The AP Macroeconomics courses provide you with a broad introduction to the field of macroeconomics, one of the social sciences. Ultimately, we want you to gain an understanding of aggregate economic activity and be able to critically determine whether economic progress can be made based on the economic decisions made by policy makers. You will frequently be asked to generate charts and graphs to describe economic concepts.
This course is designed to be taught in about 75 class periods of 45 minutes each. I have divided it into five essential units as outlined below.
We will use as our primary text Bade’s and Parkin’s
Foundations of Economics AP Edition (5th
Edition). However we will use an additional wide variety of material to assist you in your learning.
This course culminates in a College Board AP Examination that tests both broad factual knowledge and analytical skills. The examination is divided into two major sections: the
Multiple Choice section and the Free Response section.
In Macroeconomics we gain a thorough understanding of the principles of economics that apply to an economic system as a whole. We will study national income and price-level determination and also develop familiarity with economic performance measures, the financial sector, stabilization policies, economic growth and international economics.
You are expected to be on time to class, with their reading and written assignments completed and ready for use in class. Thoughtful involvement in discussion is key to the learning process as seen in verbal contributions and active listening. The essential units are:

Basic Economic Concepts, Including Measuring Economic Performance (18 class periods).


Aggregate Demand and Aggregate Supply: Fluctuations in Outputs and Prices (23 class periods)

Money, Monetary Policy and Economic Stability (14 class periods)

Monetary and Fiscal Policy Combinations: Stabilization Policy in the Real World (13 class periods)

International Economics (7 class periods) / 75 periods total
In these courses you will develop the following skills:

Demonstrate economic questioning and analysis skills with a special emphasis on marginal analysis.

Interpret and create a variety of graphical models and economic concepts.

Analyze the development of modern economic theory.

Use and interpret the language of business and basic measurements of economic performance.

Apply economic skills and concept knowledge to higher college-level economic courses.
We are a standards-based school, where your work is assessed for mastery. When you combine the relevance of our academic system with the rigor of AP, the result is a stringent college-level course where consistent excellence is expected. Summative Assessments will consist of the following. Formative Assessments, while not necessarily forming part of your grade, will be used to prepare you for the Summative Assessments, and will imitate them.
 Examinations are given at the end of each unit and include AP style multiple choice and essays.
 Free Response Questions , frequently involving are assigned frequently both as part of
 examinations and as stand-alone assessment tools. Responses will be assessed in terms of both core structure and content. You will be introduced to the AP Essay grading system, and learn to appreciate the vital importance of a well-crafted thesis. Paragraphs will be scored for evidence of both factual knowledge and analytical ability.
Projects and Activities will focus on increasing the students’, analysis, assessment and writing skills.

Primary Text
Bade, Robin and Parkin, Michael Foundations of Economics, AP Edition. 5th Ed. (Upper Saddle
River, New Jersey: Prentice Hall, 2010)
Secondary Texts
Ray, Margaret, Paul R. Krugman, and David A. Anderson. Krugman's Economics for AP. New
York: Worth Publishers, 2011. Print.
McConnell, Campbell R., Stanley L. Brue, and Sean Masaki Flynn. Economics: Principles,
Problems, and Policies . 19th ed. New York: McGraw-Hill/Irwin, 2012. Print.
Supporting Materials
Anderson, David A. Cracking the AP Economics Macro & Micro Exams . 2011 ed. New York:
Random House, 2010. Print.
Anderson, David A. Economics by Example . New York, NY: Worth Publishers, 2007. Print.
Anderson, David A.
Economics by Example Teacher’s Manual
. New York, NY: Worth
Publishers, 2007. Print.
Collegeboard. AP Macroeconomics Monetary Policy Curriculum Module. Collegeboard 2011.
Collegeboard. Professional Development AP Economics Workshop Handbook 2010-11.
Collegeboard, 2010.
Dodge, Eric R. AP Microeconomics/Macroeconomics, 2010-2011 . Dubuque, Iowa: McGraw-
Hill Contemporary Learning, 2011. Print.
Lopus, Jane S. Capstone: Exemplary Lessons for High School Economics . New York, N.Y.:
National Council on Economic Education, 2003. Print.
Lopus, Jane S. Capstone: Exemplary Lessons for High School Economics: Teacher's Guide .
New York, N.Y.: National Council on Economic Education, 2003. Print.
Lopus, Jane S., and Amy M. Willis. Economics in Action: 14 Greatest Hits for Teaching High
School Economics . New York, N.Y.: National Council on Economic Education and Junior
Achievement Japan, 2003. Print
Morton, John S., and Rae Jean B. Goodman. Advanced Placement Economics: Teacher
Resource Manual . 3rd ed. New York, N.Y.: National Council on Economic Education, 2003.
Print.
Morton, John S., and Rae Jean B. Goodman. Advanced Placement Economics: Microeconomics
Student Activities Workbook . 3rd ed. New York, N.Y.: National Council on Economic
Education, 2003. Print.
Solman, Paul. The Paul Solman Video Series. McGraw-Hill Publishing Company, 2006. Video.
Wheelan, Charles. Naked Economics: Undressing the Dismal Science . Fully rev. and updated.
New York: W. W. Norton, 2010. Print.

Unit One - Basic Economic Concepts, Including Measuring Economic Performance
Chapters 1, 3, 4, 20, 21, 22, 27 and 28 in Bade and Parkin, Foundations of Economics.
Unit 1 focuses on basic economic concepts, including demand, elasticity of demand, supply, scarcity, opportunity cost and marginal analysis. We will review as part of an in-class discussion the mechanics of the production possibilities curves as they exemplify the tradeoff between choices, the advantages of specialization and the concept of comparative advantage, which forms the basis for specialization and trade. We will examine how the market system is one method for determining consumer choice. Because a Microeconomics course precedes this
Macroeconomics course, this part of the unit will consist predominately of review.
In this unit we will also look at how economic performance is measured as affected by national income and price level determination. You will be expected to know aggregate expenditures and the impact of changes in taxes on gross domestic product. You should also be able to explain: (1) why there is unemployment at full employment; (2) the difference between a price level and inflation; (3) how price indexes are computed, and; (4) the difference between fluctuations in output and long-term economic growth.
In this unit, you will:
 review scarcity, opportunity cost, production possibilities cures and comparative advantage;
 explain the concept of demand and the factors that shift the demand schedule;
 explain the concept of supply and the factors that shift the supply schedule
 combine concepts of demand and supply to determine equilibrium price and quantity;
 demonstrate a variety of results given different elasticities of demand and supply curves;
 define macroeconomics and describe the main components of the economy and their interaction;
 measure key economic variables;
 examine the effects of inflation and how a price index is created;
 explain how unemployment, employment and labor-force participation are defined;
 use the business cycle and pull together all the concepts about economic growth, inflation and unemployment.
Unit Two - Aggregate Demand and Aggregate Supply: Fluctuations in Outputs and Prices
Chapters 28 and 29 in Bade and Parkin, Foundations of Economics.
Unit 2 forms the core of the study of macroeconomics. The unit begins by using the simple
Keynesian model as the transition from national income accounting to modeling the economy.
This model will provide you with a clear mechanism for learning about the consumption function and the multiplier process. However, we will then transition to the aggregate demand and aggregate supply model, where price level and output are determined. You must be able to use the models and the methods of analysis presented here. You will have to interpret it; you will have to use the model to analyze problems. Most importantly, you will have to present answers to questions by providing the graphical analysis of the aggregate demand and aggregate supply model. We will start with a short-term model, but then transition to a long-term model.
The unit concludes with analysis of fiscal policy.

In this unit, you will:
 develop a simple Keynesian model of the economy;
 examine investment;
 develop an understanding of aggregate demand;
 examine the basic determinants of short-run aggregate supply;
 bring aggregate demand and aggregate supply together and relate this model to the simple Keynesian model;
 investigate many aspects of the aggregate demand and aggregate supply model including the responses of the economy to outside shocks and to other changes
 relate the long-run aggregate supply curve and the economy’s production possibilities curve;
 initiate the study of stabilization policy by discussing fiscal policy.
Unit Three - Money, Monetary Policy and Economic Stability
Chapters 25, 26 and 27 in Bade and Parkin, Foundations of Economics.
This unit explores the role of money in the economy. Basic concepts that are covered include the definition of money, the functions of money in the economy and how the money supply is influenced by the central bank and the banking system. The unit discusses how the banking system influences the money supply through loans to businesses and consumers and how the fractional reserve system works. It also examines the role of the Federal Reserve System, the central bank of the United States. Many misconceptions surround money, and by the end of this section, you should have a better grasp of the role of money and the relationships among monetary policy, the banking system and the economy.
In this unit, you will:
 explain the properties of money, the functions of money and the definitions of money;
 describe the relationship between the money supply and gross domestic product;
 examine the financial sector, including financial institutions and their ability to create money through loans to businesses and consumers;
 explain the Federal Reserve System and its tools to control the money supply;
 discuss the money market and monetary policy
 recall real and nominal interest rates and examine the effects of monetary policy in the short run and in the long run.
Unit Four – Monetary and Fiscal Policy Combinations: Stabilization Policy in the Real
World
Chapters 24, 30 and 31 in Bade and Parkin, Foundations of Economics.
This unit brings the policy elements of Units 2 and 3 together, expands on related issues, introduces economic growth and provides the basis for policy discussions among economists.
We begin by reviewing monetary and fiscal policy tools and raise the issue of lags in policy

decision-making and implementation in the economy. This includes a discussion of crowdingout, a primary argument used by some economists to dismiss the positive effects of fiscal policy.
Next we examine the interactions between monetary and fiscal policy, looking at complementary and contradictory effects depending on policy implementation decisions.
Third, we will look at the short-run and long-run Phillips curve and the relationship to the aggregate demand and aggregate supply model.
Fourth, we look at economic growth, and how fiscal and monetary policy effect growth.
Finally we look at disagreements among economists about policy and sources for the disagreements.
In this unit, you will:
 explain the lags associated with policy making, as well as the crowding-out effect;
 examine the interaction of monetary and fiscal policies;
 discuss the short-run and long-run Phillips curve and relate the Phillips curve to the aggregate demand and aggregate supply model;
 examine the sources of economic growth and how monetary and fiscal policies contribute to long-term economic growth;
 explain the reasons why there are differences among economists and the policies they advocate.
Unit Five – International Economics
Chapter 33 in Bade and Parkin, Foundations of Economics.
In this unit we will introduce the international sector into the closed economy discussed in Units
1 through 4. We will review the concepts of comparative advantage and production possiblities.
We will analyze the effects of government intervention in international trade and examine the basic components of international finance, including balance of payments accounts and foreign exchange markets.
We will investigate two types of policies: trade policies and domestic stabilization policies, especially combined with the influence of domestic monetary and fiscal policies.
In this unit, you will:
 review comparative advantage and production possibilities curves from Unit 1 and expand the idea of specialization and trade;
 comprehend the basics of international finance in discussing the balance of payments and foreign exchange markets;
 analyze the application of trade barriers to an open market;
 explain the interaction of domestic stabilization policy and international trade and finance.

There are a variety of activities that we will conduct during class for each of the six units:
Individual Whiteboard Graphing Activities – Each student will be frequently asked to generate charts and graphs to describe economic concepts.
Sidewalk Chalk Graphing Review – As a review activity students will be periodically asked to work in pairs to draw graphs on sidewalks near the school using sidewalk chalk. They will then be asked to describe what they have drawn.
Class Discussion – Students will be frequently asked to interpret and analyze charts, graphs and data to describe economic concepts.
Class Quizzes – these quizzes are most often formative assessments designed to provide me with a gauge of your reading comprehension.
Multiple Choice Exams – these AP-style exams will be administered at the end of each unit and also as review prior to the actual AP Exam in May. The exams will frequently involve previously administered AP Macroeconomics free response questions. Students who take the exam will have an option to earn half credit by admitting they don’t know the answer to the question, and then answering it for homework, identifying both the correct answer, why it is correct, what theme(s) is/are involved, and what historical thinking skill(s) is/are involved.
Hotseats – When you are assigned reading I may ask you to create questions relating to the reading using “Levels of Questions.” When you appear in class we may use hotseats. One of you will be placed in the “hotseat” and another of you will ask questions. If the questioner doesn’t know whether the response is correct or not, then they are placed in the hotseat.
Connecting Terms (Web of Connections) – Periodically I will write important vocabulary on the board in a circle. Then I will ask students to make connections between the terms.
Note-taking - I will teach students Cornell Notes as a preferred way of taking notes during reading and during class.
Self-Assessment Questionnaires/Rubrics – We will use a variety of questionnaires and rubrics to help you engage in metacognitive thinking.
Watch Videos – There are excellent videos available that may be shown throughout the year.
Listen to Podcasts – occasionally I will ask you to listen to podcast lectures of other economists.
Lecture – traditional lecture is relatively rare, but still sometimes necessary. When I lecture, you can count on requests for student summarization of what I have said, and also opportunities to develop student pairs that work together to digest what is being discussed.

Land, Labor, Capital & Entrepreneruial Ability
Resource Market
Resource Money Payments
Households
Money Payments for goods and services
Product Market
Goods and S ervices
Real
GDP
Long-term Growth Rate
Peak—prosperity
Recovery—Expansion
Recession—
Contraction
Trough—Depression
Periods of Time

Equilibrium using Aggregate Demand and Supply … occurs at the intersection of the Aggregate
Demand and Aggregate Supply curve setting the equilibrium price level and output. Q f is the output at full employment.
Classical-Keynesian Model e v e l c e
L
P r i
P
Equilibrium m
AS
AD
Q Q f
Real GDP
L e v e l
P r i c e
Extended AD/AS Model
AS lr
Q f
AS sr
AD
Real GDP
potential output
PL c a d e
b
2
3
1
Real GDP
Rate of
I n f l a t
I o n
n
100
Tax
Rate m b e
LR Phillips curve d a c
SR Phillips curve
Unemployment rate m
Maximum revenue
0 l
Tax Revenue

Money Market Model: Always draw side-by-side graphs of Money Market and Investement demand. Interest rates are nominal. Money Supply is always vertical (perfectly inelastic).
Money supply r r
Money Market
Money demand
Investment demand
Investment Demand
i% i%
S
D
Q
Q of loanable funds
… The real Interest rate is determined here . The supply of loanable funds comes from the savings of people in banks. The demand comes from the demand for loanable funds – and can change with fiscal policy.

The demand for any currency is downsloping because as the currency becomes less expensive to obtain, people will be able to buy more of that nation’s
Goods & Services and therefore need more of that currency.
The supply is upsloping because as its price rises, holders obtain more of their currencies more cheaply and will want to buy more important goods and therefore give up more of their currency to obtain other currencies.
$ Price of
Foreign
Currency
S
The intersection will be the
exchange rate.
D
Quantity of Foreign Currency