AP Macroeconomics Unit I: Basic Economic Concepts

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AP Macroeconomics


Unit I: Basic Economic Concepts


1.

Lesson 1: Basic Economic Tools


1.0

Lesson Overview: Basic Economic Tools

The first lesson of the AP Macroeconomics course will provide you with
the skills you need to create, use and understand charts an
d graphs.
These are the basic tools you will need to conduct and meaningfully
understand economic analysis of numerical data. You will also begin to
think of economics as a social science, using many of the same
methodologies as other sciences.


1.1

Brain
Builder: Investigate Graphing

The study of economics involves analyzing lots of numerical data. Two
tools economists use to do this are tables and graphs. This activity will
introduce (or review) some of the things you'll need to know about graphs
and tabl
es.


1.2

Brain Builder: Investigate Economics as Science

Economics is a social science. That means economists use many of the
same methods that other scientists

paleontologists, biologists,
sociologists

use. This activity will introduce the scientific method,
which
economists use, as well as introduce some common mistakes that all
scientists can make when using the scientific method. You'll also look at
some special difficulties economists face that some other scientists don't.


2.

Lesson 2: What is Economics?


2.0

Lesson Overview: What is Economics?

This lesson will give you a concrete understanding of what economics is.
You will learn some of the basic concepts of economics such as scarcity,
markets, and factors of production, and you will have a chance to explor
e
their meanings and applications in the world. At the end of this lesson,
you will be meeting your fellow students, getting to know one another,
and sharing some of your own thoughts and ideas about economics.



2.1

Tutorial: Introduction to Economics

A.

Ov
erview

B.

What is Economics?

C.

Scarcity, Wants, and Resources

D.

Scarcity and Value

E.

Markets

F.

Summary

G.

Self Check


2.2

Online Exercise: Investigate Basic Concepts

In this activity you're going to look at the field of economics and study
some of the basic concepts that c
ome up again and again in economic
analysis. These include scarcity, the factors of production, goods and
services, and markets. you'll also consider how scarcity affects the
price of a good or service in a market system and what determines the
scarcity of

a good or service.



2.3

Tutorial: Economic Systems

A.

Overview

B.

Three Fundamental Questions

C.

Different Ways to Organize an Economic System

D.

The U.S.: A Mixed Economy

E.

Four Economic Goals

F.

Summary

G.

Self Check



2.4

Online Exercise: Investigate Economic Systems

B
ecause all nations, or groups of people, are faced with scarcity,
they've been forced to develop economic systems that address some
basic questions common to them all. But that doesn’t mean all
economic systems in the world are the same. In this activity w
e'll look
at the similarities and differences of economic systems.



2.5

Discussion: Welcome to Macroeconomics

In this discussion students will introduce themselves to the class, get
to know the other students as well as the online instructor, and discuss

any current economic news they’re aware of.


3.

Lesson 3: Production, Costs, and Trade


3.0

Lesson Overview: Production, Costs, and Trade

In addition to bringing in some new vocabulary, this lesson focuses on
two main elements. First you will take a clos
e look at the terms cost
and benefit; you will gain a clear understanding of their meanings and
uses in economic analysis. Second, you will learn about and explore a
new concept: the production possibilities frontier.


3.1

Tutorial: Costs and Benefits

A.

Ove
rview

B.

Self Interest and Net Benefits

C.

Costs Are Opportunity Costs

D.

Sunk Costs

E.

Positive and Normative Economics

F.

Summary

G.

Self Check



3.2

Online Exercise: Investigate Costs and Benefits

Much of economics is a process of weighing the costs and benefits of a
dec
ision. In this activity, we'll consider which costs and benefits to
consider (and which to not consider), as well as how to determine if
the benefits of a decision outweigh its costs.


3.3

Tutorial: Production Possibilities Frontier

A.

Overview

B.

The Producti
on Possibilities Frontier

C.

PPF

and Opportunity Costs

D.

PPF

and efficiency

E.

Shifts of the
PPF

F.

Summary

G.

Self Check


3.4

Brain Builder: Investigate the
PPF

The production possibilities frontier (PPF) is a simple yet powerful way
to analyze the amount of productio
n an economy is capable of with a
given amount of resources. This activity will give you lots of
opportunities to work with PPFs and the associated concepts of
efficiency, inefficiency, and unattainable production.


3.5

Tutorial: Individual Production and

Trade

A.

Overview

B.

Absolute Advantage

C.

Comparative Advantage

D.

Trade Between Individuals

E.

Summary

F.

Self Check


3.6

Brain Builder: Investigate Comparative Advantage

The concepts of absolute advantage and comparative advantage are
key to economic discussions of pr
oduction, specialization, and trade.
This activity will give you a chance to work with both; you'll use them
to analyze production, determine who should specialize in what kind of
production, and consider the likely terms of trade between two
producers.


3.7

D
iscussion: Comparative Advantage

In this discussion, students will use their understanding of comparative
advantage to analyze a scenario about the production capabilities of
two nations, and pose a similar question for the next student.



3.8

Tutorial:
National Production and Trade

A.

Overview

B.

Specialization

C.

PPF

for a Society

D.

International Trade: A Positive View

E.

International Trade: A Normative View

F.

Summary

G.

Self Check


3.9

Online exercise: Investigate Trade

The subject of trade is at the heart of economic
s. In this activity you'll
consider it closely, with an eye on such concepts as absolute
advantage, comparative advantage, opportunity cost, and
specialization.


3.10

Assignment: Apply Concepts of Production and Trade

This activity will call on you to bri
ng together lots of the material
you've learned regarding trade (between individuals as well as
nations) and show an understanding of how they work together. You
will be called on not only to know what a term means but also to apply
the term or concept in
real
-
life situations.


4

Lesson 4: Demand and Supply


4.0

Lesson Overview: Demand and Supply

In this lesson you will be learning about and exploring the principles of
supply and demand. Through Tutorials and Brain Builders you will
develop a working unders
tanding of how these principles operate, and
how they relate to one another in an economic context.


4.1

Tutorial: Demand

A.

Overview

B.

Demand

C.

Change in Quantity Demanded

D.

Change in Demand

E.

Price Elasticity of Demand

F.

Summary

G.

Self Check


4.2

Brain Builder: Investigat
e Demand

Much of economic analysis is concerned with supply and demand. In
this activity you'll get to work with demand, the buyer's side of a
market. You'll use graphs and other methods of analysis to work with
topics such as demand, a change in quantity
demanded, and a change
in demand.


4.3

Tutorial: Supply

A.

Overview

B.

Change in Quantity Demanded

C.

Change in Supply

D.

Price Elasticity of Supply

E.

Summary

F.

Self Check


4.4

Brain Builder: Investigate Supply

Much of economic analysis is concerned with supply and dema
nd. In
this activity you'll get to work with supply, the producer's side of a
market. You'll use graphs and other methods of analysis to work with
topics such as supply, a change in quantity supplied, and a change in
supply.


4.5

Tutorial: Equilibrium

A.

Ov
erview

B.

Equilibrium

C.

Change in Demand

D.

Change in Supply

E.

Change in Demand and Supply

F.

Price Ceilings and Price Floors

G.

Summary

H.

Self Check


4.6

Brain Builder: Investigate Equilibrium

Much of economic analysis is concerned with supply and demand. In
this activity

you'll get to put these two together to study markets and
the concepts of equilibrium and disequilibrium. You'll use graphs and
other methods of analysis to see how changes in demand, supply, or
both, influence market equilibrium. You'll also consider gov
ernment
intervention in a market in the form of price ceilings and price floors.


4.7

Assignment: Apply Tools of Market Analysis

This activity will call on you to bring together lots of the material
you've learned regarding supply, demand, and market equ
ilibrium, and
show an understanding of how they work together. You'll be called on
not only to know what a term means but also to apply the term or
concept in real
-
life situations.


4.8

Vocabulary Builder: Basic Economic Concepts

In this activity students will

complete a crossword that quizzes their
understanding of key terms and concepts from this unit.


5.

Lesson 5: Unit Wrap
-
Up


5.0

Lesson Overview: Unit Wrap
-
Up

This lesson will review the material from Unit 1, and give you an
opportunity to check your progr
ess with a quiz.


5.1

Discussion: Cram Session

Use this cram session to get ready for your Unit Quiz by discussing any
interesting or confusing issues with other students.


5.2

Unit 1 Review

Use this activity to review what you’re learned in this unit and prepare

for the unit quiz. A series of un
-
graded sample questions is included to
test your understanding of key concepts from the unit.


5.3

Unit 1 Quiz

This activity will quiz your understanding of the main concepts in the
unit. The quiz will follow the format of th
e AP Exam as much as
possible.


Unit II: Macroeconomic Variables


1.

Lesson 1: Gross Domestic Product


1.0


Lesson Overview: Gross Domestic Product

An economy is made up of different sectors, or different groups of
people. You'll look at the spending and inc
ome of the different sectors
of an economy and see how these relate to each other. You'll also look
at a measure of the over
-
all level of economic activity in an economy:
gross domestic product.


1.1

Tutorial: Circular Flow

A.

Overview

B.

Sectors

C.

Markets

D.

Expend
itures

E.

Income

F.

Circular Flow

G.

Summary

H.

Self Check


1.2

Brain Builder: Investigate Circular Flow

This activity will deepen your understanding of circular flow. Draw and
explain the circular flow of economic activity for a complex economy
and describe some of the i
nterrelationships that contribute to circular
flow.

1.3

Tutorial: National Income

A.

Overview

B.

Gross Domestic Product

C.

Income and Expenditure

D.

Leakages and Injections

E.

National Income Accounts

F.

Summary

G.

Self Check


1.4

Brain Builder: Investigate National Income

Use your kn
owledge of GNP, GDP, and other national income accounts
to get a clear picture of how national income is used in economic
analyses and in the making of economic decisions and policies.


1.5

Assignment: Apply Concepts of National Income

In this Assignment, tak
e the terms and concepts of national income
you have been studying, and apply them to real world situations. You
will see that many factors must be considered in economic decision
-
making.


2.

Lesson 2: Business Cycles and Unemployment


2.0

Lesson Overview: Bu
siness Cycles and Unemployment

GDP does not stay constant, at least in the complex modern
economies of today's developed nations. Instead, the level of
economic activity fluctuates over time; this fluctuation is called the
business cycle. Just as the level

of economic activity fluctuates, so
does the level of unemployment. In this lesson, you'll look at the
business cycle and then turn your attention to unemployment.



2.1

Tutorial: The Business Cycle

A.

Overview

B.

Changes in Real GDP

C.

Changes Over Time

D.

Real GDP,

Unemployment, and Other Variables

E.

Case Study: Business Cycle

F.

Summary

G.

Self check


2.2

Discussion: Future of the U.S. economy

This discussion will be an opportunity to apply your understanding of
the business cycle. Using the examples and economic trends you ha
ve
seen so far, draw your own conclusions and make your own
predictions.


2.3

Tutorial: Unemployment

A.

Overview

B.

Types of Unemployment

C.

Full Employment

D.

Costs of Unemployment

E.

Summary

F.

Self Check


2.4

Online Exercise: Investigate Unemployment

It is important to understa
nd the distinction between not being
employed and being unemployed. This Exercise will give you a chance
to clarify the definitions of terms used in the study of unemployment,
and explore the four types of unemployment in more depth.


2.5

Assignment: Apply Kno
wledge of Unemployment

Use what you have learned about unemployment to explore real world
problems and solutions. What other economic factors have you studied
that influence unemployment? In this Assignment, you will relate those
factors to various unemplo
yment scenarios.



3.

Lesson 3: Inflation


3.0

Lesson Overview: Inflation

Inflation is a general increase in prices and wages, which means that
many, but not all, prices increase. It is complicated to measure, and
you'll have an opportunity to look closely at

the complexity of
measuring inflation. Inflation can provide very valuable information
about other variables in an economy, such as income, interest, and
GDP. Inflation also imposes costs on the people of an economy. In this
lesson, you'll look at many of

the issues associated with inflation.



3.1

Tutorial: CPI

A.

Overview

B.

CPI

C.

Measuring Inflation

D.

Issues with the CPI

E.

Summary

F.

Self Check


3.2

Discussion: List Your Own “Market Basket”

In this activity you’ll be asked to describe what you think the typical
market ba
sket would include for a college student.



3.3

Brain Builder: Investigate Inflation

In this Brain Builder, you will explore issues related to inflation, and
the methods and price indexes used to calculate and track inflation as
it occurs. What are some o
f the effects of inflation on consumers like
you?


3.4

Tutorial: Interest Rates

A.

Overview

B.

Interest Rates

C.

Components of Interest Rates

D.

Types of Interest Rates

E.

Investment

F.

Stocks, Bonds, and More

G.

Summary

H.

Self Check


3.5

Brain Builder: Investigate Interest Rates

Take

a closer look at interest rates and the relationships between
interest rates and other economic factors such as inflation and the CPI.
You’ll also consider situations in which people dealing with interest
rates bear costs or reap benefits from unanticipat
ed inflation. Do
substitution bias, “dating” of goods, and other discrepancies in indexes
like the CPI and PPI affect interest rates, and if so, how?


3.6

Tutorial: Inflation and Real Variables

A.

Overview

B.

Sources of Inflation

C.

Real Variables

D.

Costs of Inflation

E.

C
ase Study: Argentina and Inflation

F.

Summary

G.

Self Check


3.7

Brain Builder: Investigate Real Variables

Explore the important distinction between nominal variables and real
variables

which economists use to account for inflation
--
in this
Exercise. You will learn
the applications and uses of nominal and real
indicators such as GNP and GDP. This Brain Builder will show you how
these indicators can be used to make valuable analyses of economic
trends over periods of time.


3.8

Assignment: Apply Knowledge of Inflation

Thi
s Assignment is an opportunity for you to apply the concepts and
relationships regarding inflation and interest rates you have been
studying to real world situations. Put yourself in the shoes of economic
decision makers, and examine the effects of those d
ecisions on
everyday people.


4.

Lesson 4: GDP in the Long Run



4.0

Lesson Overview: GDP in the Long Run

While RGDP fluctuates a lot in the short run, it increases at a fairly
steady rate in the long run, at least in modern developed economies.
Does this

mean the people in an economy are better off? You'll look at
the use of RGDP as an indication of economic well
-
being, and explore
the sources of long term economic growth.


4.1

Tutorial: Long
-
Term Growth

A.

Overview

B.

Measuring Growth

C.

Sources of Growth

D.

Saving vs.

Spending

E.

Summary

F.

Self Check


4.2

Online Exercise: Investigate Long
-
Term Growth

One of the main goals of most or all economies is stable growth. There
is a need for balance between short
-

and long
-
term growth in any
economy. Take a close look at the facto
rs contributing to and limiting
long
-
term growth, as well as issues related to measuring growth.


4.3

Discussion: Conflict of Short
-

and Long
-
Term Growth

What’s better, long
-
term growth or short
-
term growth? If you were an
economic policy maker, what would you

do to encourage people to act
in a way that supports your view? You and your classmates will share
your impressions and opinions in this discussion.


4.4

Vocabulary Builder: Macroeconomic Variables

In this activity students will complete a crossword that quiz
zes their
understanding of key terms and concepts from this unit.


5

Lesson 5: Unit Wrap
-
Up


5.0

Lesson Overview: Unit Wrap
-
Up

This lesson will review the material from Unit 1, and give you an
opportunity to check your progress with a quiz.


5.4

Discussion: C
ram Session

Use this cram session to get ready for your Unit Quiz by discussing any
interesting or confusing issues with other students.


5.5

Unit 2 Review

Use this activity to review what you’re learned in this unit and prepare
for the unit quiz. A series of
un
-
graded sample questions is included to
test your understanding of key concepts from the unit.


5.3

Unit 2 Quiz

This activity will quiz your understanding of the main concepts in the
unit. The quiz will follow the format of the AP Exam as much as
possibl
e.


Unit III: The
AD/AS

Model


1.

Lesson 1: Aggregate Demand


1.0

Lesson Overview: Aggregate Demand

Economists typically divide the people in an economy into consumers,
people who buy stuff, and producers, people who make and sell stuff.
In macroeconomic anal
ysis, the concept of aggregate demand
captures the consumer side of the economy. In this lesson, you'll
investigate this powerful tool for analyzing and predicting changes in
the economy.



1.1

Tutorial: Aggregate Demand

A.

Overview

B.

Aggregate Demand

C.

Changes
in the Price Level

D.

Changes in Aggregate Demand

E.

Summary

F.

Self Check


1.2

Online Exercise: Investigate Aggregate Demand, Part 1

In this exercise, you will work with the concepts of aggregate demand
and price level. You will explore how changes in these two factor
s
interrelate and influence one another, and familiarize yourself with the
formulas, tables, and charts used to represent aggregate demand.


1.3

Brain Builder: Investigate Aggregate Demand, Part 2

Take your exploration of aggregate demand further with this Ex
ercise,
focusing on computation and graphing.


2.

Lesson 2: Aggregate Supply


2.0

Lesson Overview: Aggregate Supply

Economists typically divide the people in an economy into consumers,
people who buy stuff, and producers, people who make and sell stuff.
In ma
croeconomic analysis, the concept of aggregate supply captures
the producer side of the economy. In this lesson, you'll investigate this
powerful tool for analyzing and predicting changes in the economy.


2.1

Tutorial: Aggregate Supply

A.

Overview

B.

Full Capac
ity

C.

Shape of AS Curve

D.

Shifts of AS

E.

Summary

F.

Self Check


2.2

Online Exercise: Investigate Aggregate Supply, Part 1

In this exercise, you will work with the concepts of aggregate supply
and price level. You will explore how changes in these two factors
interrela
te and influence one another, and familiarize yourself with the
formulas, tables, and charts used to represent aggregate supply.


2.3

Brain Builder: Investigate Aggregate Supply, Part 2

Take your exploration of aggregate supply further with this Exercise,
focu
sing on computation and graphing.


3.

Lesson 3:
AD/AS

Equilibrium


3.0

Lesson Overview:
AD/AS

Equilibrium

The model of aggregate demand and aggregate supply captures the
basic elements of an economy. It reveals the effects of changes in
consumer or producer b
ehavior on the level of RGDP and the price
level. You'll examine that model and investigate the difference
between those effects in the short run and in the long run.


3.1

Tutorial: Short
-
Run
AD/AS

Equilibrium

A.

Overview

B.

Short
-
Run Equilibrium

C.

Demand Shock

D.

S
upply Shock

E.

Summary

F.

Self Check


3.2

Online Exercise: Investigate Short
-
Run
AD/AS

Equilibrium, Part
1

In this activity you’ll bring AD and AS together on one graph to
investigate equilibrium. You’ll also investigate how the economy moves
to an equilibrium price

level and RGDP in cases of disequilibrium,
including demand shocks and supply shocks.


3.3

Brain Builder: Investigate Short
-
Run
AD/AS

Equilibrium, Part 2

In this activity you’ll further your investigations of equilibrium in the
AD/AS model in the short run,
with an emphasis on computation and
graphing. You’ll do lots of work with analyzing the economy’s
movement away from, and to, equilibrium.


3.4

Assignment: Apply Concepts of Short
-
Run Equilibrium

Here you’ll take the concepts you’ve learned about short run AD
/AS
equilibrium and apply them to real life concepts.


3.5

Tutorial: Long
-
Run
AD/AS

Equilibrium

A.

Overview

B.

Full Employment

C.

Long
-
run Aggregate Supply

D.

Changes in Long
-
run Equilibrium

E.

Summary

F.

Self Check


3.6

Online Exercise: Investigate Long
-
Run
AD/AS

Equilibrium, Pa
rt
1

In this activity you’ll investigate AD/AS equilibrium in the long run,
with an eye on issues such as full employment, the long
-
run AS curve
(not the same as the short run AS curve).


3.7

Brain Builder: Investigate Long
-
Run
AD/AS

Equilibrium, Part 2

In th
is activity you’ll focus on computational and graphing issues
related to long
-
run AD/AS issues, including changes in aggregate
supply.


3.8

Discussion: Pros and Cons of Saving

In this discussion you’ll consider the savings rates of different nations,
such as
the U.S. and Japan, discuss the effect the savings rate has on
each nation, and explain what savings rate you believe is optimal for a
nation.


3.9

Assignment: Apply Concepts of
AD/AS

In this activity you’ll synthesize the issues you’ve learned regarding
AD/A
S to answer real
-
life questions analyzing a nation’s price level and
level of RGDP.


3.10

Vocabulary Builder: The
AD/AS

Model

In this activity students will complete a crossword that quizzes their
understanding of key terms and concepts from this unit.


4.

Less
on 4: Unit Wrap
-
Up


4.0

Lesson Overview: Unit Wrap
-
Up

This lesson will review the material from Unit 3, and give you an
opportunity to check your progress with a quiz.


4.1

Discussion: Cram Session

Use this cram session to get ready for your Unit Quiz by dis
cussing any
interesting or confusing issues with other students.


4.2

Unit 3 Review

Use this activity to review what you’re learned in this unit and prepare
for the unit quiz. A series of un
-
graded sample questions is included to
test your understanding of key

concepts from the unit.


4.3

Unit 3 Quiz

This activity will quiz your understanding of the main concepts in the
unit. The quiz will follow the format of the AP Exam as much as
possible.


Unit IV: The Keynesian Model


1.

Lesson 1: The Keynesian Model


1.0

Le
sson Overview: The Keynesian Model

Before there was the aggregate demand/aggregate supply model of
the economy, John Maynard Keynes developed his own model
describing the economy. In this lesson, you will explore the Keynesian
model and see how it captures

changes in the economy.


1.1

Discussion: The Great Depression

In this discussion share what you know about the experience of he
Great Depression. Do you know anyone who lived through the Great
Depression? Discuss the social as well as the economic effect
s of the
Great Depression.


1.2

Tutorial: The Keynesian Model, Part 1

A.

Overview

B.

Consumption

C.

MPC

D.

Changes in Consumption

E.

Investment

F.

Summary

G.

Self Check


1.3

Online Exercise: Investigate the Keynesian Model, Part 1

This Exercise focuses on the roles and relat
ionships of consumption
and investment in the Keynesian Model. You will examine how the
Keynesian Model accounts for the factors of consumption and
investment.


1.4

Brian Builder: Investigate the Keynesian Model, Part 2

Expand you application of the Keyne
sian Model in this Brain Builder.
You will gain a greater understanding of the Keynesian Model by
graphing the elements of consumption and investment.


1.5

Tutorial: The Keynesian Model, Part 2

A.

Overview

B.

Aggregate Expenditures

C.

Keynesian Equilibrium

D.

Changes

in Equilibrium

E.

Summary

F.

Self Check


1.6

Online Exercise: Investigate the Keynesian Model, Part 3

The questions in this Exercise will get you thinking about aggregate
expenditure and changes in equilibrium in the terms of the Keynesian
Model.


1.7

Brain Bui
lder: Investigate the Keynesian Model, Part 4

This Brain Builder will help make you more familiar aggregate
expenditure and changes in equilibrium by having you graph those
elements and apply them in the Keynesian model.



1.8

Assignment:


Apply Concepts
of the Keynesian Model

Take a broader look at all elements of the Keynesian model in this
Assignment. Synthesize the different concepts you have been working
with to build a comprehensive perspective on the Keynesian Model.


2.

Lesson 2: Keynes in
AD/AS



2.0

Lesson Overview: Keynes in
AD/AS

Putting the Keynesian model into the model of aggregate
demand/aggregate supply allows us to compare and contrast the two
models. Before we can contrast them, we must find how they are
similar. This lesson will let you

draw the similarities and compare the
differences between the AD/AS and the Keynesian models.



2.1

Tutorial: Keynes in
AD/AS

A.

Overview

B.

Sticky Prices

C.

AS Curve

D.

AD Curve

E.

Economic Change

F.

Summary

G.

Self Check


2.2

Online Exercise: Investigate the Keynesian Mod
el in
AD/AS

Framework

In addition to giving a closer look at the concept of sticky prices, this
exercise will examine the similarities between the Keynesian and
AD/AS Models.



2.3

Assignment: Apply the Keynesian Model in
AD/AS

Framework

This Assignment w
ill give you some more practice graphing with the
Keynesian and AD/AS models. You will synthesize what you have
learned about these two models and see how they relate to one
another.


3.

Lesson 3: Fiscal Policy


3.0

Lesson Overview: Fiscal Policy

The Keyn
esian model has significant policy implications for a national
government. It recommends actively increasing and decreasing
government spending and taxation to even out the business cycle.
You'll explore the effects of these activities according to the Key
nesian
and AD/AS models. You'll also investigate the size and types of
government spending.


3.1

Tutorial: Fiscal Policy

A.

Overview

B.

Keynesian Analysis

C.

AD/AS

Analysis

D.

Fiscal Policy Today

E.

Summary

F.

Self Check


3.2

Online Exercise: Investigate Fiscal Policy, Pa
rt 1

Take a closer look at the concept of fiscal policy. In this Exercise, you
will come to better understand and more clearly define the effects of
fiscal policy.


3.3

Brain Builder: Investigate Fiscal Policy, Part 2

In this Exercise, you will continue w
orking with the effects of fiscal
policy, practice graphing the effects of fiscal policy, and apply and
calculate the multiplier effect.


3.4

Discussion: Balanced Budget Amendment

With your classmates, discuss what you see as the pros and cons of
the Bala
nced Budget Amendment. Are you for or against the
amendment? Explain how you reached your conclusions.


3.5

Tutorial: Government Spending and Taxation

A.

Overview

B.

Tax and Spend

C.

Debt and Deficit

D.

Crowding Out

E.

Summary

F.

Self check


3.6

Brain Builder: Investigate

Government Spending and Taxation

Using the AD/AS model, take a look at the “crowding out” effect, and
explore its implications in terms of government taxation and spending.


3.7

Assignment: Apply Concepts of Fiscal Policy

Pull together everything you hav
e studied about fiscal policy. In
answering these questions, draw connections and interrelations
between different concepts. Try to look at fiscal policy as a whole.


3.8

Vocabulary Builder: The Keynesian Model

In this activity students will complete a cr
ossword that quizzes their
understanding of key terms and concepts from this unit.



4.

Lesson 4: Unit Wrap
-
Up


4.0

Lesson Overview: Unit Wrap
-
Up

This lesson will review the material from Unit 4, and give you an
opportunity to check your progress with a qu
iz.


4.1

Discussion: Cram Session

Use this cram session to get ready for your Unit Quiz by discussing any
interesting or confusing issues with other students.


4.2

Discussion: You Be the Teacher!

In this discussion you and your fellow students will see a free
-
res
ponse
question that's similar to the ones used on the AP Exam, as well as a
correct but incomplete answer to the question. Your job is to explain
how to make the answer better.



4.3

Unit 4 Review

Use this activity to review what you’re learned in this unit an
d prepare
for the unit quiz. A series of un
-
graded sample questions is included to
test your understanding of key concepts from the unit.


4.4

Unit 4 Quiz

This activity will quiz your understanding of the main concepts in the
unit. The quiz will follow the for
mat of the AP Exam as much as
possible.


Unit V: Money


1.

Lesson 1: Money and Banks


1.0

Lesson Overview: Money and Banks

Money is everywhere, because money is what we use most often to
get the goods and services we want. People talk about having money,
want
ing money, using money, and so on. In this lesson, you'll discover
the definition of money and explore the idea of money demand. You'll
also look at the foundation of the modern U.S. economy, the banking
system, and explore how the banking system affects t
he quantity of
money in the economy.


1.1

Tutorial: Money Demand

A.

Overview

B.

People on the Street: What is Money?

C.

Functions of Money

D.

Examples of Money

E.

Liquidity

F.

Money demand

G.

Summary

H.

Self Check


1.2

Brain Builder: Investigate Money Demand

Using graphing as
your exploratory tool, take a look at the issue of
money demand. Look into the elements of investment and the function
of money, and practice calculating the quantity of money.


1.3

Tutorial: The Banking System

A.

Overview

B.

fractional reserve banking

C.

The fede
ral Reserve

D.

Disintermediation

E.

History of the U.S. Banking System

F.

Summary

G.

Self check


1.4

Online Exercise: Investigate the Banking System

This short series of questions will lead you in your investigation of the
banking system. Follow how the banking syste
m operates, and what
external and internal factors influence its operations.


1.5

Tutorial: Money Creation

A.

Overview

B.

Money creation

C.

Money Multiplier

D.

Money Supply

E.

Summary

F.

Self check


1.6

Brain Builder: Investigate Money Creation

In this Brain Builder, you
will look at and examine some examples of
money creation, and analyze how that process works. You will also
look into the issue of the money supply, and practice using the money
multiplier.


1.7

Assignment: Apply Concepts of Banking and Money Creation

Tak
e a more comprehensive look at the banking system and the
process of money creation. Explore the relationship between money
creation and the structure of the banking system.


2.

Lesson 2: Monetary Policy


2.0

Lesson Overview: Monetary Policy

The U.S. central
bank, the Federal Reserve, uses the quantity of
money in circulation in the economy to control the business cycle. By
correctly anticipating and responding to economic change, the Fed can
slow down inflation or head off a recession. This activity by the Fe
d is
called monetary policy. You'll explore the goals, tools, and effects of
monetary policy in the modern U.S. economy.


2.1

Tutorial: Goals and Tools of Monetary Policy

A.

Overview

B.

Tools

C.

Required Reserve Ratio

D.

Discount Rate

E.

Open market operations

F.

Summary

G.

S
elf check


2.2

Online Exercise: Investigate Monetary Policy

In this Exercise, you will look at the tools of monetary policy. What
resources to policymakers have at their disposal to formulate policy,
and to implement the policies they make? Look more clos
ely at
concepts such as required reserve ratio, discount rate, and open
market operations.


2.3

Tutorial: Effects of Monetary Policy

A.

Overview

B.

Monetary Policy

C.

Contractions and Expansions

D.

Stagflation and the Fed

E.

Monetarism

F.

Summary

G.

Self Check


2.4

Online Exe
rcise: Investigate Effects of Monetary Policy, Part 1

In this exercise you'll take an in depth look at the effects of monetary
policy. How does a contractionary policy affect the economy, and why?
And what about an expansionary policy? Does the Keynesian
analysis
of monetary policy differ from the AD/AS analysis, and does it matter
at what level the economy is operating? These are some of the issues
you'll look at.


2.5

Brain Builder: Investigate Effects of Monetary Policy, Part 2

In this exercise you'll
take an in depth look at the effects of monetary
policy, with a particular emphasis on graphing and computation. You'll
look at the effects of contractionary and expansionary monetary policy
at different production levels of the economy, as well as conside
r
issues such as stagflation and monetarism.


2.6

Assignment: Apply Concepts of Monetary Policy

In this activity you'll have a chance to bring together all your
knowledge of monetary policy and apply them to questions regarding
real
-
life issues faced by e
conomic policy makers at the Fed (or other
central banks).


2.7

Discussion: The Fed

In this Discussion you'll have an opportunity to talk about the Fed. It's
a free
-
for
-
all, as long as your comment is related to the Fed. Maybe
it's something they're curre
ntly doing, or a look back at an influential
Fed Chairperson, or your opinion about what they should do in the
future.


3.

Lesson 3: Monetary and Fiscal Policy


3.0

Lesson Overview: Monetary and Fiscal Policy

Governments have two methods for decreasing econom
ic fluctuations.
If a government uses fiscal policy, it changes its spending or taxation.
If a government uses monetary policy, it changes the amount of
money in the economy. Many governments use both methods
simultaneously. In this lesson, you'll see the
combined effects of
monetary and fiscal policies.


3.1

Tutorial: Monetary and Fiscal Policy

A.

Overview

B.

Laissez
-
Faire debate

C.

Expectations

D.

Other Implications

E.

Case Study: Monetary and Fiscal Policy

F.

Summary

G.

Self Check


3.2

Online Exercise: Investigate Monetary

and Fiscal Policy, Part 1

In this activity you'll get a chance to further consider the effectiveness
of fiscal and monetary policy to produce economic change. Key issues
to consider will include the Phillips curve, expectations theories, the
natural rate
hypothesis, and supply
-
side economics.


3.3

Brain Builder: Investigate Monetary and Fiscal Policy, Part 2

In this activity you'll get a chance to use your understanding of fiscal
and monetary policy to consider their impacts on the economy, with an
eye to
ward graphing and computation. You'll also consider how the
expectations of a nation's citizens can influence the effectiveness of
fiscal or monetary policy.


3.4

Assignment: Apply Concepts of Monetary and Fiscal Policy

In this activity you'll have a chan
ce to bring together all your
knowledge of monetary and fiscal policy's effects on a nation's
economy, as well as the interaction between these policies and the
expectations of the household sector.


3.5

Vocabulary Builder: Money

In this activity students

will complete a crossword that quizzes their
understanding of key terms and concepts from this unit.


4.

Lesson 4: Unit Wrap
-
Up


4.0

Lesson Overview: Unit Wrap
-
Up

This lesson will review the material from Unit 5, and give you an
opportunity to check your
progress with a quiz.


4.1

Discussion: Cram Session

Use this cram session to get ready for your Unit Quiz by discussing any
interesting or confusing issues with other students.


4.2

Discussion: You Be the Teacher!

In this discussion you and your fellow students w
ill see a free
-
response
question that's similar to the ones used on the AP Exam, as well as a
correct but incomplete answer to the question. Your job is to explain
how to make the answer better.


4.3

Unit 5 Review

Use this activity to review what you’re learne
d in this unit and prepare
for the unit quiz. A series of un
-
graded sample questions is included to
test your understanding of key concepts from the unit.


4.4

Unit 5 Quiz

This activity will quiz your understanding of the main concepts in the
unit. The quiz wi
ll follow the format of the AP Exam as much as
possible.


Unit VI: International Economics


1.

Lesson 1: Trade


1.0

Lesson Overview: Trade

As goods and services, including information, are transported more
easily around the world, the role of international t
rade in a nation's
economic health has grown considerably. In this lesson, you'll look at
the fundamentals of international trade, including the determination of
exchange rates and the difference between trade of goods and
services and trade of capital.


1
.1

Tutorial: Trade and Exchange Rates

A.

Overview

B.

Free trade

C.

Protectionism

D.

Exchange Rates

E.

Summary

F.

Self check


1.2

Online Exercise: Investigate Exchange Rates, Part 1

In this activity you'll work with some key issues in international trade,
considering barri
ers to trade, the benefits and costs of unregulated
trade, and exchange rates.


1.3

Brain Builder: Investigate Exchange Rates, Part 2

In this activity you'll work intensively on computational issues
involving international trade, particularly the exchange

rate.


1.4

Tutorial: Balance of Payments

A.

Overview

B.

Current Account

C.

Capital Account

D.

Balance of payments

E.

Summary

F.

Self check


1.5

Online Exercise: Investigate Balance of Payments

In this activity you'll work with the current account, capital account,
and ba
lance of payments to analyze international trade. The emphasis
will be on your understanding of the key issues and how they relate.


2.

Lesson 2: An Open Economy




2.0

Lesson Overview: An Open Economy

An open economy is an economy with few trade barriers, al
lowing for
the easy flow of imports and exports. Although a lack of trade barriers
generally makes an economy richer, it comes with its own set of
issues. In this lesson, you'll explore the implications of an open
economy and the effects of government poli
cy when there are few
trade barriers and active international exchange.


2.1

Tutorial: Government Policy in an Open Economy

A.

Overview

B.

One Price

C.

Fiscal Policy

D.

Monetary Policy

E.

Summary

F.

Self check


2.2

Online Exercise: Investigate Government Policy in an Open

Economy

In this activity you'll continue your exploration of international trade
by looking at government policy in an open economy, concentrating on
the effects of monetary and fiscal policy on exchange rates and the
balance of payments.


2.3

Assignment:

Apply Concepts of International Trade

In this assignment you'll have a chance to bring together all the
information you've learned to display a cohesive understanding of
issues related to international trade. These are issues real nations face
all the tim
e.


2.4

Vocabulary Builder: International Economics

In this activity students will complete a crossword that quizzes their
understanding of key terms and concepts from this unit.


3.

Lesson 3: Unit Wrap
-
Up


3.0

Lesson Overview: Unit Wrap
-
Up

This lesson w
ill review the material from Unit 3, and give you an
opportunity to check your progress with a quiz.


3.1

Discussion: Cram Session

Use this cram session to get ready for your Unit Quiz by discussing any
interesting or confusing issues with other students.



3.2

Discussion: You Be the Teacher!

In this discussion you and your fellow students will see a free
-
response
question that's similar to the ones used on the AP Exam, as well as a
correct but incomplete answer to the question. Your job is to explain
how
to make the answer better.


3.3

Unit 6 Review

Use this activity to review what you’re learned in this unit and prepare
for the unit quiz. A series of un
-
graded sample questions is included to
test your understanding of key concepts from the unit.


3.4

Unit

6 Quiz

This activity will quiz your understanding of the main concepts in the
unit. The quiz will follow the format of the AP Exam as much as
possible.


Unit VII: Preparing for the AP Exam


1.

Lesson 1: Preparing for the AP Exam


1.0

Lesson Overview: Prepari
ng for the AP Exam


1.1

Tutorial: AP Exam Preparation

A.

The Exam Format

B.

Preparing for the Exam

C.

Free
-
response Questions

D.

Exam day Tips


1.2

Final Course Review: Final Course Review

Review the materials from the course, starting with a short essay
reminding y
ou of the main topics covered in the course (and how they
relate). From there, you can read materials meant to provide a more
in
-
depth review as well as look at ungraded sample questions.


1.3

Assignment: Apply Macroeconomic Concepts

In this activity you'
ll be asked to apply concepts you learned
throughout the semester to show the depth of your understanding of
macroeconomic issues, as well as highlight the relevance of the
material to everyday life.


1.4

Independent Study: Practice Exam

This independent
study gives an ungraded AP
-
style exam. It's in the
same format as the AP Exam and is the same length. Put yourself in
test conditions, give yourself the appropriate amount of time, and
practice.


1.5

Discussion: Free
-
Response Questions



1.6

Online Exerci
se: Exam Preparation, Part 1



1.7

Online Exercise: Exam Preparation, Part 2



1.8

Online Exercise: Exam Preparation, Part 3



1.9

Final Exam: