West Orange High School - AP Macro



AP Macroeconomics Syllabus

Mr. Iatarola

Course Description:

Initially the course will explore economics from both “micro” and “macro” perspectives. Students will gain an understanding of how scarcity requires individuals and institutions to make choices about how to use resources. Financial literacy shall be a part of instruction and discussion throughout the course.

The AP Macroeconomics class is primarily designed to give students an understanding of economic concepts and their applications to problems of public policy. Learning to analyze problems and make decisions (cause and effect) is a major theme throughout the course. Issues such as inflation and unemployment will be examined, as well as their possible causes and cures. The role of the government and the Federal Reserve in the economy will be examined in depth; as well as how international economics affects us here in the U.S.A. The class requires a rigorous reading schedule and students will be required to illustrate relationships through graphing.

Grades: Student grades for a marking period will be determined as follows:

Tests: 67%

Other: 33%, i.e. activity sheets, vocabulary, group work, current

events, quizzes, worksheets, reading summaries, graphing, and

participation, etc.

Websites:

Clifford Video Clips…

Mjmfoodie…

Econ U$A…

Reffonomics Power-points / Video Clips …

Khan Academy…

Crash Course: Economics…



AP Macroeconomics Schedule

Unit 1: Basic Economic Concepts (PPC, Opportunity Costs, Supply & Demand & Comparative Advantage)

Main Topics:

1. Scarcity

2. Opportunity Cost and the Production Possibilities Curve (PPC)

3. Comparative Advantage and Gains from Trade

4. Demand

5. Supply

6. Market Equilibrium, Disequilibrium, and Changes in Equilibrium

Homework due on test day…Handwritten

Vocabulary definitions in spiral notebook

2 page Reading summary Crash Course Ch.3

|Economics |Tariff |

|Scarcity |Absolute Advantage |

|Opportunity Costs |Comparative Advantage |

|Utility |Law of Demand |

|Marginal Analysis |Determinants (“shifters”) of Demand |

|Other-things-equal Assumption |Substitute Good |

|Tradeoffs |Complementary Good |

|Macroeconomics |Law of Supply |

|Microeconomics |Determinants (“shifters”) of Supply |

|Post Hoc Fallacy |Surplus |

|Fallacy of Composition |Shortage |

|Normative Economics |Equilibrium Price |

|Positive Economics |Normal Goods |

|Factors of Production |Inferior goods |

|Land | |

|Capital | |

|Labor | |

|Entrepreneurial Ability | |

|Consumer Goods | |

|Capital Goods | |

|Production Possibilities Curve | |

Unit 2: Economic Indicators and the Business Cycle (GDP, Circular Flow, Unemployment, Inflation, Real vs. Nominal & the Business Cycle)

Main Topics:

2.1 The Circular Flow and GDP

2.2 Limitations of GDP

2.3 Unemployment

2.4 Price Indices and Inflation

2.5 Costs of Inflation

2.6 Real v. Nominal GDP

2.7 Business Cycles

Homework due on test day…Handwritten

Vocabulary definitions in spiral notebook

2 page Reading summary Crash Course Ch.4

|National Income Accounting | |

|Gross Domestic Product (GDP) |Potential Output |

|Intermediate Goods |Negative Output Gap (Recessionary Gap) |

|Final Goods |Positive Output Gap (Inflationary Gap) |

|Expenditure Approach (C+I+G+Xn) |Inflation |

|Income Approach |Real GDP per capita |

|Value Added Approach |Consumer Price Index (CPI) |

|Personal Consumption Expenditures (C) |GDP Deflator |

|Cross Private Domestic Investment (Ig) |Cost of Living Adjustments (COLA’s) |

|Government Purchases (G) |Real GDP |

|Net Exports ( Xn) |Nominal GDP |

|Disposable Income (DI) |Deflation |

|Economic Growth |Hyperinflation |

|Labor Force |Durable Goods |

|Unemployment Rate |Productivity |

|Discouraged Workers |Business Cycle |

|Frictional Unemployment |Peak |

| |Recession / Contraction |

|Structural Unemployment |Trough |

|Cyclical Unemployment |Recovery / Expansion |

|Full Employment / Natural Rate of Unemployment |Circular Flow Model |

| |Resource Market |

| |Product Market |

| | |

Unit 3: National Income and Price Determination (ADAS, Multipliers, Fiscal Policy)

Main Topics:

3.1 Aggregate Demand (AD)

3.2 Multipliers

3.3 Short-Run Aggregate Supply (SRAS)

3.4 Long-Run Aggregate Supply (LRAS)

3.5 Equilibrium in the Aggregate Demand– Aggregate Supply (AD–AS) Model

3.6 Changes in the AD–AS Model in the Short Run

3.7 Long-Run Self-Adjustment

3.8 Fiscal Policy

3.9 Automatic Stabilizers

Homework due on test day…Handwritten

Vocabulary definitions in spiral notebook

2 page Reading summary Crash Course Ch.5

|Aggregate Demand (AD) |Menu Costs |

|Determinants “Shifters” of AD |Employment Act of 1946 |

|Real-Balances Effect / Wealth Effect |Expansionary Fiscal Policy |

|Interest Rate Effect |Contractionary Fiscal Policy |

|Foreign Purchases Effect |Discretionary Spending |

|Aggregate Supply (AS) |Non-discretionary Spending |

|Determinants “Shifters” of AS |Multiplier Effect |

|Short-Run Aggregate Supply Curve (SRAS) |MPC + MPS = 1 |

|Long-Run Aggregate Supply Curve |M= 1/MPS |

|(LRAS) |Built-In Stabilizer |

|Demand-Pull Inflation |Political Business Cycle |

|Cost-Push Inflation |Net Export Effect |

|Stagflation |Treasury Bond |

|Productivity |US Securities |

|Keynesian Economics | |

|Classical Economics | |

|Fiscal Policy | |

|Progressive Tax System | |

| | |

| | |

Unit 4: Financial Sector (Balance Sheet, Nominal vs. Real Interest Rates, Monetary Policy, Money Market & Loanable Funds)

Main Topics:

4.1 Financial Assets

4.2 Nominal v. Real Interest Rates

4.3 Definition, Measurement, and Functions of Money

4.4 Banking and the Expansion of the Money Supply

4.5 The Money Market

4.6 Monetary Policy

4.7 The Loanable Funds Market

Homework due on test day…Handwritten

Vocabulary definitions in spiral notebook

2 page Reading summary Crash Course Ch.6

|Medium of Exchange |Federal Reserve System (FED) |

|Unit of Account |Board of Governors |

|Store of Value |Federal Open Market Committee |

|M1, M2 |(FOMC) |

|Real vs. Nominal Interest Rate |Monetary Multiplier = 1/RR |

|Fractional Reserve Banking System |Open-Market Operations (Federal Open Market Committee) “FOMC” |

|Balance Sheet |Discount Rate |

|Assets and Liabilities |Federal Funds Rate |

|Demand Deposits / Checking Accounts |Prime Interest Rate |

|Required Reserves |Bonds / Securities |

|Reserve Ratio |Demand for Loanable Funds |

|Excess Reserves |“Shifters” of Demand for Loanable Funds |

|Demand for Money |Supply of Loanable Funds |

|“Shifters” of Demand for Money |“Shifters” of Supply for Loanable Funds |

|Liquidity |Monetary Base |

|Supply of Money | |

|Monetary Policy | |

|Expansionary / Easy Money Policy | |

|Contractionary /Tight Money Policy | |

| | |

| | |

Unit 5: Long-Run Consequences of Stabilization Policies (Crowding Out, Deficits, Debt, MV=PQ, Economic Growth & the Phillips Model)

Main Topics:

5.1 Fiscal and Monetary Policy Actions in the Short Run

5.2 The Phillips Curve

5.3 Money Growth and Inflation

5.4 Government Deficits and the National Debt

5.5 Crowding Out

5.6 Economic Growth

5.7 Public Policy and Economic Growth

Homework due on test day…Handwritten

Vocabulary definitions in spiral notebook

2 page Reading summary Crash Course Ch.7

|Supply-Side Economics |Full-Employment Budget |

|Phillips Curves |Cyclical Deficit |

|Expansionary Fiscal Policy |Political Business Cycle |

|Contractionary Fiscal Policy |Crowding-Out Effect |

|Easy Money Policy |Quantity Theory of Money MV=PQ |

|Tight Money Policy |Expected / Anticipated Inflation |

|Discretionary Spending |Economic Growth |

|Non-discretionary Spending |“Shifters” of Long Run Aggregate Supply |

|Multiplier Effect |Rational Expectations |

|MPC + MPS = 1 |Aggregate Production Function |

|M= 1/MPS |Infrastructure |

|Budget Deficit |Human Capital |

|Budget Surplus | |

|National Debt | |

| | |

Unit 6: Open Economy – International Trade and Finance (FOREX, Balance of Payments & Comparative Advantage Review)

Main Topics:

6.1 Balance of Payments Accounts

6.2 Exchange Rates

6.3 The Foreign Exchange Market

6.4 Effect of Changes in Policies and Economic Conditions on the Foreign Exchange Market

6.5 Changes in the Foreign Exchange Market and Net Exports

6.6 Real Interest Rates and International Capital Flow

Homework due on test day…Handwritten

Vocabulary definitions in spiral notebook

2 page Reading summary Crash Course Ch.8

|Balance of Payments |Tariffs |

|Current Account |Revenue Tariff |

|(CFA) Capital Financial Account |Protective Tariff |

|Balance of Trade (surplus and deficit) |Smoot-Hawley Tariff 1930 |

|Exchange Rates |Import Quota |

|“shifters” of Currency Demand and Supply |Dumping |

|Appreciation |Flexible or Floating Exchange Rate System |

|Depreciation |Fixed Exchange Rate System |

|Absolute Advantage |(NAFTA) North American Free Trade Agreement |

|Comparative Advantage |European Union |

|Terms of Trade |(WTO) World Trade Organization |

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