AP Macroeconomics
Macroeconomics Exam that is administered in May. Successful achievement on the AP Exam allows
the student to earn three hours of college credit.
AP Macroeconomics emphasizes economic principles as applied to the economy as a whole. This
includes analysis of national income and its components, economic indicators, inflation and
unemployment, money and banking, stabilization policies, and the United States and world trade.
Textbook
Campbell R. McConnell and Stanley L. Brue, Economics: Principles, Problems and Policies, 17th
edition, McGraw-Hill Irwin
Part I: Introduction to Economics
McConnell Brue Chapter 1 & 2
-Scarcity and Choice
-Rational Behavior
-Marginalism: Benefits and Costs
-Theoretical Economics
-ceteris paribus
-Economic Policy
-Economics Goals
-Pitfalls to Sound Reasoning
-Foundations: Wants vs. Needs
-Resources: Land, Labor, Capital, Entrepreneurial Ability
-Full Employment
-Full Production
-Production Possibilities Frontier
-Law of Increasing Opportunity Cost
-Allocative Efficiency
-Unemployment and Productive Inefficiency
-Economic Growth
-International Trade
-Economic Systems: Market, Command, Transitional
-Circular Flow Model
McConnell Brue Chapter 18
-Comparative and Absolute Advantage
-Trade Barriers and Free Trade
McConnell Brue Chapter 3
-Demand
-Law of Demand
-Demand Curve
-Market Demand
-Determinants of Demand
-Shift vs. Slide
-Price/Non-price factors
-Supply
-Law of Supply
-Supply Curve
-Determinants of Supply
-Shift vs. Slide
-Price/Non-price factors
-Equilibrium
-Surplus
-Shortage
-Market Clearing Price
-Rational Function of Prices
-Changes in Supply, Demand and Equilibrium
-Price Ceilings and Shortages
-Problems
Price Floors and Surpluses
-Problems
McConnell Brue Chapter 5
-Specialization and Comparative Advantage
-Foreign Exchange Market
-Government and Trade
-Protectionism vs. Free Trade
Part II: Macroeconomic Measurement and Basic
Concepts
McConnell Brue Chapter 6
-GDP
-Expenditure Approach
-Income Approach
-National Accounts
-Nominal GDP
-Real GDP
-Shortcomings
McConnell Brue Chapter 7
-Economic Growth
-Business Cycle
-Unemployment
-Inflation
-Redistribution
-Effects
Part III: National Income, Price Determination and Fiscal
Policy
McConnell Brue Chapter 8
-Income-Consumption and Income-Saving Relationship
-Real Interest Rate – Investment Relationship
-Multiplier Effect
McConnell Brue Chapter 9
-Equilibrium GDP
-International Trade
-Public Sector
-Full-Employment
McConnell Brue Chapter 10
-Aggregate Demand
-Aggregate Supply
-Equilibrium
McConnell Brue Chapter 15
-Short Run to Long Run
-Supply Shocks
-Supply-Side Policies
McConnell Brue Chapter 11
-Fiscal Policy and the AD/AS Model
-Stabilizers
-Full-Employment
-Time Lags
Part IV: Money, Banking and Monetary Policy
McConnell Brue Chapter 12
-Functions of Money
-Supply of Money
-M1, M2 and M3
- Value
-Demand for Money
-Money Market
-Federal Reserve
McConnell Brue Chapter 13
-Fractional Banking
-Money Multiplier
McConnell Brue Chapter 14
-Tools
-Open-Market Operations
-Reserve Ratio
-Discount Rate
-Monetary Policy, Real GDP and Price Level
-Actions
Part V: Long-Run Perspectives and Macroeconomic
Debates
McConnell Brue Chapter 11
-Budget Philosophies
-Public Debt
-Deficits and Surpluses
McConnell Brue Chapter 15
-Extended AD/AS Model
-Inflation/Unemployment Relationship
-Supply Shocks
-Phillips Curve
-Long-Run Phillips Curve
-Taxation and Aggregate Supply
-Disinflation
McConnell Brue Chapter 17
-Classicals
-Keynesians
-Instability
-Self-Correcting
VI. Economic Growth
McConnell Brue Chapter 16
-Factors
-PPF Analysis
-Economies of Scale
-Productivity
Part VII: International Trade
McConnell Brue Chapter 5
-Financing International Trade
-Balance of Payments
-Exchange Rates
-Flexible
-Fixed
-International Exchange Rate System
-Recent U.S. Trade Deficits