AP Macroeconomics

Units

Every unit is assessed on the AP Exam. The first unit borrows supply and demand from microeconomics; after that the course measures the economy, builds the aggregate demand and aggregate supply model, adds money and banks, follows policy into the long run, and ends with trade and exchange rates.

1. Unit 1 Basic Economic Concepts 5–10% of the multiple-choice section · 6 topics

   1. 1.1Scarcity
   2. 1.2Opportunity Cost and the Production Possibilities Curve (PPC)
   3. 1.3Comparative Advantage and Gains from Trade
   4. 1.4Demand
   5. 1.5Supply
   6. 1.6Market Equilibrium, Disequilibrium, and Changes in Equilibrium

   Unit 1 overviewUnit 1 check

2. Unit 2 Economic Indicators and the Business Cycle 12–17% of the multiple-choice section · 7 topics

   1. 2.1The Circular Flow and GDP
   2. 2.2Limitations of GDP
   3. 2.3Unemployment
   4. 2.4Price Indices and Inflation
   5. 2.5Costs of Inflation
   6. 2.6Real v. Nominal GDP
   7. 2.7Business Cycles

   Unit 2 overviewUnit 2 check

3. Unit 3 National Income and Price Determination 17–27% of the multiple-choice section · 9 topics

   1. 3.1Aggregate Demand (AD)
   2. 3.2Multipliers
   3. 3.3Short-Run Aggregate Supply (SRAS)
   4. 3.4Long-Run Aggregate Supply (LRAS)
   5. 3.5Equilibrium in the Aggregate Demand–Aggregate Supply (AD–AS) Model
   6. 3.6Changes in the AD–AS Model in the Short Run
   7. 3.7Long-Run Self-Adjustment
   8. 3.8Fiscal Policy
   9. 3.9Automatic Stabilizers

   Unit 3 overviewUnit 3 check

4. Unit 4 Financial Sector 18–23% of the multiple-choice section · 7 topics

   1. 4.1Financial Assets
   2. 4.2Nominal v. Real Interest Rates
   3. 4.3Definition, Measurement, and Functions of Money
   4. 4.4Banking and the Expansion of the Money Supply
   5. 4.5The Money Market
   6. 4.6Monetary Policy
   7. 4.7The Loanable Funds Market

   Unit 4 overviewUnit 4 check

5. Unit 5 Long-Run Consequences of Stabilization Policies 20–30% of the multiple-choice section · 7 topics

   1. 5.1Fiscal and Monetary Policy Actions in the Short Run
   2. 5.2The Phillips Curve
   3. 5.3Money Growth and Inflation
   4. 5.4Government Deficits and the National Debt
   5. 5.5Crowding Out
   6. 5.6Economic Growth
   7. 5.7Public Policy and Economic Growth

   Unit 5 overviewUnit 5 check

6. Unit 6 Open Economy—International Trade and Finance 10–13% of the multiple-choice section · 6 topics

   1. 6.1Balance of Payments Accounts
   2. 6.2Exchange Rates
   3. 6.3The Foreign Exchange Market
   4. 6.4Effect of Changes in Policies and Economic Conditions on the Foreign Exchange Market
   5. 6.5Changes in the Foreign Exchange Market and Net Exports
   6. 6.6Real Interest Rates and International Capital Flows

   Unit 6 overviewUnit 6 check

Labs

The AD and AS lab shifts aggregate demand and short-run aggregate supply against a fixed long-run aggregate supply, and shows the output gap, the price level, and where the economy settles once wages and prices adjust.

• Topics 3.5 to 3.7 AD and AS Lab Shift aggregate demand and short-run aggregate supply, read the output gap and price level, and see where the economy settles in the long run.
• Topic 3.6 Draw the AD-AS Graph Read a situation, move the curve it changes, and place the new short-run equilibrium. The page checks your graph and names what is wrong with it.
• Topic 1.6 Draw the Supply and Demand Graph Read a change in one market, move the curve it shifts, and place the new equilibrium. The page checks your graph and names what is wrong with it.
• Topic 1.2 Draw the PPC Label the axes of a production possibilities curve, show how it moves when resources or technology change, and place points inside, on and outside it. The page checks your graph.
• Topics 4.5 and 4.6 Draw the Money Market Graph Label the money market, move money demand or money supply the way a change pushes it, and place the new equilibrium. The page checks your graph and names what is wrong with it.
• Topic 4.6 Draw the Reserve Market Graph Label the reserve market under ample reserves, move the part of it a central bank action changes, and mark the policy rate. The page checks your graph and names what is wrong with it.
• Topic 4.7 Draw the Loanable Funds Graph Label the loanable funds market, move demand or supply the way a change pushes it, and place the new equilibrium. The page checks your graph and names what is wrong with it.
• Topic 5.2 Draw the Phillips Curve Label the Phillips curve graph, then show whether a change moves the economy along the short-run curve or shifts a curve, and where the economy ends up. The page checks your graph and names what is wrong with it.
• Topics 6.3 to 6.6 Draw the Foreign Exchange Market Label a currency market, move the demand or supply curve a change pushes, and mark the new exchange rate, then the other currency's market or net exports. The page checks your graph.