AP MacroEconomics Syllabus
COURSE OBJECTIVE:
The AP MacroEconomics course is part of a national curriculum by the College Board. The objective of this course is to provide the student with a basic understanding of the principles of economics and then to apply those principles to an economic system as a whole. This will include how we measure economic performance, the financial sector, international policies, economic growth and stabilization policies. At the end of the course the student is expected to understand these concepts as well as how they interact in an economy.
This course is taught on an entry collegiate level, which means that the ability to reason will be key to your success in this class. Since part of the objective in this class is to receive college credit by passing the national A.P. Macroeconomics exam in May, we will expend much effort in preparing you to apply the concepts learned in this class to a test in that format.
Unit 1 Information (3 weeks)
Basic Economic Concepts
Unit 1 Objectives
Unit 1 Assignments and/or Assessments
Read Chapter 1; Complete Take Home Test for Chapter 1
Read Chapter 3; Complete Take Home Test for Chapter 3
Read Chapter 4; Complete Take Home Test for Chapter 4
Read Chapter 6; Complete Take Home Test for Chapter 6
Unit 2 Information (4 weeks)
Measuring Economic Performance & National Income and Price Determination
Unit 2 Objectives
Unit 2 Assignments and/or Assessments
Read Chapter 23; Complete Take Home Test for Chapter 23
Read Chapter 24; Complete Take Home Test for Chapter 24
Read Chapter 33; Complete Take Home Test for Chapter 33
Unit 3 Information (3 weeks)
The Financial Sector
Unit 3 Objectives
Unit 3 Assignments and/or Assessments
Read Chapter 26; Complete Take Home Test for Chapter 26
Read Chapter 29; Complete Take Home Test for Chapter 29
Unit 4 Information (2 weeks)
Inflation, Unemployment, and Stabilization Policies
Unit 4 Objectives
Unit 4 Assignments and/or Assessments
Read Chapter 34; Complete Take Home Test for Chapter 34
Read Chapter 35; Complete Take Home Test for Chapter 35
Unit 5 Information (1-2 weeks)
Economic Growth and Productivity
Unit 5 Objectives
Unit 5 Assignments
Read Chapter 25; Complete Take Home Test for Chapter 25
Unit 6 Information (2 weeks)
International Trade & Finance
Unit 6 Objectives
Unit 6 Assignments and/or Assessments
Read Chapter 31; Complete Take Home Test for Chapter 31
Read Chapter 32; Complete Take Home Test for Chapter 32
Additional Assignment at end of course
Based on your knowledge of Macroeconomics AND the current economic statistics (which you must research from government web sites as provided)
The AP MacroEconomics course is part of a national curriculum by the College Board. The objective of this course is to provide the student with a basic understanding of the principles of economics and then to apply those principles to an economic system as a whole. This will include how we measure economic performance, the financial sector, international policies, economic growth and stabilization policies. At the end of the course the student is expected to understand these concepts as well as how they interact in an economy.
This course is taught on an entry collegiate level, which means that the ability to reason will be key to your success in this class. Since part of the objective in this class is to receive college credit by passing the national A.P. Macroeconomics exam in May, we will expend much effort in preparing you to apply the concepts learned in this class to a test in that format.
Unit 1 Information (3 weeks)
Basic Economic Concepts
Unit 1 Objectives
- What is scarcity
- What is an opportunity Cost
- What are factors of production
- Know how to draw and interpret a production possibilities curve
- What is the difference between a movement along the curve and a change in the curve
- What are things which would make the entire curve change. Be able to draw the appropriate change.
- Know what absolute advantage is and comparative advantage is.
- Be able to calculate comparative advantage given production possibilities for two countries.
- What are the three questions answered by an economic system.
- What are the similarities and differences between the economic systems.
- Understand how a market system works.
- Understand how supply and demand work in a market system.
- Understand what market equilibrium is, how to find it, and what would cause it to move.
- Understand and be able to graph the difference between a change in supply/demand and a change in quantity supplied/demanded.
- Understand how interference in the market (through price floors and price ceilings) will affect the market AND be able to graph these changes.
- Understand the basics of the circular flow model.
Unit 1 Assignments and/or Assessments
Read Chapter 1; Complete Take Home Test for Chapter 1
Read Chapter 3; Complete Take Home Test for Chapter 3
Read Chapter 4; Complete Take Home Test for Chapter 4
Read Chapter 6; Complete Take Home Test for Chapter 6
Unit 2 Information (4 weeks)
Measuring Economic Performance & National Income and Price Determination
Unit 2 Objectives
- What is GDP?
- What is the difference between GDP and GNP?
- What are the four sectors which make up the circular flow model AND what part do each make up of GDP?
- What is inflation?
- What are some of the price indices used to measure inflation and how do they work?
- What is the difference between real GDP and nominal GDP?
- Given a price index be able to calculate real cost or in the case of GDP real GDP.
- Who benefits and who loses from unanticipated inflation?
- Understand the stages of the business cycle as well as the characteristics of each stage of the business cycle.
- Understand how we measure unemployment.
- What are some of the reasons that some people argue that our measurement of the unemployment rate is inaccurate?
- What are the different types of unemployment and which types are more difficult to overcome? Which types normally show up at which stages of the business cycle?
- What is considered the natural rate of unemployment or full employment?
- What is aggregate demand and how does the aggregate demand curve look?
- What would cause a shift in the aggregate demand curve, be able to graph this.
- What are the four components of aggregate demand?
- Explain AND demonstrate on a properly labeled graph how a change in each of the components of aggregate demand will cause a change in the curve.
- What is the spending multiplier? How is it calculated? How does the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) affect the multiplier. Demonstrate this change on the aggregate demand curve.
- What does the short run aggregate supply curve look like? What does the long run aggregate supply curve look like? Why are each of these shaped the way they are?
- Using the aggregate supply curve and the aggregate demand curve draw a properly labeled graph showing equilibrium output and price level with the economy at full employment.
- Be able to demonstrate on your graph how changes that affect the aggregate demand curve would impact this model.
- Explain the concepts of “sticky wages” and “sticky prices” and their impact on this model.
Unit 2 Assignments and/or Assessments
Read Chapter 23; Complete Take Home Test for Chapter 23
Read Chapter 24; Complete Take Home Test for Chapter 24
Read Chapter 33; Complete Take Home Test for Chapter 33
Unit 3 Information (3 weeks)
The Financial Sector
Unit 3 Objectives
- What is a financial market?
- What is a financial intermediary?
- What is the difference between a stock and a bond?
- What is the difference between saving and investing?
- What is meant by the “loanable funds market?”
- Show on a properly labeled graph how a federal budget deficit will affect the loanable funds market?
- What is meant by the ‘time value of money?”
- Explain ways to “manage risk.”
- Explain the trade-off between risk and reward.
- Explain the functions of money.
- What is the difference between commodity money and fiat money?
- How do we measure money in circulation?
- What is the FED and what are the main parts and functions of the FED?
- Understand the tools available to the FED to carry out it’s responsibility.
- Explain how “fractional reserve banking” works.
- Understand and be able to use “T-accounts.”
- What is the money multiplier? How is it calculated?
- What is meant by “money demand?”
- How will the money supply and money demand affect interest rates?
- What is the difference between nominal and real interest rates?
- How will interest rates affect the investment and consumption portions of aggregate demand?
- Be able to demonstrate AND explain on a properly labeled graph how changes in the moneynsupply or money demand will change equilibrium interest rates and how these will affect aggregate demand and thus output and price level.
Unit 3 Assignments and/or Assessments
Read Chapter 26; Complete Take Home Test for Chapter 26
Read Chapter 29; Complete Take Home Test for Chapter 29
Unit 4 Information (2 weeks)
Inflation, Unemployment, and Stabilization Policies
Unit 4 Objectives
- What is the difference between Aggregate Supply in the short run vs. the long run
- What do the differences look like when graphed?
- What would cause a change in short run Aggregate supply?
- What would cause a change in long run Aggregate supply?
- What would cause a change in Aggregate Demand?
- Drawing a properly labeled graph, show how the money market would be affected by a monetary injection from the FED.
- Drawing a properly labeled graph demonstrate how various monetary policies would affect aggregate demand, price level, and output.
- Drawing a properly labeled graph demonstrate how various fiscal policies would affect aggregate demand, price level, and output.
- Drawing a properly labeled graph demonstrate how a budget deficit would affect the money market, interest rate, and quantity of money.
- Drawing a properly labeled graph demonstrate how the change in the money market will affect aggregate demand, price level and quantity of output.
- What is the difference between cost push and demand pull inflation?
- According to the Phillips curve what is the relationship between inflation and unemployment?
- What is the difference between the Phillips Curve in the short run vs. the long run?
- How does expected inflation affect the short run Phillips Curve?
- How does a “supply shock” affect the short run Phillips Curve?
- Demonstrate the above on a properly labeled graph.
- Distinguish between discretionary and automatic fiscal policy. Give examples of each.
Unit 4 Assignments and/or Assessments
Read Chapter 34; Complete Take Home Test for Chapter 34
Read Chapter 35; Complete Take Home Test for Chapter 35
Unit 5 Information (1-2 weeks)
Economic Growth and Productivity
Unit 5 Objectives
- What is productivity and how is it determined / measured?
- What are some ways to increase productivity?
- What is meant by an investment in human capital?
- What is meant by an investment in capital?
- What are other ways to increase productivity?
- What is the relationship between productivity and standard of living?
- How does specialization affect productivity?
- What is the relationship between productivity and investment?
- What is the relationship between productivity and economic growth?
Unit 5 Assignments
Read Chapter 25; Complete Take Home Test for Chapter 25
Unit 6 Information (2 weeks)
International Trade & Finance
Unit 6 Objectives
- What is meant by the term “balance of trade?”
- What is the difference between current accounts and capital account?
- How is the value of a country’s currency determined?
- How does a trade deficit or a trade surplus affect the value of a country’s currency?
- What is meant by the “foreign exchange market?”
- Who benefits from appreciation in a country’s currency? Who suffers from appreciation in a country’s currency? WHY?
- What is the relationship between a country’s net exports and net capital outflow? WHY?
- How do interest rates affect capital flow?
- Knowing this using properly labeled graphs of the Market for loanable funds, net capital outflow, and real exchange rates, demonstrate the effect of a budget deficit on each and the resulting action in each.
- What are some ways in which a country might carry out protectionist policies?
- What are some reasons a country might carry out protectionists policies?
- How does comparative advantage make it beneficial to have free trade?
Unit 6 Assignments and/or Assessments
Read Chapter 31; Complete Take Home Test for Chapter 31
Read Chapter 32; Complete Take Home Test for Chapter 32
Additional Assignment at end of course
Based on your knowledge of Macroeconomics AND the current economic statistics (which you must research from government web sites as provided)
- Draw a properly labeled graph showing aggregate supply, aggregate demand, current price level and output based on where you believe us to be at present based on the economic data.
- Give a fiscal policy which would improve our situation.
- Give a monetary policy which would improve our situation
- Explain which aspects of Aggregate supply and aggregate demand your proposals would affect and what the effect would be.
- Draw and label the appropriate changes on your original graph, explain the short run effect and what if any the long run effect of your proposals would be.