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A.P. ® MACROECONOMICS SYLLABUS Barbara Jordan High School Spring 2013 Teacher:

Angela DeScalzo (room 319) 281/352.9578 cell/text

Tutorial Hours:

Before school and/or during lunch/tutorials

COURSE DESCRIPTION AND GOALS Macroeconomics is the branch of economics that seeks to understand economy-wide phenomena such as unemployment, inflation, the business cycle, and economic growth, and the policies national governments can use to address these issues. Students will learn about core economic concepts, how to measure an economy’s economic performance, the forces that determine the level of a country’s production and prices, the financial sector, policies that promote economic growth and stability, and the impact of international trade and international finance on national economies. By the end of this class, students should be able to: 1) Analyze the factors that determine countries’ levels of economic growth, unemployment, and inflation and predict the effects of those factors; 2) Analyze, interpret, and create graphs to explain economic phenomena; 3) Apply monetary and fiscal policy to counteract economic problems; 4) Gain sufficient understanding, analytical skill, and problem solving ability to pass the A.P.® test for university credit; 5) Critically evaluate competing economic perspectives and make choices over economic policy as informed, competent, and responsible members of our democracy.

WHO SHOULD TAKE THIS COURSE? A.P. ® Macroeconomics is a one-semester, college-level course. Each student is expected to take the A.P. ® Macroeconomics Exam that is administered in May. Successful achievement on the A.P. ® Exam allows the student to earn three hours of college credit. Though all students are expected to take the A.P. ® Exam, the course is intended to meet the needs of a variety of students, from those intending to pursue college work in business or government and seeking a firm foundation in theory, to those planning to join the labor force directly out of high school and wanting to understand their role in the national economy. Calculus is not required for the course. Graphing skills, however, are imperative.


o • •

Main Textbooks (T): McConnell, Campbell R. and Stanley L. Brue. Economics: Principles, Problems, and Policies. 15th edition. New York: McGraw-Hill, 2002. ISBN: 0-07-234036-3 Supplementary Reader (R): This is a compilation of supplementary readings I have prepared for you. It includes primary sources, journal articles, magazine articles, and excerpts of books. Review Book. Dodge, Eric R. 5 Steps to a 5: AP Microeconomics/Macroeconomics 2010 2011. New York, NY: McGraw Hill, 2010.

REQUIRED MATERIALS        

2 inch three-ring binder with pockets 10 notebook dividers (or use of cardstock I can give you) 100 pages of loose-leaf notebook paper, college-ruled Pencils (with erasers) Pens (blue or black only) 50 Index cards Sticky Tabs Sticky Notes

These materials are recommended, but not required:  Zipper pencil pouch (with holes for binder)  Colored pencils and/or markers The deadline for getting your textbook and all required materials is Monday, January 14, 2013 Students must have ALL required materials in class each day.


Weekly Quizzes – Each Monday there will be a quiz on the previous week’s lessons. Quizzes will usually be composed of several multiple choice questions and, when appropriate, one Free Response Question (FRQ). Multiple choice questions are taken from the text publisher's test bank. All multiple choice questions contain 5 answer choices, phrased in the same style as the College Board A.P. ® examination. Students will have no more than one minute to answer each question. Unit Tests – On Mondays following the end of a unit there will be a test on the entire unit. Typically, it will be composed of multiple choice questions, one long FRQ and one short FRQ. The FRQs will be taken from older A.P. ® test samples or variations of those questions. The main themes of free-response questions will be: aggregate models, Keynesian versus Monetary policies, money markets, stability and the Phillips Curve, international trade of currencies, and comparative advantages. The solutions to the free response questions are scored with a grading rubric similar to the scoring of the A.P. ® exam. Daily grades – Daily grades will include reading quizzes, graphing problems, sample "freeresponse" questions, and workbook activities.

Keeping an organized binder is required for this class. This binder will count towards your daily grades.

ATTENDANCE, TARDIES, AND ASSIGNMENTS You are expected to attend and participate in each class meeting. Make-up work will not compensate for the experience and knowledge gained in class. Students who miss class frequently will have difficulty mastering the material and may not pass the class. If you are late more than 5 times you will have detention. In addition, state law says that any student who has more than TWO unexcused absences or FOUR total absences will NOT get credit for this class.

CURRENT EVENTS Students are expected to regularly read and analyze news reports of current events relating to the U.S. macroecomy. You will maintain a current events journal in which you will make a minimum of one journal entry per week. Each week I will call on 1-2 students to make brief presentations on the events they documented the prior week. Journals will be collected for grading without prior announcement at various times throughout the course. Therefore, you need to bring your journal to class every day. Your journal will be graded on how well you have analyzed the impact of various events on government and the economy and the forces shaping those events, as well as completeness of your journal coverage. Good sources of current economic news and debate:

• • • • • • • •

Wall Street Journal: The Economist New York Times (Op-Eds and Business Section in particular): The American Prospect Financial Times Paul Krugman Dollars and Sense (publisher of Real World Macro): National Public Radio


Be on time and prepared. Respect all individuals and their property. Do your best work. Follow all school rules.

The consequences for violating rules and policies can include, but are not limited to: • Warning • Teacher/student conference • Phone call to parent or guardian • Detention • Referral to Assistant Principal

COURSE PLAN Outline and Summary Unit 1 2 3

4 5 6

Topic Basic Economic Concepts Measuring Economic Performance Aggregate Demand and Aggregate Supply: National Income and Price Level Determination Financial Sector and Stabilization Policies Macroeconomic Policy in a Global Economy Review for A.P. ® Exam Personal Finance (post – A.P. ® Exam)

# of weeks 3 3 3.5

3 3.5 1 2

Timeline Weeks 1 - 3 Weeks 4 - 6 Weeks 7 - 9

Weeks 10 - 12 Weeks 13 - 16 Week 17 Weeks 18 - 19



Introduction to Macroeconomics Economic decision making Economic activities & circular flow model of income Demand and Supply Equilibrium price and quantity

• R, Goodwin, Ch. 1 • T, Ch. 1 Appendix • R, Econ Alive!, Ch. 2, “Economic Decision Making” • R, Goodwin, Section 3.1 • R, Bade, Section 2.2 • T, Ch. 3, pp. 40 – 49 • • T, Ch. 3, pp. 49 – 56 • R, Galbraith, “Freedom to Shop”


• Production Possibilities Frontier • Circular Flow Model

• Supply schedules and curves • Demand schedules and curves • Supply and Demand graph




National Income Accounting

• T, Ch. 7

Other National Accounts & Circular Flow Model Economic Growth and Business Cycles Unemployment

• T, Ch. 7

• Gross Domestic Product, Spending Approach • Gross Domestic Product, Income Approach • Rule of 70: approximate # of years required to double y = 70/annual percentage rate of growth in y • GDP = C + Ig + G + Xn • Price index number = (weighted cost of base-period items in current-year prices/weighted cost of baseperiod items in base-year prices) X 100 • Expanded circular flow model

• T, Ch. 8, pp. 136 - 140

• Business Cycles and the Secular Trend


• T, Ch. 8, pp. 146 -156

• T, Ch. 8, pp. 140 - 146 • Rate of inflation = (current-year price index – baseyear price index)/base-year price index X 100



2 Sector Aggregate Expenditure Model (2 block periods)

• T, Ch. 9

4 Sector Aggregate Expenditure Model AD-AS Model (2 block periods)

• T, Ch. 10

• T, Ch. 11 • R, Krugman, Ch. 28, pp. 750 – 758

KEY GRAPHS, DIAGRAMS, CHARTS, AND EQUATIONS • • • • • • • • • • • • • • • • •

Consumption Function Savings Function Consumption and Savings Functions Link Investment Demand Curve (domestic) Aggregate Expenditures Model S = DI – C APC = C/I APS = S/I MPC = change in C/change in I MPS = change in S/change in I MPC + MPS = 1 Income expenditure multiplier = 1/(1-MPC) = 1/MPS Real interest rate = nominal rate – rate of inflation Productivity = output/input Aggregate AD-AS Model (“Ranges”) Aggregate AD-AS Model (Updated) Aggregate AD-AS Model (Modern)



Macroeconomic schools

• R, Krugman, Ch. 33, pp. 885 - 897

Fiscal policy

• • • •

Money, the banking system, and the money supply Interest, the loanable funds market, and demand for money

• • • • •

Federal Reserve and Monetary Policy AD-AS Balance Model

• R, Krugman, Ch. 30, pp. 812 – 818 • R, Krugman, Ch. 31, pp. 837 - 848

Inflation-Unemployment Relationship

• T, Ch. 16, pp. 309 – 316

R, Bade, Ch. 31, pp. 784 – 794 T, Ch. 12, pp. 234 – 236 T, Ch. 16, pp. 317 – 320 R, Benjamin & Sider, “Obama’s Stimulus Plan Slow” R, Econ Alive!, Ch. 8, pp. 142 – 150 R, Krugman, Ch. 30, pp. 804 – 811 R, Krugman, Ch. 26, pp. 689 – 690 R, Krugman, Ch. 26, pp. 678 – 685 R, Krugman, Ch. 31, pp. 832 - 836


• Simple money multiplier: 1/RR • Loanable Funds/Private Savings Market Graph • Money Demand Curve • Money Market Graph • Aggregate Crowding Out Graph • Rate of return = (Revenue from project – Cost of project)/Cost of project x 100 • Real interest rate = nominal interest rate – inflation rate

• AD-AS Balance Model • Short-run Phillips Curve • Long-run Phillips Curve

UNIT 5: MACROECONOMIC POLICY COMBINATIONS IN A GLOBAL ECONOMY TOPIC Economic Growth and Development International Trade (2 block periods) International Finance (2 block periods) International Economics and Macroeconomic Policy

READINGS • • • • •

R, Goodwin, Ch. 14, pp. 361, 365 – 374 R, Krugman, pp. 641 – 647, 651 – 669 T, Ch. 6 T, Ch. 37 R, Galbraith, “No Such Thing as Free Trade” • T, Ch. 6, pp. 101 – 103 • R, Krugman, Ch. 22, p. 583 and Ch. 34 • T, Ch. 15, pp. 297 – 298 • R, Galbraith, “Impossible Dream of Budget Balance”


• Production possibilities table

• • • •

Domestic Currency Market Foreign Exchange Market Balance of Payments Account Balance of payments equation

UNIT 6: PERSONAL FINANCE (Post A.P. ® - Exam) These topics are part of the general economics curriculum of the state and are covered as time permits from the mid-May A.P. ® exam time to the time of finals. • Financial Goals, Saving, & Budgeting • Smart & Responsible Spending • Insurance and Taxes • Checking and Savings Accounts • Investing for Retirement • Credit Cards, Credit, & Debt • Home, Car, and College Loans

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AP Economics Syllabus - Spring  

Advanced Placement Macroeconomics

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