A.P. Macroeconomics Syllabus 2011


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Mr. A. Gonzalez

A.P. Macroe
conomics Syllabus 2011

The AP Macroeconomics class is a one
semester college
level course. Every student taking the class is
expected to take the AP Macroeconomics Exam in May. Students earning a three or higher on the exam
have the opportunity of earning three hours of college credit.


Main textbook: McConnell, Campbell and Stanley Brue. Economics,16

ed., McGraw
Hill/Irwin. 2005.


, John Advanced Placement Economics Macroeconomics Student Activities,

ed. New York:
National Council on Economic Education, 2003. (Every student has own copy.)

5 Steps TO A 5 AP Microeconomics/Macroeconomics 2012
2013 McGraw

(Every student has own

Social Science Test Day:

Web Resources:




: Money and Forbes.


ll Street Journal and Miami Herald. (Current articles.)

Assignments are available at the following web site:


A.P. Outline

(Percentage Goals for Exam)

Unit 1: Basic Economic Concepts.

Chapters: 1,2,3 2 1/2 weeks (8


Scarcity, choice, and opportunity


Production possibilities curve.


Comparative advantage, absolute advantage, specialization, and exchange.


Demand, supply, and market equilibrium.


Macroeconomic issues, business cycle, unemployment, inflation, growth.

Read pages3
55. List of key conce
pts, graphs, and terms: Principles of economics, micro vs. macro,
positive vs. normative economics, fallacy of composition, ceteris paribus assumption, economizing
problem, opportunity cost, production possibilities curve, economic systems, circular flow m
demand schedule, determinants of demand, quantity demanded, supply schedule, determinants of
supply, quantity supplied, elasticity of demand, freedom of enterprise, fundamental questions,
consumer sovereignty, “invisible hand”, legal forms of busines
ses, spillover costs and benefits, marginal
and average tax rates, comparative advantage, absolute advantage, exchange rates, barriers to free
trade, economics, marginal analysis, tradeoffs, factors of production, production possibilities table,
, command economy, consumer and capital goods, resource and product market, market
demand, law of demand, substitute and complementary goods, supply, law of supply, equilibrium price,
price ceilings and price floors, private property, competition, speciali
zation, barter, normal and
economic profit, durable and nondurable goods, sole proprietorship, partnership, corporation, stocks,
bonds, transfer of payments, appreciation, depreciation, free trade, GATT, WTO, EU, NAFTA, G
multinational corporation, term
s of trade,

Lesson 1: Course introduction: Discussion of rules and regulations, grading system, book and workbook
via syllabus. Give out textbooks

Home learning read pages 3
13 write out answers to questions
2,4,6,11,and 12

Lesson 2: Lecture on
scarcity, opportunity costs, and resources and other key terms. Home learning read
and take

notes on cha
pter 2 pages 22

Lesson 3: Lecture on production possibility curve. Have students start on lesson 1 activity 1 in Morton’s
workbook how to gra
ph ppc. Home learning read and

take notes on ch2

Page 37 answer questions 8
and 15

Lesson 4.
Quiz ch 1.

Review lesson 1 activity 1. Absolute and comparative advantage. Have students pair
up and work on Morton’s activity book and Unit 1 lesson
1 activity 2.

Home learning answer questions 1
4 page 26.

Lesson 5. Review answers for absolute and comparative advantage. Home learning study
for quiz on


Lesson 6
. Survival group activity
. (8/29).

Lesson 7.
Quiz ch. 2 Read ch 3
pages 45

Lesson8. Lecture on demand curves, movements along the demand curves, and shifts in demand curves.
Students work on worksheet in pairs in class on worksheet. Home learning unit 1 lesson 2 activity 3 and
4 Morton’s workbook

and in textboo
k write our answers questions 4,5,7, and 8 page 57

Lesson9. Go over home learning unit 1lesson 2 activities 3 and 4 students put answers on the board. Go
over in class worksheet. Lecture on supply curves, movements along the supply curves, shifts i
n supply
curves. Students work on worksheet in pairs on supply worksheet. Home learning unit 1 lesson 3 activity
5 and 6.

Home learning read pages 48


Quiz Demand.

Lecture on market equilibrium, shortages and surplus, price floors and pri
ceilings. Students in pairs begin 1 lesson 4 activity 7 in Morton’s workbook. Home learning finish
workbook activity

in text book answer questions 1,2,4,5,7,and 8

Lesson11. Go over home learning equilibrium price and quantity activity 7. Review fo
r test. (9/6).

Lesson12. Test on chapters 1,2,3 supply, demand, and market equilibrium.(9/7).

Lesson13.Test corrections on chapters 1,2,3. Read pages 60
69 and take notes for home learning. (9/8)

Unit II: Market Systems and Private and Public Sectors 1 W

Chapters 4,5,6

Read pages 60
107. key concepts, terms, and graphs: private property, freedom of enterprise, freedom
of choice, self
interest, competition, roundabout production, specialization, division of labor, four
fundamental questions, economi
c costs, normal profit, economic profit, expanding industry, declining
industry, consumer sovereignty, dollar votes, derived demand, guiding functions of prices, creative
destruction, “invisible hand”, functional distribution of income, personal distributi
on of income,
services, plant, firm, industry, free

rider problem, quasi
public goods, government purchases, transfer
of payments, personal income tax, marginal tax rate, average tax rate, payroll tax, corporate income tax,
sales and excise tax, progressi
ve, regressive, proportional tax.

Lesson 14. In class read and answer questions on Adam Smith and the invisible hand, specialization, self
interest, division of labor etc. Activity on market system.(9/9)

Lesson15.Lecture circular flow model in class and a
ctivity Morton’s activity

10 lesson 1
. (9/12)

. Lecture on economic systems
. Read pages 73

Lesson17.Lecture on taxes.(9/14) Study for quiz .


Commanding Heights part 1


Quiz chapters 4 and 5
. (9/16)

Unit II
: Mea
surements of Economic Performances
2 weeks



National income accounts

1. Circular Flow

2.Gross domestic product

3.Components of gross domestic product

4. Real versus nominal gross domestic product


Inflation m
easurements and adjustment

1.Price indices

2.Nominal and real values

3.Cost of inflation



1.Definition and measurements

2.Types of unemployment

3.Natural rate of unemployment

Chapters 7,8,9

Read pages 112
126 define key terms and concepts: national income accounting, gross domestic
product, expenditure and income approach, intermediate goods, fixed goods, multiple counting, value
added, personal consumption expenditures, gross private domest
ic investment, net private domestic
investment, government purchases, net exports, national income, indirect business taxes, consumption
of fixed capital, net domestic product, personal income, disposable income, nominal GDP, real GDP,
price index.

0. Define Macroeconomics

, explain the importance of macroeconomics issues, and describe
the major sectors of the macro economy. Student
s complete Morton’s activity 11 and 12 GDP only in
pairs fins for home learning

Lesson21.Go over activity11 a
nd 12
, discuss economic goals, lecture on measuring key macroeconomic
variables, students complete

. (9/20)

tudents watch Video Economics USA; GNP and questions in class. (9/21)

Read pages 131
148. Key terms and concepts and models: econo
mic growth, real GDP per capita, rule of
70, productivity, business cycle, peak, recession, trough, recovery, labor force, unemployment rate,
discouraged workers, frictional unemployment, structural unemployment, cyclical unemployment, full
employment rate

of unemployment, natural rate of unemployment (NRU), potential output, GDP gap,
Okun’s law, inflation, Consumer Price Index (CPI), demand
pull inflation, cost
push inflation, per
production costs, nominal income, real income, anticipated inflation, u
nanticipated inflation, cost
living adjustments (COLA’s), real income rate, nominal interest rate, deflation, and hyperinflation.

Quiz on GDP.
Lecture on price index and inflation and have students begin activity 13 in class
and finish at home
. (9/22)

Lesson 24. Go over home learning. Video Economics USA: Inflation answer questions.(9/23)


Quiz on Price Index including inflation.

Lecture on unemployment using LCD projector,
students in pairs work on activity 16 and finish activity 11.
ead 131
135. Answer questions 1
3 on page

Lesson26. Lecture on the business cycles and students complete activity 17 in cla
ss. Home learning study
Home learning answer question 4 page 151


Quiz unemployment.
Inflation activity


Unemployment activity


Home learning read pages 152
167. Key terms and concepts and graphs: 45 (degree) line, consumption
schedule, saving schedule, break
even income, average propensity to consume (APC), average
propensity to sav
e (APS), marginal propensity to consume (MPC), marginal propensity to save (MPS),
wealth effect, expected rate of return, investment demand curve, multiplier.

Lesson29. Lecture on the basic economic relationships. Have students complete activity 20 unit 3
. Home
learning in text book page 169 question 5 a,b,c,d.(10/3)

Lesson30. Lecture on the multiplier and have students work on activity 21 in pairs.(10/4)

Lesson31. Test chapters 7,8,9. (10/5)

Lesson32. Free Response.


Lesson 33. Corrections. (10/7).

Unit IV: National Income and Price Determination
3 ½ weeks



Aggregate demand

1.Determinants of aggregate demand

2.Multiplier and crowding
out effects


Aggregate supply

1. Short
run and long
run analyses

Sticky versus flexible wages and prices

3.Determinants of aggregate supply


Macroeconomic equilibrium

1.Real output and price level

2.Short and long run

3.Actual versus full
employment output

4.Economic fluctuations


Fiscal Policy

AS model


3.Political problems

Chapters 10,11,12

Read pages 172
226. Key terms, concepts, and graphs: investment schedule, aggregate expenditures
schedule, equilibrium GDP, recessionary and inflationary gap, aggregate demand
aggregate supply (AD
AS) model, det
erminants of aggregate demand, short
run aggregate supply curve, long
run aggregate
supply curve, determinants of aggregate supply, fiscal policy, expansionary and contractionary fiscal
policy, budget surplus, full
employment budget, political business cyc
le, crowding
out effect, , planned
investment, leakage, injection, aggregate demand, real
balance effect, interest
rate effect, foreign
purchases effect, aggregate supply, productivity, equilibrium price level and output, efficiency wages,
menu costs, buil
in stabilizer, progressive tax system, proportional tax system, cyclical deficit, crowding
out effect.

. Lecture on aggregate expenditure model and have students in
pairs complete activity

.Go over activity 19 and lecture on aggregate expenditure . Home learning

quick quiz questions

. Lecture on investment, determinants of investment, explain why changes in the interest rate
change the level of investment, and describe t
he effects of different interest elasticities of investment
demand. Have students begin activity 22 in pairs and
finish for home learning. (10/12

. Go over home learning and lecture on aggregate demand, why is downward sloping, describe
the factor
s that affect aggregate demand, and what shift the aggregate demand curve. Start activity 23
finish for home learning. (10/13

. Go over home learning. Lecture on aggregate supply. Define aggregate supply, explain why it
is upward sloping, the
factors that affect aggregate supply, and explain what factors will shift the
aggregate supply curve. Students pair up and work on activity 24 and fin
ish it for home learning. (10/14

Lesson 39
. Lecture on Short
Run equilibrium students in p
airs work on a
ctivity 25. (10/17

Lesson 40
. Go over activity 25 and lecture on demand and supply shocks. Students in pairs work on
activity 27 and fin
ish it for home learning. (10/18

Lesson 41
. Go over activity 27 and lecture on Short Run to Long Run. Have students
work on activity 28
in pairs and fin
ish it for home learning. (10/19

Lesson 42
. Go over activity 28 and lecture on the Long

Run economy. Have students in pairs work on
activity 29 and fin
ish it for home learning. (10/20

. Go over activity 29


. Qu
iz on chapters 10 and 11. (10/24

Lesson 45. Lecture on the tools of fiscal policy. Have students in pairs work on activity 30. (10/25).

Lesson 46. Go over activity 30. Lecture on automatic and discretionary fiscal policy. Have studen
ts in
pairs work on activity 31. (10/26).

Lesson 47. Go over activity 31 and lecture on the aggregate demand and aggregate supply models. Have
students in pairs work on activity 32. (10/27).

Lesson 48. Go over activity 32, Lecture on crowding out and inter
national impacts of fiscal policy. (11/1).

Lesson 49. Test on chapters 10,11,and 12.(11/2)

Lesson50. Free Response test. (11/3)

Lesson 50. Corrections (11/4)

Unit V: Financial Sector:





Money, banking, and financial markets.

1. Definition of financial assets: money, stocks, bonds.

2. Time value of money (present and future value).

3. Measure of money supply.

4. Banks and creation of money.

5. Money demand.

6. Mone
y market.

7. Loanable funds market.


Central bank and control of the money supply.

1. Tools of central bank policy.

2. Quantity theory of money.

3. Real versus nominal interest rates.

Chapters 13,14,15

Read pages 232
264. Key Concepts, graphs, and terms
: function of money, demand for money graph,
Federal Reserve System, Board of Governors, Federal Open Market Committee (FOMC), electronic
transactions, balance sheets, Federal funds rate, monetary multiplier, monetary policy, open market
operations, easy m
oney policy, tight money policy, velocity of money, cyclical asymmetry, inflation
targeting, m1,m2,m3, Federal Reserve notes, checkable deposits, commercial banks, thrift institutions,
money, transaction demand, asset demand, required reserves, reserv
e ratio, excess reserves,
actual reserves, discount rate, prime interest rate.

Lesson51. Lecture on properties of money, functions of money, definition of money and near
Have students in pairs work on activities 34 and 35. Home learning lesson 2 “t
he equation of

Lesson52. Go over home learning. Watch The Fed Today video and answer questions. (11/8)

Lesson53. Video “Open and Operating” with questions. (11/9)

Lesson54. Lecture on financial intermediaries, fractional reserve system,
creation of money, money
supply, required reserve ratio, required reserve, excess reserves, multiplier. (11/10).

Lesson 55. Continue lesson 54 students in pairs work on activity 37. (11/11).

Lesson 56. Lecture on structure of The Fed, tools, and basic bala
nce sheets. Students work on activity 38
in pairs finish for home learning. (11/14).

Lesson 57. Go over home learning. Lecture on money markets and monetary policy. (11/15).

Lesson 58. Continue lecture on money markets and monetary policy, students work on

activities 39 and
40 in pairs and finish for home learning. (11/16).

Lesson59.Go over home learning. Lecture on interest rates and monetary policy in the short run and the
long run. (11/17).

Lesson 60. Continue lecture students work on activity 41 in pair
s. For home learning students work on
activity 42. (11/18).

Lesson 61. Go over activity 42. Home learning study for test chapters 13,14,15.(11/21).

Lesson62. Free response test. (11/22)

Lesson63. Objective test (11/23).

Lesson64. Corrections (11/28).

VI :Inflation, Unemployment, and Stabilization Police
s 1

week (20


Fiscal and Monetary policies.


side effects.


side effects.


Policy mix.


Government deficits and debt.


Loanable funds market.


Inflation and

1. Types of inflation.

a. Demand
pull inflation.

b. Cost
push inflation.

2. The Phillips curve: short run versus long run.

3. Role of expectations.

Unit VII: Economic Growth and Productivity 1 week (5


Investment in human capital.


Investment in physical capital.


Research and development, and
technological progress.


Growth policy.

Chapters 16, 17, 18.

Read 292
337. Key Concepts ,graphs, and terms: Phillips curve, short run, long run, aggregate supply
shocks, supply
side economics, Laffer curve, economic growth, growth accounting, new economy,
network effects, social security trust fund, external public debt, stagflation, disinflation, labor
productivity, infrastructure, human capital, economics of scale, public debt, U.S. securities, annually
balanced budget, cyclically balanced budget, functio
nal finance, public investments, loanable funds

Lesson65.Review effects of monetary policy and fiscal policy on output, the price level and interest
rates. Discuss lags associated with stabilization policy. Students work on activity 43 in pairs. (1

Lesson66. Go over activity 43. Lecture on crowding
out. Use aggregate demand and aggregate supply
analysis to show the effects of crowding
out on output and the price level. Students in pairs work on
Part A activity 44 in class.(11/30)

Lesson67. Go o
ver Part A activity 44. Lecture on loanable funds market. Students complete part B and C
in pairs in class. Home learning Loanable funds worksheet. (12/1).

Lesson68. Go over loanable funds Parts B and C and home learning worksheet. (12/2)

Lessson69. Lectur
e on monetary and fiscal policy interactions short run vs. long run. Students in pairs
complete activity 45.Finish for home learning. (12/5)

Lesson70. Go over activity 45. Review loanable funds market, money markets, and the aggregate
demand and aggregate
supply model. (12/6)

Lesson71. Lecture on the short
run and long
run Phillips curve. (12/7).

Lesson72. Students complete activity 46. Review in class. (12/8).

Lesson73. Lecture on economic growth, including sources of economic growth and measurement.
nts in pairs complete activity 47. (12/9).

Lesson74. Review Parts B and C of activity 47. Show Keynes vs. Hayek video. Lecture on issues and
disagreements among economists. Students in pairs work on activity 48. Finish for home learning.


Review activity 48. Review for test. (12/13).

Lesson76. Multiple choice test. (12/14).

Lesson77. Test corrections. (12/15).

Lesson78. Free Response corrections. (12/16).

Unit VIII: Open Economy: International Trade and Finance 1 Week (10


Balance of payments accounts.


Balance of trade.


Current account.


Financial account (Capital)


Foreign exchange market.

1. Demand for and supply of foreign exchange.

2. Exchange rate determination.

3. Currency appreciation and depreciation.


Net exports
and capital flows.


Links to financial and goods markets.

Chapters 37 and 38

Read pages 690
727. List of key concepts, graphs, and terms: Principle of comparative advantage, terms
of trade, export supply curve, import demand curve, strategic trade policy, b
alance of payments, current
account, financial account, flexible
or floating
rate system, currency interventions, exchange
controls, Bretton Woods system, International Monetary Fund (IMF), appreciation and depreciation of
currency, labor
e goods, land
intensive goods, capital
intensive goods, cost ratio, world price,
domestic price, tariffs, revenue tariff, protective tariff, import quota, nontariff barrier (NTB), dumping,
World Trade Organization (WTO), trade deficit, trade surplus, offic
ial reserves, gold standard,
devaluation, exchange rates.

Lesson79:Review comparative advantage and production possibilities. Discuss gains from trade.
Students in pairs complete activity 49. Review activity 49. Home learning activity 50. (1/2).

Lesson 80
. Go over activity 50. Lecture on barriers to trade. Students in pairs work on activity 51 and
complete for home learning. (1/3).

Lesson81. Go over activity 51. Lecture on international finance. Students in pairs work on activity 52.
Complete for home lear
ning. (1/4).

Lesson82. Go over activity 52. Review foreign exchange market. Students in pairs work on activity 53.
Complete for home learning. (1/5).

Lesson83.Go over activity 53. Review monetary and fiscal policy and their effects on interest rates.
learning students complete activity 54. (1/9).

Lesson84. Review activity 54. Home learning review for free response and multiple choice final

Lesoon85. Commanding Heights of the economy video and questions.(1/11

Lesson86. Free respons
e final.

Lesson 87. Multiple choice final.