestic product, consumption,
investment, government purchases, net exports, nominal GDP, real GDP, GDP deflator, consumer
price index, inflation rate, producer price index, indexation, nominal interest rate, real interest rate,
labor force, unemployment rate, labor-force participation rate, natural rate of unemployment,
cyclical unemployment, discouraged workers, frictional unemployment, structural unemployment,
job search, unemployment insurance, union, collective bargaining, strike, efficiency wages,
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AP Macroeconomic Syllabus
Butler Area Senior High School
productivity, physical capital, human capital, natural resources, technological knowledge,
diminishing returns, catch-up effect.
Graphs/Models: [SC10]
 Circular Flow Diagram
 Real GDP in the U.S.
 Measures of Inflation
 Real and Nominal Interest Rates
 Unemployment Rate Since 1960
 Labor Force Participation
 Minimum Wage / Unemployment
 The Production Function
 Human Capital Investment
SC10—The course teaches
students how to interpret
and analyze charts, graphs
and data to describe
economic concepts.
Web Resources:
http://www.reffoconomics.com
http://www.bls.gov
http://www.councilforeconed.org
http://www.econedlink.org
Activities:
Morton. Advance Placement Economics, Activities 10-17, 47.
Mankiw, Principles of Macroeconomics, Chapters 10, 11, 12 and 15 Questions for Review,
Multiple Choice, Problems and Applications.
Unit III: Financial Sector
[SC4] (Chapters 16,17) (3 Weeks)
A. The Monetary System
1. The meaning of money
2. The Federal Reserve System
3. Banks and the money supply
4. The Fed's tools of monetary control
B. Money Growth and Inflation [SC3]
1. Classical theory of inflation
2. The costs of inflation
SC4—The course provides
instruction in the financial
sector.
SC3—The course provides
instruction in unemployment
and inflation.
List of Key Concepts and Graphs
Key Concepts: money, medium of exchange, unit of account, store of value, liquidity, commodity
money, fiat money, currency, demand deposits, Federal Reserve, central bank, money supply,
monetary policy, reserves, fractional-reserve banking, reserve ratio, money multiplier, bank capital,
leverage, leverage ratio, capital requirement, open-market operations, discount rate, reserve
requirements, federal funds rate, quantity theory of money, nominal variables, real variables,
classical dichotomy, monetary neutrality, velocity of money, quantity equation, inflation tax, Fisher
effect, shoeleather costs, menu costs.
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AP Macroeconomic Syllabus
Butler Area Senior High School
Graphs/Models: [SC10]
 Supply and Demand for Money Determine Equilibrium Price
 An Increase in the Money Supply
 Nominal GDP, the Quantity of Money, and the Velocity of Money
 Money and Prices During Four Hyperinflations
 The Nominal Interest Rate and the Inflation Rate
Web Resources:
http://www.councilforeconed.org
http://www.reffonomics.com
http://www.federalreserve.gov
SC10—The course teaches
students how to interpret
and analyze charts, graphs
and data to describe
economic concepts.
Activities:
Morton. Advance Placement Economics, Activities 34-39.
Mankiw, Principles of Macroeconomics, Chapters 16 and 17 Questions for Review, Multiple
Choice, Problems and Applications.
Unit IV: Open Economy: International Trade and Finance
[SC7] (Chapter 18,19) (2 Weeks)
A. Balance of payments accounts
1. Balance of trade
SC7—The course provides
2. Current account
instruction in open
3. Financial account
economy and international
trade and finance.
B. Foreign exchange market
1. Demand for and supply of foreign exchange
2. Exchange rate determination
3. Currency appreciation and depreciation
C. Imports, exports, and capital flows
D. Relationships between international and domestic financial and goods markets
List of Key Concepts and Graphs
Key Concepts: closed economy, open economy, exports, imports, net exports, trade balance, trade
surplus, trade deficit, balanced trade, net capital outflow, nominal exchange rate, appreciation,
depreciation, real exchange rate, purchasing-power parity, trade policy, capital flight [SC8].
Graphs/Models:
 Internationalization of U.S. Economy
 National Saving, Domestic Investment, and Net Capital Outflow
 The Market for Loanable Funds
 The Market for Foreign-Currency Exchange
SC8—The course promotes
 How Net Capital Outflow Depends on the Interest Rate
understanding of aggregate
 The Real Equilibrium in an Open Economy
economic activity and the
critical evaluation of
determinants of economic
progress and economic
decisions made by policy
makers.
5
AP Macroeconomic Syllabus
Butler Area Senior High School



The Effects of Government Budget Deficit
The Effects of an Import Quota
The Effects of Capital Flight
Web Resources:
http://www.reffoconomics.com
http://www.councilforeconed.org
http://www.econedlink.org
Activities:
Morton. Advance Placement Economics, Activities 49-55.
Mankiw, Principles of Macroeconomics, Chapters 18 and 19 Questions for Review, Multiple
Choice, Problems and Applications.
Unit V: National Income and Price Determination
[SC2] (Chapter 20,21) (3 Weeks)
A. Aggregate demand
1. Determinants of aggregate demand
2. Multiplier and crowding out effects
B. Aggregate supply
1. Short-run and long-run analyses
2. Sticky vs. flexible wages and prices
3. Determinants of aggregate supply
C. Macroeconomic equilibrium
1. Real output and price level
2. Short and long run
3. Actual vs. full employment output
4. Business cycle and economic fluctuations
SC2—The course provides
instruction in measurement
of economic performance,
national income and price
level determination.
List of Key Concepts and Graphs
Key Concepts: recession, depression, model of aggregate demand and aggregate supply, aggregate
demand curve, aggregate supply curve, natural level of output, stagflation, theory of liquidity
preference, fiscal policy, multiplier effect, crowding-out effect, automatic stabilizers. [SC8]
Graphs/Models:
 Economic Fluctuations
SC8—The course promotes
understanding of aggregate
 Aggregate Demand and Aggregate Supply Curves
economic activity and the
 Long-Run and Short-Run Aggregate Supply Curves
critical evaluation of
 Long-Run Growth and Inflation in the Model of Aggregate
determinants of economic
Supply and Demand
progress and economic
decisions made by policy
 The Long-Run Equilibrium
makers.
 A Contraction in Aggregate Demand
 Real GDP Growth since 1900
 Adverse Shift in Aggregate Supply [SC9]
SC9—The course teaches
students how to generate
charts and graphs to describe 6
economic concepts.
AP Macroeconomic Syllabus
Butler Area Senior High School
Web Resources:
http://www.reffoconomics.com
http://www.councilforeconed.org
Activities:
Morton. Advance Placement Economics, Activities 20-29.
Mankiw, Principles of Macroeconomics, Chapters 20 and 21Questions for Review, Multiple
Choice, Problems and Applications
Unit VI: Inflation, Unemployment, and Stabilization Policies
[SC3] & [SC5] (Chapter 22,23) (3 Weeks)
A. Fiscal and monetary policies
1. Demand-side effects
2. Supply-side effects
3. Policy mix
4. Government deficits and debts
B. The Phillips curve
1. Short-run and long-run Phillips curves
2. Demand-pull vs. cost-push inflation
3. Role of expectations
SC3—The course provides
instruction in unemployment
and inflation.
SC5—The course provides
instruction in stabilization
policies.
List of Key Concepts and Graphs
Key Concepts: Phillips curve, natural-rate hypothesis, supply shock, sacrifice ratio, rational
expectations.
Graphs/Models:
 The Phillips Curve
 Aggregate Supply and Demand
 Long-Run Phillips Curve
 Inflation Shifts the Short-Run Phillips Curve
Web Resources:
http://www.councilforeconed.org
http://www.reffonomics.com
http://www.federalreserve.gov
Activities:
Morton. Advance Placement Economics, Activities 43-46.
Mankiw, Principles of Macroeconomics, Chapters 22 and 23 Questions for Review, Multiple
Choice, Problems and Applications.
7
AP Macroeconomic Syllabus
Butler Area Senior High School
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