TOWNSEND HARRIS HIGH SCHOOL
Mr. Barbetta, Principal
Advanced Placement Macroeconomics
Instructor: Mrs. Jaime Byrne Baranoff
jbaranoff@schools.nyc.gov
Course Description
This course is an introduction to macroeconomics. This subdivision of economics deals with the economy as a
whole: aggregate national income and output, government spending and taxation, money and banking, monetary
policy, and international trade. Microeconomics focuses on individual economic entities. Macroeconomics
deals with the overall level of output, its rate of growth, and the level of prices in general.
Text
The textbook for this course will be Krugman’s Macroeconomics for AP by Margaret Ray and David Anderson
(adapted from Macroeconomics, Second Edition by Paul Krugman and Robin Wells).
Format of the Class
This is a college level course. As a result, it is imperative that the student completes all reading and written
assignments when assigned. Instruction will take the form of lecture and discussion, student-centered activities,
and projects. Students must keep up with the reading in order to participate effectively. The limited amount of
time in class means that students must take it upon themselves to complete all assignments. If a student is
experiencing difficulty with any concepts they may attend tutoring at regularly scheduled times to be
announced in class.
Absences
The student is responsible for notes and assignments missed because of absences (excused or unexcused,
extracurricular related or not). Students should acquire phone numbers and email addresses of other students in
class in order to stay current with all assignments. Work assigned before the absence is due the day they return.
If a test is missed, the student should discuss the possibility of a makeup exam or assignment with the
instructor.
Grading
There will be full period exams on a regular basis. Assessment may take the form of traditional objective tests,
writing assignments, graded homework assignments, quizzes, and projects. Grades will be calculated based on
the following formula:
70% Tests
20% Homework
10% Class Participation
Supplies
 Notebook
 Pens/pencils
 Calculator
 Dictionary
 Textbook (bring to class every day)
Topics Outline
I. Basic Economic Principles
a. Introduction to Economics
i. The Invisible Hand
ii. Scarcity and Choice
iii. Opportunity Cost and Trade-Offs
iv. Decision-Making at the Margin
v. Incentives
vi. How Economics Work: Interaction
vii. Equilibrium
viii. Efficiency
ix. Government Intervention
b. Economic Models: Trade-offs and Trade
i. Production Possibilities Frontier
ii. Factors of Production
iii. Comparative Advantage
iv. Transactions: The Circular Flow Diagram
v. Positive v. Normative Economics
II. Supply and Demand
a. How Markets Work
i. Competitive Markets
ii. The Demand Curve
iii. Shifts of the Demand Curve
iv. The Supply Curve
v. Shifts of the Supply Curve
vi. Equilibrium
b. Government Intervention in Markets
i. Price Ceilings
ii. Price Floors
iii. Black Markets
iv. Controlling Quantities
c. International Trade
i. Comparative Advantage
ii. Absolute Advantage
iii. Supply, Demand, and International Trade
iv. Effects of Imports
v. Effects of Exports
vi. International Trade and Wages
vii. Trade Protection
viii. Globalization
III. Introduction to Macroeconomics
a. The Nature of Macroeconomics
i. Macroeconomic Questions
ii. Keynesian Economics
iii. Monetary Policy
iv. Fiscal Policy
v. The Business Cycle
vi. Recession
vii. Long-Run Economic Growth
viii. Inflation
ix. Deflation
x. Trade Deficit
xi. Trade Surplus
b. Tracking the Macroeconomy
i. The National Accounts
ii. Circular Flow, Revisited
iii. Gross Domestic Product
iv. Real GDP
v. Price Indexes
c. Unemployment and Inflation
i. The Unemployment Rate
ii. Natural Rate of Unemployment
iii. Inflation
iv. Deflation
v. Disinflation
IV. Long-Run Economic Growth
a. Long-Run Growth
i. Comparing Economies
ii. Sources of Long-Run Growth
iii. Differing Rates of Growth
iv. Government and Economic Growth
v. World Growth
b. Savings, Investment Spending, and the Financial System
i. Matching Savings and Investment
ii. The Financial System
iii. Transaction costs
iv. Financial Risk
v. Liquidity
vi. Financial Intermediaries
vii. Financial Fluctuations
V. Short-Run Economic Fluctuations
a. Income and Expenditure
i. The Multiplier
ii. Marginal Propensity to Consume
iii. Marginal Propensity to Save
iv. Consumer Spending
v. Disposable Income
vi. Investment Spending
vii. Inventories
viii. The Income-Expenditure Model
b. Aggregate Demand and Aggregate Supply
i. Aggregate Demand
ii. Shifts of the Aggregate Demand Curve
iii. Government Policies and Aggregate Demand
iv. Short-Run Aggregate Supply
v. Shifts of the Short-Run Aggregate Supply Curve
vi. Long-Run Aggregate Supply
vii. Short-Run Macroeconomic Equilibrium
viii. Long-Run Macroeconomic Equilibrium
ix. Macroeconomic Policy
VI. Stabilization Policy
a. Fiscal Policy
i. Basic Fiscal Policy
ii. Fiscal Policy and the Multiplier
iii. The Budget Balance
iv. Long-Run Implications of Fiscal Policy
b. Money, Banking, and the Federal Reserve System
i. The Meaning of Money
ii. The Monetary Role of Banks
iii. Determining the Money Supply
iv. The Federal Reserve System
v. Discount Rate
vi. Open Market Operations
vii. Selected Financial Crises
c. Monetary Policy
i. Demand for Money
ii. Money and Interest Rates
iii. Monetary Policy and Aggregate Demand
iv. Inflation Targeting
v. Money, Output, and Prices in the Long Run
vi. Monetary Neutrality
d. Inflation, Disinflation, and Deflation
i. Money and Inflation
ii. Hyperinflation
iii. Moderate Inflation and Disinflation
iv. Short-Run Phillips Curve
v. Long-Run Phillips Curve
vi. Costs of Disinflation
VII.
VIII.
vii. Deflation
Events and Ideas
a. Classical Macroeconomics
i. Keynesian Economics
ii. Fighting Recession
iii. Monetarism
iv. Natural Rate of Unemployment
v. Political Business Cycle
vi. New Classical Macroeconomics
vii. Rational Expectations
viii. Real Business Cycle Theory
ix. Expansionary Monetary Policy
x. Expansionary Fiscal Policy
The Open Economy
a. Open-Economy Macroeconomics
i. Balance of Payments Accounts
ii. Capital Flows
iii. Exchange Rates
iv. Inflation and Exchange Rates
v. Purchasing Power Parity
vi. Exchange Rate Policy