Download By the end of this chapter, students will be able to

Syllabus
AP Macroeconomics
Amanda Okrutny
2013-2014
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more
powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe
themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.
–John Maynard Keynes
Course Overview
AP Economics is taught as a full year course. The aim of AP Economics is to provide students
with a learning experience that is equivalent to that obtained in a typical college-level
introduction to economics course.
AP Macroeconomics is designed to provide students with a thorough understanding of the
principles of economics that apply to the economic system as a whole. AP Macroeconomics
emphasizes the study of national income, economic performance measures, economic growth
and international economics. Students learn to think like economists: to question, to evaluate
marginal costs and marginal benefits, and to explore that many ways in which one action
causes secondary actions.
Course Objects:
This course builds on foundations prepared in the introductory economics course,
focusing and expanding on macroeconomic concepts (e.g., aggregate national income
and output, government spending and taxation, money and banking, monetary policy
and international trade). Students will study many concepts from their survey course in
greater depth as well as explore new material. In order to familiarize students with the
academic rigors of a college level, economics course, special attention will be paid to
graphical and mathematical models and analysis. Students will be required to take the
Advanced Placement Examination in Macroeconomics in the spring.
Texts:
Economics, Principles, Problems and Polices, AP Edition, McGraw Hill
- Cost if lost and needs to be replaced: $147.00
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McConnell, Campbell R. & Stanley L. Brue. Macroeconomics. McGraw-Hill (latest ed.).
Walstad, William B. & R.C. Bingham. Study Guide to Accompany Macroeconomics.
Other text and sources will be used by instructor in order to prepare lectures and
discussions.
Since this course is a college level course it is imperative that the students keep up on the
readings and assignments. The instructor reserves the right to give surprise quizzes as
needed in order to ensure work is completed and students have a full understanding and
appreciation of the concepts and theories integral to macroeconomics and to be successful on
the AP exam. There will also be chapter tests, problem sets and nightly homework and reading
as well as projects which consist of research.
Note: The teacher reserves the right to make adjustments in course content as needed.
Homework will be assigned on a regular basis.
Please note that the 2014 Advanced Placement Examination in Macroeconomics takes place on
Thursday, May 15, 2014 at 8:00 am. The examination has two parts. The objective question (i.e.,
multiple choice) section consists of 60 questions, is 70-minutes long, and has a weight of two-thirds.
The free-response section consists of three questions, is 50-minutes long, and has a weight of onethird. According to the College Board,
it is suggested that you spend approximately half your time on the first question and
divide the remaining time equally between the next two questions. In answering the
questions, you should emphasize the line of reasoning that generated your results; it is
not enough to list the results of your analysis. Include correctly labeled diagrams, if
useful or required, in explaining your answers. A correctly labeled diagram must have all
axes and curves clearly labeled and must show directional changes.
Topic Outline
The following outline comes from the AP Economics Course Description. The percentages in
parentheses indicate the amount of the AP Exam that is dedicated to each topic.
I.
Basic Economics Concepts (8 – 12%)
a. Scarcity, Choice and Opportunity Costs
b. Production possibilities curve
c. Comparative advantage, specialization and exchange
d. Demand, supply and market equilibrium
e. Macroeconomics issues: business cycle, unemployment inflation and growth
II. Measurement of Economics Performance (12-16%)
a. National income accounts
b. Inflation measurement and adjustment
c. Unemployment
III. National Income and price Determination (10-15%)
a. Aggregate Demand and Aggregate supply
b. Macroeconomics equilibrium
IV. Financial Sector (15-20%)
a. Money, banking and financial markets
b. Central bank and control of the money supply
V. Inflation, Unemployment and Stabilization Policies (20-30%)
a. Fiscal and monetary policies
b. Inflation and unemployment
VI. Economic Growth and Productivity (5-10%)
a. Investment in human capital
b. Investment in physical capital
c. Research and development and technological progress
d. Growth Policies
VII. Open Economy: International Trade and Finance (10-15%)
a. Balance of payments accounts
b. Foreign exchange market
c. Net exports and capital flows
d. Links to financial and goods markets
Approximate Schedule of Topics:
Please note that there will be a test, consisting of multiple-choice and at least one free
response question, at the conclusion of each chapter/topic.
I.
Introduction
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Rules and Expectations
The AP Exam—Strategies for Success:
“AP LAWS”
 Answer the questions asked
 Pens (blue and/or black) and Pencils (#2 for the multiple choice)
 Label graphs
 Apportion time proportionally among the questions
 Write clearly and fully
 Show your work and explain your answers
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II. The Nature and Method of Economics (ch.1)
By the end of this chapter, students will be able to:
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Explain the role of economic models in studying economics
Explain why scarcity and choice are basic problems of economics
Identify the goals different societies find most important
Explain why economists say all resources are scarce
Explain the difference between goods and services
Explain and describe why every decision involves tradeoffs
Describe the concept of opportunity cost
Describe the economic goals for an economy
Identify the societal values that influence the different types of economies
Explain the difference between normative and positive economics
Understand the difference between correlation and causation
Calculate the slope of a line
Compare differently sloped lines
Write the equation of a line
III. The Economizing Problem (ch.2)
By the end of this chapter, students will be able to:
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Identify factors of production (land, labor, human capital, physical capital,
entrepreneurship)
Understand the difference between productive and allocative efficiency
Construct and analyze a production possibilities frontier (PPF)
Use the law of increasing opportunity cost to explain why the PPF is concave
Explain how the basic economic questions are addressed in a traditional, command,
and market economy
Explain why all economies are mixed economies
Explain the basic tenets of Adam Smith's economic philosophy
Trace Adam Smith’s influence to modern economics
Construct and analyze the circular flow diagram
IV. Understanding Individual Markets: Demand and Supply (ch.3) and
The Market System (ch. 4)
By the end of this chapter, students will be able to:
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Understand the law of demand
Explain the difference between demand and quantity demanded
Construct demand schedules and derive demand curves from them
Describe the factors that can cause the demand curve to shift
Show the impact on price and quantity when there is a change in demand
Explain the difference between supply and quantity supplied
Explain the law of supply
Construct supply schedules and derive supply curves from them
Describe the factors that can cause the supply curve to shift
Show the impact on price and quantity when there is a change in supply
Explain different ways the government can influence the supply of a good
Understand the difference between a tax and a subsidy
Define quota and embargo
Explain why an equilibrium price and quantity are unique
Explain the rationing role of the price system
Identify the benefits and disadvantages of the price system
Explain how shifts in demand and supply affect market equilibrium
Explain what governments try to accomplish through price floors and price ceilings and
rationing
Explain the advantages and disadvantages of price floors and ceilings
Differentiate between market equilibrium and disequilibrium
Explain how shortages and surpluses arise
Explain why a market equilibrium is efficient
V. Measuring Domestic Output, National Income, and the Price Level (ch.7)
By the end of this chapter, students will be able to:
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Understand the importance of GDP as a measurement tool
Calculate GDP through the expenditures approach
Differentiate between nominal and real GDP
Calculate GDP/capita, nominal and real GDP
Understand and calculate the GDP deflator
Understand what items are included in and excluded from GDP
Understand why the income approach to calculating GDP yields the same results as the
expenditure approach
Construct, calculate and interpret a price index
Interpret the Consumer Price Index
Explain the “shortcomings of GDP”
VI. Macroeconomic Instability: Unemployment and Inflation (ch.8)
By the end of this chapter, students will be able to:
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Identify and describe the four phases of the business cycle
Explain the factors that cause the fluctuations in the business cycle
Explain the different types of unemployment
Explain why some types of unemployment are more serious than others
Understand how can the government can reduce or try to prevent unemployment
Describe the different types of inflation
Explain why some types of inflation are more serious than others
Explain how the government measures inflation
Understand the difference between the consumer price index and the rate of inflation
Calculate the consumer price index and the rate of inflation
Explain the causes and effects of inflation
Explain the difference between absolute and relative poverty
Explain how the government defines poverty
Explain the shortcomings of the poverty line
Explain the causes and effects of domestic and international poverty
VII.
Building the Aggregate Expenditures Model (ch.9); Aggregate Demand &
Supply (ch.11)
By the end of this chapter, students will be able to:
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Calculate average and marginal propensities to save and to consume
Identify and describe the components (consumption, investment, government spending,
net exports) that comprise aggregate demand
Define aggregate supply
Draw and interpret the aggregate demand and supply curves
Understand why the aggregate demand is downward sloping
Understand why the aggregate supply curve can have a flat, upward sloping and
vertical region
Identify and describe the determinants of aggregate demand and supply
Explain the impact of demand curve shifts on the economy
Identify equilibrium real output, price level, and income
Understand and calculate the multiplier
Explain the spending multiplier’s effects on aggregate demand
Understand why prices and wages are ”sticky’ (i.e., not necessarily flexible) downwards
Distinguish between classical and (neo-) Keynesian economics and understand the
implications of both theories
VIII.
Extending the Analysis of Aggregate Supply (ch.16)
By the end of this chapter, students will be able to:
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Understand why the short-run and long-run aggregate supply curves are shaped
differently
Apply the short-run and long-run aggregate supply curves to demand pull and cost-push
inflation models
Draw and interpret the short-run and long-run Phillips curve
Explain the impact of supply shocks on the Phillips curve
Draw, interpret, and assess the Laffer Curve
IX. Fiscal Policy (ch.12)
By the end of this chapter, students will be able to:
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Define fiscal policy
Understand how fiscal policy can be used to fight inflation or unemployment
Understand the effects of fiscal policy
Differentiate between expansionary and contractionary fiscal policy
Explain how government spending can “crowd out” private spending
Understand why changes in government spending and taxes have a different impact on
aggregate demand
Explain the advantages and disadvantages of deficits and surpluses
Understand the policy implications of deficit financing and supply-side economics
Understand and applying the balanced budget multiplier
Explain the advantages and disadvantages of built in stabilizers
X. Money and Banking (ch.13)
By the end of this chapter, students will be able to:
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Understand the different definitions of money (M1, M2, M3, L)
Explain the different functions of money
Understand what “backs” the money supply
Understand the determinants of money demand
Understand the purposes of the Federal Reserve system
Define stocks and bonds
Understand how interest rates are determined in the money market
Differentiate between real and nominal interest rates
Define the loanable funds market
Explain how real interest rates are determined in the loanable funds market
Distinguish between the money and loanable funds markets
Outside Reading: “Nominal or Real? Understanding Interest Rates in AP Macroeconomics,”
Peggy Pride, AP Central: 2006.
XI. How Banks Create Money (ch.14)
By the end of this chapter, students will be able to:
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Explain how a fractional reserve banking system works
Read a T-Account
Use T-accounts to explain how money is created in the banking system
XII.
Monetary Policy (ch.15)
By the end of this chapter, students will be able to:
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What are the main differences between monetary and fiscal policy.
Explain the different monetary and nonmonetary roles of the Federal Reserve
Explain how the tools of monetary policy work
Distinguish between Keynesian and supply-side economics
Understand how the Federal Reserve is organized
Explain the rationale behind the method for selecting members of the board of
governors and the length of their term of office
Explain difference between easy and tight monetary policy and describe the implications
of each
Explain how the Federal Reserve uses monetary policy to fight unemployment and
inflation
Explain how the multiplier is calculated
Explain the impact of the multiplier on the economy
XIII.
International Trade (ch.20); The United States in the Global Economy (ch.6)
By the end of this chapter, students will be able to:
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Explain the advantages and disadvantages of free trade and protectionism
Differentiate between autarky and free trade
Describe the differences between absolute and comparative advantage
Calculate opportunity costs based on production possibilities in a two-nation model
Calculate the terms of trade and gains from trade in a two-nation model
Explain the advantages and disadvantages from trading and autarky
Explain the advantages and disadvantages of protectionism
Identify the different economic trade barriers
Describe the economic impact of trade barriers
Describe the inherent contradictions between economic interdependence and political
sovereignty
Explain why significant economic differences have arisen and persisted between core
(center) and periphery countries
Explain the positive and negative cultural and environmental effects of globalization
Explain the economic impact of trade deficits and surpluses
Assess the pros and cons of trade deficits and surpluses
XIV.
Exchange Rates, the Balance of Payments, and Trade Deficits (ch.21)
By the end of this chapter, students will be able to:
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Trace the origins of the current flexible exchange rate system
Differentiate between fixed and flexible exchange rate systems
Calculate how exchange rates are determined
Identify the determinants of exchange rates and explain how they affect the equilibrium
exchange rates
Explain how changing exchange rates affect exports, imports, domestic and foreign
employment rates, and trade deficits and surpluses
Explain the political and economic implications of currency depreciation and
appreciation
XV.
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REVIEW
Review Packet
Students will use Barron’s Study Guide and Five Steps to a Five for review and practice
purposes.
Students will participate in an individual and/or group review project which will be due
for a grade.
Students will use AP Checklist, included in packet, to see where they need more help
Students will take practice exams, including AP and AP-style multiple choice and freeresponse questions
AP Macroeconomics Exam: Thursday, May 15, 2014 in the morning.
Classroom Policies and Procedures
Woodland High School
Classroom Expectations
To ensure an optimum learning environment, please adhere to the following:
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Students will be respectful to all adults and classmates.
 Students will be seated in class when the bell rings.
Students will not display cell phones, portable electronic devices or playing cards in class.
 Students will use computers/ technology appropriately at all times.
Violation of these rules may result in changes to school policies.
We are Woodland!
Go Wolfpack!
A. Materials: All students are expected to bring their text, a pen and a two inch three-ring binder with dividers
loaded with filler paper to class each day unless otherwise stated.
B. Attendance:
1. all students are to be in their seats and ready to begin work when the bell rings. “Ready to begin”
means no food, drinks, hats, telephones, or any other annoying electronic devices. Your textbook and your
notebook should be ready for action, and your homework prepared for collection.
2. Tardiness will result in disciplinary action.
3. Any student with an excused absence from class is responsible for all work missed. It is your
responsibility to make up work that you missed. Make arrangements with classmates to get the day’s notes, or
talk to me on the day that you return to class.
4. Unexcused absences will not be tolerated. Such absences will result in a grade of “0” on the day’s
work and on assignments due on the day of the unexcused absence and disciplinary action in accordance with
school policy.
C. Participation
1. Students are expected to participate in all classroom debates and discussions. The time given over to
discussion provides an opportunity for students to think through their ideas and learn from other in the class.
2. Follow the rule of common courtesy – allow other to speak. Do not use vulgar, profane, degrading or
condescending language. Remember that you earn respect by showing respect to others.
3. Asking permission to use the lavatory does not constitute class participation. Only emergencies
should require you to leave the classroom during class time.
D. Assignments
1. Homework is due at the beginning of class so do not plan on finishing it during class. Late homework
assignments will not be accepted unless you have an excused absence. If you miss class because you are late to
school or because you are dismissed early, then it is your responsibility to give me the assignment during the day
that you are present at the school.
2. Essays and research assignments are due as indicated. You will know well in advance when major
assignments are due so plan accordingly.
3. Homework assignments may be written on white lined paper (8 ½ X 11) with your name, date and
class period in the upper right corner. Use filler paper as these assignments will be added to your
portfolio/notebook. Assignments turned in on paper torn from a wire ring notebook will not be accepted. Take
pride in your work. Use blue or black ink. Pencil is allowed and required on multiple choice tests only. No
essays will be graded that are completed in pencil. Take home essays and other longer assignments must be typed
in Times New Roman 12pt font on standard white paper. Any research papers will be completed in MLA format
only! Use the web sources on my website for help as needed.
E. Quizzes and Tests
It is your responsibility to make up quizzes and tests that you missed due to an excused absence. No
make up exams will be given during class time. You will need to make arrangements to make up missed exams
before or after school or during a AP study skills time with me. You will only be excused from a scheduled test if
you have been absent from school for two or more consecutive days before the exam.
F. Grading Categories and Computation of Semester Grades
School-wide Grading Requirements as follows:
Semester Final Average 100%
 EOCT/Final Exam 15%
 Course Final Average 85%
The Formative and Summative
o Formative Assessment
Assessments equal 100% but fall
 Practice 20%
under the category of Course Final
 Quizzes 35%
Average which is 80% of the
o Summative Assessment 45%
Semester Final Average.
(major tests & projects)
Grading Scale
A= 100-90
B=89-80
C=79-74
D=73-70
F=69 and below
G. Other Policies
1. This classroom is where I spend my day. I expect that you will treat the room and its contents with
respect. Many of the items available for your use are my personal property.
2. In the event that a substitute teacher is present, I expect you to be as respectful and cooperative as you
are when I am in the classroom. Substitutes will collect all homework and in-class assignments. These
assignments will be graded.
3. The proper rules of conduct and all school rules apply at all times.
Tutoring and Assistance:
AP study skills will provide excellent opportunities for students to receive extra assistance. Also you
can see Mrs. Okrutny for a pass to room 210 for morning and/or afternoon assistance.
Academic Integrity Policy:
Academic integrity is a fundamental value of quality education; therefore, Woodland High School
will not tolerate any acts of cheating, plagiarism, or falsification of school work. Should it be
determined that an academic integrity violation has taken place, the school reserves the right to
assign a grade of a zero and submit a disciplinary referral to the appropriate Assistant Principal.
The school also reserves the right to remove or suspend enrollment in any Advanced
Placement/Honors classes as well as Academic Honor Societies.
STUDENT/PARENT CONSENT OF UNDERSTANDING:
I have read and understand all of the objectives, requirements, and expectations for
AP Macroeconomics taught by Mrs. Amanda Okrutny.
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Printed Student Name
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Student Signature
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Date
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Printed Parent/ Guardian Name
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Parent Signature
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Date