Advanced Placement Macroeconomics – Semester I
Advanced Placement Microeconomics – Semester II
Fact Sheet and Syllabus for 2010-2011
Instructor: Ms. Jennifer Nero (jnero@ransomeverglades.org – 305.460.8871)
COURSE DESCRIPTION AND GOALS
This course is divided into two main sub-disciplines of economics: macroeconomics and
microeconomics. Its purpose is to develop your economic literacy and an understanding of the principles of
economics. During the first semester the focus is on macroeconomics, the study of the principles of
economics that offer a “birds-eye” view of the economy. This part of the course places emphasis on the
study of national income and price determination; the financial sector; economic performance measures;
stabilization policies; economic growth and international trade and finance. Some specific topics will
include the macroeconomic problems of unemployment and inflation, as well as the fiscal and monetary
problems that seek to address them. We will examine the banking system and the purpose of the Federal
Reserve, and seek to unravel the role of interest rates. We will take a look at the effects of a globalized
economy and how it impacts the international flows of capital. We will address these essential questions:
What causes exchange rates to fluctuate? What influences the flow and quantity of imports and exports?
Why do countries choose to specialize in the production of certain goods and services and then trade with
others? Finally, we will examine competing macroeconomic theories – tenets held by the classical school
and those held by the Keynesian school.
During the second semester the focus is on microeconomics, which takes an up-close view of the
individual decision-makers in the economy. Here are some of the essential questions we will seek to
answer. How do consumers make decisions? What role does utility, sensitivity to price changes (elasticity),
and income play in those decisions? How do producers make decisions about what to sell, how much to
sell, and how to set prices? How do producers evaluate costs in their decision making in order to maximize
profits? How do the various market structures – from highly competitive to monopolistic models – differ in
their decisions about price and output determination? How can firms use resources most efficiently to
minimize their costs and maximize their profits? Why do some workers earn higher wages than other?
What role does the government play in addressing market failures? When and how does the public make
choices about the production of “public goods.”? How do taxes create or hinder efficient economic
outcomes. And, how is income distributed in our economy?
In keeping with the school’s goal to “green” the campus, special attention will be given to the role of
externalities or spillovers costs. These typically take the form of environmental impact. And to reduce our
class’s carbon footprint, we will try to maximize use of online sources of news, blogs, and wikis.
The reading assignments for this class will provide the background knowledge for economic
understanding that is honed through class discussion. Special emphasis will be placed on the history of
economic theory, especially early on in the course.
Behold! This is not a finance or business class. Our focus will not include “get rich quick schemes” or
analyses of the stock market. As you will soon learn, economics is an academic discipline which combines
elements of mathematics, political science, and philosophy to create something all of its own.
EXPECTATIONS
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You are expected to adhere to the RE Honor Code as delineated in the Student Handbook. All
assignments and tests must be pledged. All aspects of your conduct in this course – taking exams
and quizzes, completing homework and projects, discussing exams and quizzes with other
classmates – should be guided by the Honor Code.
You are expected to complete all assignments on time, especially tests and quizzes. Repeated
absences on quiz and test days will be frowned upon and could result in significant grade
penalties. You must contact me ahead of time via email or telephone if you know you have to
miss a test or quiz.
You will be expected to be an active participant in class. Your assigned readings will include
material that will supplement readings from the texts and the wiki page to this class. Most of our
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class time will be spent processing the assigned readings as a group. You will be encouraged to
forge connections between the readings and to build on the ideas of your classmates, or even
refute them in some cases.
You are expected to keep yourselves informed about current economic issues through regular
reading of the business section of the newspaper and this class’s wiki space. This practice will
allow you to apply the principles to real world events.
You are expected to check daily my online class page and for course updates and homework
assignments.
All students are required to take the AP exams in both macroeconomics and microeconomics in
May.
Most importantly: You will be expected to – as an individual and as a class – decide how we will
use our knowledge, resources, and talents to save or enhance the lives of people suffering in
poverty. Some of our class members have already started projects toward this end. For example:
the club LEAP (Lending to End All Poverty) extends microloans to aspiring entrepreneurs in
developing nations.
ASSESSMENTS AND GRADING
Student grades are based on performance on tests and quizzes (about three each per quarter) and
semester projects. Other assignments may include problem sets, oral reports on journal articles, “Harkness
Discussions”, and game simulations – projects that serve to put theories into real world context. All tests
and assignments must be pledged according to the honor code.
Grading Scale
Tests = 60%*
Quizzes= 30%*
Discussion (in class and via wiki)= 10%*
* The instructor may raise or lower this value depending on nature of the quarter’s material.
Makeup Tests: All makeup tests and quizzes must be completed within the same number of days the
student was absent. Students are required to schedule make-ups before planned absences. Repeated
absences on test days may reflect poorly on your overall grade.
TEXTS
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Summer reading: The Life You Can Save
Economics: Principles, Problems & Policies 18th Ed., McConnell and Brue. McGraw- Hill/Irwin
Study Guide to text
New Ideas From Dead Economists Revised Edition, Buchholz
AP Econ Wiki Page
AP Macroeconomics – Semester I
Course Syllabus/ 2010-2011
Test and Quiz schedules are subject to change
MB denotes McConnell and Brue
Unit I: Basic Economic Concepts
Week 1 (Aug. 23 – 27)
Topics
A. Introduction to course
B. Review of summer reading: The Life You Can Save
C. Defining the study of economics – macro & micro
D. Scarcity, choice, & opportunity costs
E. Production Possibility Curve
F. Marginal Analysis
G. Graphs and their meaning
Lessons
1. Review of syllabus
2. Discussion on The Life You Can Save
3. MB, chapter 1 and appendix
Week 2 (Aug. 30- Sep. 3)
Topics
A. Characteristics of markets- private property, free
enterprise, specialization
B. Invisible Hand
C. Command vs. Free Market Economies
D. Circular Flow Model
Lessons
1. MB 1 & 2
2. Quiz
Week 3 (Sep. 7, 8, 10)
Topic – Supply and Demand
Labor Day & Rosh Hashanah
A.
B.
C.
D.
E.
Laws of Demand and Supply
Change in quantity demanded vs. change in demand
Market Equilibrium
Surpluses and shortages
Rationing function of prices
Lessons
1. MB 3
2. Graphing exercises in class on Activ Board
3. Test on Ch. 1-3, multiple choice and free response
Week 4 (Sep. 13 -17)
Topic – Private and Public Sectors
A. Households as spenders and receivers
B. Forms of Businesses
C. Role of government
D. Circular Flow with Government added
Lessons
1. MB 4
2. Lecture and discussion
Week 5 (Sep. 20-24)
Unit II -Open Economies and International Finance
A. Trade patterns
B. Comparative Advantage/Terms of trade
C. Protectionism vs. Free Trade – impacts on producers and
consumers
D. Foreign exchange market
E. Exchange rates/appreciation & depreciation
F. Calculating Capital and Current Accounts/Balance of
Payments
Lessons
1. MB 5, 36
2. Dead Economists, ch. IV
3. Test – Ch. 4- 6: Multiple choice, free response
Unit III: GDP, Growth, and Instability
Week 6 (Sep. 27- Oct. 1)
Topic – Introduction to Macroeconomics
A. Modern Economic Growth
B. Uncertaintly, Expectations, and Shocks
Lessons
1. MB 23
Topic – Measuring Domestic Output and National Income
A. Gross Domestic Product
B. Expenditures Approach
C. Income Approach
D. Other National Accounts
E. Nominal vs. Real GDP
F. Shortcomings of GDP
Lessons
1. MB 24
2. GDP Worksheets – Quiz?
3. Lecture and discussion
Week 7 (Oct. 4 – Oct. 8)
Oct. 8 = Last day of Q1
Topic – Economic Growth
A. Structures that promote growth
B. Ingredients of growth
C. Accounting for growth
Lessons
1. MB 25
2. Lecture and discussion
Topic – Business Cycles, Unemployment, and Inflation
D. Phase of the Business Cycle
E. Measurement, definition, types of unemployment
F.
Measurement, types, consequences of inflation.
Lessons
1. MB 26
2. Bureau of Labor Statistics site
3. Lecture and discussion
4. Quiz
Unit IV- Macroeconomics and Fiscal Policy
Week 8 (Oct. 11 – 15)
Topic- Basic Macroeconomic Relationships
Oct 11 – Faculty Work Day
Oct.13 - PSAT
A.
B.
C.
D.
Consumption and Saving Schedules
Average and Marginal Propensities
Interest Rate – Investment Relationship
Multiplier Effect
Lessons
1. MB 27
2. Wall Street Journal
3. Lecture and discussion
4. Dead Economists
Week 9 (Oct. 18-22)
Oct. 18 – Parent Conference Day
Topic – Aggregate Demand & Aggregate Supply
A. Explanation of slope of AD and AS
B. Determinants of AD and AS
C. Change of equilibrium output
D. Short run and long run AS
E. Sticky and flexible wages
Lessons
1. MB 29
2. In class graphing exercises on Activ Board
3. Quiz – drawing AD and AS graphs
4. Lecture and discussion
Week 10 (Oct. 25- 29)
Topic – Fiscal Policy, Deficits, and Debt
A. Expansionary and Contractionary Policies
B. Automatic Stabilizers – how graphs show their effects
C. Complications of fiscal policy – net export effects,
crowding out
D. The Public Debt – false and substantive concerns
Lessons
1. MB 30
2. Lecture and discussion
3. US Treasury site
4. Exam
Week 11 (Nov. 1- 5)
Unit V –Financial Sector
Topics - Money & Banking
A. Definition of M1, M2, & M3
B. The Federal Reserve –History and Function
C. Trends in Monetary Policy
Lessons
1. MB 31
2. Video on The FED
3. In-class examination of currency and checks
Topics – Money Creation
D. Fractional Reserve System
E. Transactions of Banks- accepting deposits, granting
loans, buying and selling securities, clearance of
checks
F. Multiple-deposit expansion – money multiplier
Lessons
1. Practice with balance sheets
2. MB 32
3. Quiz on money creation – balance sheet format
Week 12 (Nov. 8- 12)
Topics – Monetary Policy
Interest rates and bond prices – relationship
Demand for Money Graph
Real vs. Nominal rates
Tools of Monetary Policy – OMO, Reserve Ratio,
Discount Rate – How do these work?
E. Federal Funds Rate - targeting
F. Supply of Money – Graphs show how it will change
and impact interest rates
G. Cause and Effects of Monetary Policy
H. Evaluation of Monetary Policy
A.
B.
C.
D.
Lessons
1. MB 33
2. Exam – multiple-choice/free response
3. Lecture and discussion
Week 13 (Nov. 15 - 19)
Topic – Financial Economics
A. Financial Investment
B. Present Value of Money
C. Stocks, bonds, mutual funds
D. Risk
Lessons
1. MB 34
2. Lecture and discussion
Week 14 (Nov. 23- 24)
Nov. 24 - Day ends at 1:00
Topics –Extending the Analysis of Aggregate Supply
A. From Short Run to Long Run
B. Demand Pull and Cost Push Inflation
C. Inflation –Unemployment Relationship
D. Long run Phillips Curve
E. Supply side – Laffer Curve
Lessons
1. MB 35
2. Lecture and Discussion
Week 15 (Nov. 29- Dec. 3)
Topics – Disputes over Macro Theory
A. Causes of macro instability
B. Ability of economy to self-correct
C. Quantity Theory of Money PQ=MV
D. Discretionary vs. non-discretionary policies
E. Monetary Rule
Lessons
1. MB 36
2. Dead Economists – readings
3. Lecture and discussion
Unit VI – International Economics
Week 16 (Dec. 6 – 10)
Dec. 10=St. Alban’s Day
Topics- The Balance of Payments, Exchange Rates, and
Trade Deficits
A. International Financial Transactions
B. Balance of Payments
C. Flexible and Fixed Exchange Rates
Lessons
1. MB 38
2. Lectures and Discussion
Dec. 13
Review Day
Week 17 (Dec. 15- 17 )
Midterm exams