AP® Macroeconomics Course Summary outline



AP® Macroeconomics-Fall 2011

Course Requirements

Instructor information: Mr. Mark D. Stilkenboom

E-mail: mstilken@

Conference Period: B4

Room #329

Course Description

The purpose of this course is to give students a thorough understanding of the principles of economics that apply to an economic system as a whole (hence macro). This course places particular emphasis on the study of national income and price determination, and also develops students’ familiarity with economic performance measures, economic growth, and international economics.

Textbook and website information

Required text:

McConnell & Brue 15th edition, Economics, McGraw-Hill Irvin

AP Practice Book:

Each Student will be provided with a Princeton Review AP practice book, which will be used during class activities and will be returned to the instructor after the AP exam in May

Major Goals

It is my hope this course will create a lifelong interest in macroeconomics and instill the skills necessary to be able to analyze economic policies and issues in the future. The course is taught using a variety of strategies designed to appeal to all learning styles. This syllabus is designed to help you understand what it will take for you to be successful in this class and on the AP Exam (May 17th).

Standards and Expectations

The course is the equivalent of a college course taught by a professor. College-level textbooks and readings are essential. The material is demanding and only those truly committed to the AP philosophy and exam should be in this class.

Collaborative Learning

Collaborative learning activities will be used regularly throughout the course. It is essential that you exchange e-mail addresses with the other members of the permanent committee or collaborative learning group that you are assigned to. The collaborative learning groups will be assigned numerous essay and multiple-choice activities to complete that are modeled after AP test questions. The purpose of having the students complete the activities in committees instead of individually is to allow them to be assigned more sample questions and receive more timely feedback. The committee system also allows the students to help each other master the more difficult concepts and reexamine concepts they may not have understood in the teacher lecture.

Current Events

The student is required to keep up with current events and economic news at a national and international level. Reading one of the major newspapers (e.g. New York Times, Wall Street Journal) at least twice a week is highly recommended (some recent stories can be read online). Periodicals such as The Economist also provide excellent insight. NPR Radio at 88.7 FM has in-depth news programming in the mornings and in the late afternoon. In regards to TV, PBS (channel 8), CNN or CNN International, Fox News or some of the national news programs on network TV will provide information. PBS has the News Hour weekday nights at 6:00 PM and the Nightly Business Report at 5:30 PM. Furthermore, NPR has a daily business report at 6:30PM. Local news is unsuited for the purposes of this class.

Grading Policies

We will strictly adhere to all Houston ISD policies in respect to grading, make-up work, progress reports and attendance. This information can be found in your student handbook.

Activities and Grading:

Section Tests/

Research Papers/ Presentations 50%

Quizzes/FRQs (Free Response Questions) 30%

Daily Activities 20%

There will be a minimum of two tests per cycle. They will include a combination of multiple choice and free response questions. A timed free response question or quiz will be given approx. once a week. Daily Activities, which include practice questions and worksheets, will not be graded on a daily basis. I will randomly select two or more of all the activities given during the cycle and grade them. It is highly recommended that you do all your homework and practice activities and keep them neatly organized in a folder.

AP Test Information:

AP National Examination May 17, 2012 (Morning) – All students are expected to sign up and attempt the exam. The table below explains the exam format.

The AP Macroeconomics Exam is two hours and 10 minutes long. In Section I, students are given 70 minutes to answer 60 multiple-choice questions; in Section II, they must answer three required free-response questions in 50 minutes -- one longer essay and two shorter essays. There is a 10-minute reading period at the beginning of Section II

| |

|% of Grade |

|Number of Questions |

|Time Allotted |

|Reading Period |

| |

|Section I |

|66 2/3 |

|60 |

|70 minutes |

| |

| |

|Section II |

|33 1/3 |

|3 required |

|50 minutes |

|10 minutes |

| |

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THE FOLLOWING IS THE TENTATIVE COURSE OUTLINE WITH OBJECTIVES AND QUESTIONS COORELATED TO THE AP COURSE

OUTLINE.

Lesson Plans-Fall 2011

Cycle I

Week I

Unit 1: An Introduction to Economics

Topic I: Basic Economic Concepts

A. Scarcity — What is it? Why is it so important to economic thought?

B. Opportunity Cost — Define and compute it. Why can it never be

avoided?

C. Production Possibilities — Construct and interpret production

possibilities schedules, and graphs; relate production possibilities

curves to the issues of scarcity, choice and cost. Why are most PPCs

bowed out?

Week II

D. Specialization and Comparative Advantage — Define and calculate

absolute and comparative advantages for production exchange

E. Functions of Any Economic System

1. Answering the questions: What to produce? How to produce?

For whom to produce?

2. Define ways societies determine allocation, efficiency, and equity.

Week III

Topic II: Demand, Supply, and Price Determination

A. Demand — Define and illustrate demand through schedules and

graphs

1. Distinguish between change(s) in quantity demanded and

change(s) in demand.

2. Examine the inverse relationship existing between quantity

demanded and price. Evaluate the Law of Demand.

3. Identify and explain the variables which cause a change in

demand.

4. Illustrate graphically a change in demand versus a change in

quantity demanded.

B. Supply — Define and illustrate supply through schedules and graphs

1. Distinguish between change(s) in quantity supplied and change(s)

in supply.

2. Examine the direct relationship existing between quantity

supplied and price. Evaluate the Law of Supply.

3. Identify and explain the variables which cause a change in supply.

4. Illustrate graphically a change in supply versus a change in

quantity supplied.

C. Equilibrium Price and Quantity — Define and illustrate equilibrium

through schedules and graphs

1. Define and illustrate surpluses and shortages.

2. Define the effects of surpluses and shortages on prices and

quantities.

3. Interpret the effects of a price floor and price ceiling on

equilibrium price and quantity.

4. Introduction to market failures: Lack of competition, externalities,

and public goods.

Week IV

Unit 2: Measurement of Economic Performance

Topic I: Gross Domestic Product and National Income Concepts

A. Measuring GDP, 4-Sector Circular Flow Model, and Flow versus

Stock

1. Expenditure Approach [C+I+G+(X-IM)] where

C = Personal Consumption Expenditures

I = Gross Private Investment

G = Government Consumption Expenditures and Gross

Investment

X-IM = Net Exports

2. Income Approach (W+I+R+P) where

W = Compensation of Employees

I = Net Interest

R = Rental Income of Persons

P = Profits (Non-income adjustments)

3. Problems with calculating GDP— Nonmarket transactions,

distribution, kind and quality of products.

4. Changing Nominal GDP (NGDP) to Real GDP(RGDP). How

and why?

5. Other national accounts: Net National Product (NNP), National

Income (NI), Personal Income (PI), and Disposable Income (DI).

Week V

Topic II: Unemployment and Business Cycles

A. The Roller Coaster — The four phases of the business cycle

B. Total Spending and How It Affects the Business Cycle

C. Unemployment — Defined

D. Problems with the Unemployment Rate — Who is counted and

who isn’t?

E. Types of Unemployment

1. Seasonal, frictional, structural, cyclical

2. Which type(s) affect the unemployment rate?

41

F. Full Employment — What is it? What are the implications if

achieved?

G. The GDP Gap — Explaining lost potential

Week VI

Topic III: Inflation

A. The Meaning and Measurement of Inflation

B. The Consumer Price Index (CPI) and How It Is Computed

C. Problems with the CPI

D. Other Indexes: Producer Price Index

E. Consequences of Inflation: shrinking incomes, changes in wealth,

effect on interest rates

F. Demand-Pull and Cost-Push Inflation

Cycle II

Week I

Unit 3: Macroeconomic Theory and Policy

Topic I: The Classical Theory and the Keynesian Theory: An Introduction

A. The Role of the Consumption Function

B. Marginal Propensities to Consume and Save

C. Why the Consumption Function Shifts and How It Affects

Aggregate Demand

D. The Role of the Investment Function

E. Why is Investment Demand unstable?

1. Expectations

2. Technological change

3. Capacity utilization

F. Investment as an Autonomous Expenditure

G. Graphing the Aggregate Expenditure Function

Week II

Topic II: Keynesian Model in Action

A. Government Spending and How It Affects Aggregate Demand

B. Adding International Trade to the Aggregate Expenditure Model

C. The Spending Multiplier— the math and its effects

D. Recessionary and Inflationary Gaps — a graphing exercise

Topic III: Aggregate Demand and Supply

A. Aggregate Demand Curve — Reasons for Its Shape

1. Real balances effect

2. Interest rate effect

3. Net export effect

B. Nonprice-Level Determinants of Aggregate Demand

C. Aggregate Supply Curve

1. Classical view

2. Keynesian view

3. Changes in equilibrium price and quantity with the three ranges

D. Nonprice-Level Determinants of Aggregate Supply

Week III

Topic IV: Fiscal Policy/Public Sector

A. Discretionary Fiscal Policy

1. Changes in government spending

2. Changes in tax rates

3. Balanced-budget multiplier

B. Supply-Side Policies

C. Laffer Curve

D. Government Size and Growth

1. Financing budgets

2. Government expenditure patterns

E. Types of Taxation

1. Progressive

2. Proportional

3. Regressive

F. Federal Deficits and the National Debt

1. The Federal Budget-Balancing Act

a. Gramm-Rudman-Hollings Act

b. Line-item veto

c. Budget ceiling

2. Should we worry about deficits or the debt?

Week IV

Topic V: Money, Banking, and Monetary Policy

A. Three Functions of Money

B. What Stands Behind the U.S. Dollar?

C. The Three Money Supply Definitions

1. M1: most narrowly defined money supply

2. M2: adding near monies to M1

3. M3: adding large time deposits to M2

D. The Federal Reserve System (FED)

1. Origins and organizational structure

2. Powers of the FED

a. controlling the money supply

b. clearing checks

c. supervising and regulating the banks

d. loaning currency to banks

e. acting as the bank for the U.S. government

Week V

3. Tools of the FED

a. open market operations

b. discount rate

c. reserve requirement

E. The Money Multiplier

1. Theory versus reality

F. Monetary Policy Shortcomings

1. Money multiplier inaccuracies

2. Lags in policy effects

G. Monetary Policy

1. The demand for money and how it may affect interest rates

2. How monetary policy affects prices, output and employment

3. The Monetarist view of money (MV=PY)

4. A comparison of views: Monetarist, Keynesians and Classical

Economists

Cycle III

Week I

Topic VI: The Phillips Curve and Expectations Theory

A. What Is the Phillips Curve?

1. In the short run

2. In the long run

B. Rational Expectations Theory

1. Can it work?

Week II

Unit 4: The International Economy

Topic I: International Trade and Finance

A. Why Nations Trade at All

B. Comparative and Absolute Advantage

C. Free Trade versus Protectionism

1. Arguments for free trade

2. Arguments against free trade

D. The Balance of Payments

1. Current account

2. Capitol account

3. International debt of the U.S.

Week III

E. Exchange Rates

1. Supply and demand for foreign exchange

2. Current fluctuations

a. appreciation and depreciation

b. graphing currency changes

Week IV

Topic II: Comparative Economic Systems

A. Basic Types of Economic Systems

1. Traditional, command, and market economies — defined and

analyzed

2. The mixed economy of today

3. Capitalism and socialism— basic tenets

4. Comparing the systems

B. Comparing Developed and Developing Countries

1. Classifying countries by GDP per capita

a. problems with classification

2. How to sustain economic growth in developing countries

3. Implications for a changing world

Week V

AP Test taking strategies and Review

Week VI

Final Exams

Responsibilities and Expectations:

• Follow all classroom procedures outlined in the student handbook and the HISD student code of conduct

• This is a university level class. If you are unable to behave and commit to the material you might be in the wrong class.

• Attendance is vital to success. In a course of this length every meeting counts. Missing more than just a couple of classes will be hard to make up for.

• All handwritten work has to orderly and preferably written in cursive or it will not be accepted.

• Students are expected to sit straight in their student desks and respect the professional atmosphere of this classroom.

• Students are expected to wait their turn and raise their hands until recognized by the instructor.

• Tardiness is not acceptable. If you know you are going to be late for class you must first report to your classroom and then report to administration. After reporting to administration you are to return to class immediately.

• Note taking during lectures is mandatory.

• There are no restroom breaks in the first and last 15 minutes of the class period. Even then you are not allowed to leave the classroom except in the case of an emergency, which is to be determined by me.

• Students need to come prepared to class. Folder, notepaper, graphing paper, pencils, pen, colored pencils, rulers, calculators and textbook are required everyday. Failure to comply may lead to disciplinary action.

• Obvious disrespect of the instructor and/or other students will have serious disciplinary consequences.

• Never throw away any handouts or graded activities. I can guarantee you will need them.

• There are no extra credit assignments in this class.

• Non-Economics related materials will be confiscated. The instructor will throw homework or assignments from other classes away.

• Talking will not be permitted unless as part of a student activity.

• Make-up Policy: In the case of an absence it is the students’ responsibility to contact the instructor for any missed assignments. The student has 3 days to make-up missed work due to absences. I will not remember every absence and it is in your best interest to do so.

• Re-take Policy: Students will be given a chance to re-take a failing test grade. The failing grade and the re-take grade will be averaged out and the student will be assigned a new grade, which is not to exceed 75%. There will be no re-takes on tests given during the last week of each cycle. Final exam cannot be re-taken. Students need to request a re-take in writing (forms are available in the classroom) and schedule a re-take date with the instructor within 5 days of the receipt of the failing grade.

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