Class Work

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Cedarburg Bulldog APEcon Course Syllabus

Teacher: Eric White Room: 210 Email: ewhite@cedarburg.k12.wi.us Phone: (262) 376-6305 (ext. 7254)

Course Documents and Assignments Available @Mr. White’s World:

https://sites.google.com/site/mrwhitesworld/ and find Mr. White’s World on Twitter.com too! New this semester, see last page on how to sign up for anonymous Remind.com AP Econ reminders!!!

Office Hours: Period 1 (in 2nd_{floor lounge), Period 5, before and after school—drop by anytime or make an}

appointment if you would prefer!

Required Texts:

 Ray, Margaret and David Anderson, Krugman’s Economics for AP adapted from Economics,

Second Edition by Paul Krugman and Robin Wells. New York: Worth Publishers/BFW, 2011.

 Ray, Margaret, Advanced Placement Economics: Macroeconomics Student Resource Manual (4th Edition, Council for Economic Education: 2012)

 Ray, Margaret, Advanced Placement Economics: Microeconomics Student Resource Manual (4th Edition, Council for Economic Education: 2012)

In this course, students will:

· learn and master principles of economic logic

· learn to express themselves with both written text answers and through a variety of graphical models in preparation for further economic study and for both the AP Microeconomics and Macroeconomics exams

· appreciate the general development of modern economic theory;

· connect economic concepts to readings in economics publications and newspapers · be prepared to continue their economics education at the college level

To that end, student proficiency will be assessed with the following Big Idea learning targets in mind:

AP Microeconomics Learning Targets

1.Demonstrate understanding of basic economic concepts through the application of economic models and analysis of economic systems

2.Use the supply and demand model to examine the effects of market choices on price and output. 3.Analyze how supply and demand interact in resource (or factor) markets.

4.Assess the impacts of government intervention on a competitive market.

AP Macroeconomics Learning Targets

5.Examine and calculate 3 key measurements of economic performance: GDP, unemployment, and inflation.

6.Assess the impacts of government policies on the business cycle using the aggregate supply and demand model.

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8.Evaluate the short and long run effects of economic shocks, fiscal policy and monetary policy on price level and output.

9.Discover the building blocks of long run economic growth.

10. Appraise the impacts of foreign trade on the trade balance and currency markets.

Be Good, Avoid

Consequences,

Be a BULLDOG!!!

MR. WHITE’S CLASSROOM

EXPECTATIONS

BE RESPONSIBLE

Attend class regularly and arrive promptly. If you miss class, it is up to you to inquire about missing work, quizzes, tests, and projects.

Complete all assignments and readings by the due dates or deadlines.

See me if you need extra help, I am one of your study aides!!!

BE RESPECTFUL

Be cool to everyone.

Clear the ears, free your fingers, and liberate your eyes from all personal

electronic devices while in 210 unless directed to do otherwise.

Trash your trash and recycle your recycling.

I will signal you when we are done for the day. Don’t zip, shuffle, scratch, crunch, break, squeak, sniff, or engage in any disrespectful behavior while we are still rocking the Micro and Macro mic!

BE READY

Be in your seat, ready to rock said mic before the bell rings.

Have all materials: writing utensils, paper, binder, books, and workbooks.

Oh yeah, and did I mention you should see me if you need extra help?

Class Work

Quarterly Grading: There are three weighted grading categories that comprise 100% of your AP Econ quarter grade: Major Assessments (70 %) and Minor Assessments (30%).

Minor Assessments (30%) These exercises help form your economic skills and knowledge and will account for 30% of your quarter grade and are, in essence, graded practice. These include daily assignments such as homework, in class activities, short quizlets, module quizzes, and the like. Problem sets and group white board work are further specific examples of formative minor assessments. Formative assessments are designed for periodic feedback on your mastery of concepts. Not all formative activities will necessarily receive a numerical grade.

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reviews, year-ending projects, and the like are more heavily weighted performance assessments that, rather than focus on forming your skills, measure your learning at the end of a major period of instruction. Major assessments account for 70% of your quarter grade.

Practice (0%) Skill & content based practice to prepare you for scored assessments

Semester Grades are calculated as follows: Qtr. 1 or 3 (40%) + Qtr. 2 or 4 (40%) + Final Summative Assessment (%20) = Semester Grade

Semester 1 and Semester 2 Comprehensive AP Microeconomics and AP Macroeconomics Exams: Students will end each semester with a “modified” AP Exam. A full AP Econ exam

consists of 60 multiple choice questions (66.67% of the test grade—70 minutes allotted) and 3 Free Response Questions (33.33% of the test grade--1 long (25 min.) and 2 short economic logic problems (12.5 min. each)—10 minutes reading time is given before the start of the FRQ section). These exams could count up to 20% of your semester grade.

Your portal for Advanced Placement Exams is online at www.totalregistration.net. Cost per exam is $91 (2015) so both AP Micro and AP Macro are $182 (2015). However, passing scores on both will earn from 6 to 8 credits at most colleges and universities. Please don’t let cost be an issue. See me with financial concerns.

Thursday, May 14

th

₂₀₁₅

11:30 am 2015—AP Macroeconomics

Friday, May 15

th

₂₀₁₅

7:30 am 2015—AP Microeconomics

Key to Success: Free Response Questions

AP Economics exams do not have essays, per se, they have Free Response Questions (FRQs) which are essentially economic problems for which you must provide an adequate response. College board will ask you to do the following on the FRQs, so heed the language they use when they pose problems:

• “Show” or “Draw” means to use a diagram to illustrate your answer. Correct labeling of all elements including the axes of the diagram is necessary to receive full

credit.

• “Explain” means to take the reader through all of the steps or linkages in the

line of economic reasoning. This is where you will have to write or show correctly abbreviated economic logic therefore graphs and symbols are acceptable as part of the explanation.

• “Identify” or “Indicate” means to provide a specific answer that might be a list or a label on a graph, without any explanation or elaboration

• “Calculate” means to use mathematical operations to determine a specific numerical response, along with providing your work

Economic Literacy and Understanding: Resources (including but absolutely not limited to):

· Krugman’s Economics for AP (and associated workbooks)

· Frontline Video Series (PBS) ($10 Trillion and Counting, Is Wal-Mart Good for America?, etc.)

· Economics by Example reader (Anderson)

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· Wall Street Journal, New York Times, Economist, etc. · www.reffonomics.com

· The Khan Academy

· www.bfwpub.com/highschool/Krugman_AP_Macro

· www.bfwpub.com/highschool/ Krugman_AP_Econ

· AP Central

· ACDCLeadership Economics videos on YouTube (Mr. Clifford’s vids, many students love these!)

Important Notice:

Notice the shaded areas to the left. You do not want your proficiency scores/grades to be basic or minimal on a regular basis. The reason you want to avoid these levels is because your likelihood of passing the AP Micro and AP Macro exams dips dramatically. In my years of AP teaching experience I have found that proficiency and advanced proficiency mean just that, you can pass the tests and earn college credit almost without fail! All of you will take the exams (I certainly hope), but take your willingness to work and assessment performance into account when doing so. Weigh those costs (study time and the registration fee) and benefits (approx. $2000-$3000 towards college tuition if both are passed, and/or potentially registering earlier than other First Year Students for the classes you want!!!).

Please also note, graded work that is not completed will be entered as missing and given a zero until the work is completed or the grading period deadline is reached.

Applicable School Board Policies

Electronic devices such as cell phones, pagers, radios, cassette players, CD players, i-Pods, and games are not permitted during the school day. Electronic devices are a distraction to the educational process. If these items are seen or are in use during the school day, they will be confiscated and disciplinary action will be taken. The school is not responsible for lost or stolen electronic devices and the administration will not investigate such occurrences.

• First offense = Cell phone is confiscated. Student may go to the attendance office at the end of the day to retrieve cell phone.

• Second offense = Cell phone is confiscated. Student may go to the attendance office at the end of the day to retrieve cell phone.

• Third offense = Cell phone is confiscated. Parent may go to the attendance office to retrieve cell phone. One hour detention assigned to student, disciplinary referral generated.

• Fourth offense = Cell phone is confiscated and will be held for 5 days. Parent may go to the attendance office to retrieve cell phone. One hour detention assigned to student.

• Fifth offense = Cell phone is confiscated and will be held for 30 days. Parent may go to the attendance office to retrieve cell phone. Two hour Saturday detention is assigned.

• Sixth offense = Cell phone is confiscated and will be held for the remainder of the year. Parent may go to the attendance office to retrieve cell phone. Two hour Saturday detention is assigned. Students refusing to

Grading Scale

Rubric Rubric

Cutoff CorrespondingLetter Grade

Advanced _97.99-93.0100-98.0 A+_A 92.99-90.0 A-Proficient 89.99-87.0_86.99-83.0 B+_B

82.99-80.0 B-Basic 79.99-77.0_76.99-73.0 C+_C

72.99-70.0 C-Minimal 69.99-67.0_66.99-63.0 D+_D

62.99-60.0 D-0 59.99 and

below

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The Cedarburg School District regards academic honesty as a cornerstone of its educational mission. It is expected that all school work submitted for the purpose of meeting course or class requirements represents the original efforts of the individual student. As stated in school board policy, students will not:

• plagiarize in written, creative or oral work. (Plagiarism is using the ideas of another as one's own without acknowledgment of the source.)

• submit work that is not original. Copying, "borrowing" from another source and giving it as one's own work, and resubmitting work from another person or another class are all unacceptable practices.

• give or receive unauthorized assistance on exams.

• alter grades or other academic records, give false information or forge.

• submit identical work in more than one course without the prior approval of the instructor. Students may further develop previous work with prior approval of the instructor.

• steal a copy of a test, grade book, or teacher’s manual.

Any offense of this nature may impact membership or current standing in National Honor Society. Actions to be taken:

• Classroom instructor communicates “academic honesty” violation to student and parent • Student may receive the score of “0” on the assessment

• Detention assigned

• Administrative conversation with parents (if necessary)

• Further consequences such as suspension, notification of police, or consideration for expulsion are possible if the offense is severe or repeated.

Our classes will adhere to the Cedarburg School Board’s handbook behavioral expectations and consequences for behavioral issues.

I look forward to working with you Bulldogs.

Thank you, in advance, for your efforts and, of

course, GO APE!

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Semester 1: AP Economics: Key Concepts and Running

Assignments

Unit 1: Basic Concepts (Unit 1 and Unit 2 account for 8-12% of AP Macro Test (not including M8 & M9), Unit 1 Counts 8-14% for AP Micro Test)

Key Terms

Economy Economics Market Economy Resource Land

Labor Capital Entrepreneurship Scarcity Opportunity Cost Microeconomics Macroeconomics Positive

Economics

Normative Economics

Economic Aggregates Business Cycle Depression Recession Expansion Employment Unemployment Labor Force Aggregate Output Aggregate Price

Level

Inflation

Deflation Price Stability Long-run Growth Economic Model Ceteris Paribus

Trade-off Production Possibilities Curve (PPC)

Efficient Factors of Production

Trade

Gains from Trade Specialization Comparative Advantage

Absolute Advantage

Reading Assignments:

Krugman’s Economics for AP Textbook Practice/Homework Problems: Macro Student Resource Manual Module 1 (M1): The Study of Economics,

pp. 1-8

M3: The Production Possibilities Curve Model, pp. 10-14

M4: Comparative Advantage and Trade, pp. 16-21

M2: Introduction to Macroeconomics, pp. 23-29

Need a graph refresher? Read pp. 34-44

Micro Activity 1.10

Activity 1.2 (PPC)

Activity 1.3 (Comparative Advantage)

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Unit 2: Supply and Demand

Key Terms

Supply and Demand Model

Competitive Market

Demand Schedule

Quantity Demanded

Demand Curve

Law of Demand Change in Demand

Movement along the demand curve

Substitute Complement

Normal Good Inferior Good Individual Demand Curve (vs. market demand curve)

Quantity Supplied Supply Schedule

Supply Curve Law of Supply Change in Supply Shift of the Supply Curve

Movement along the supply curve Input Individual Supply

Curve (vs. market supply curve)

Equilibrium Equilibrium Price (or market

clearing price)

Equilibrium Quantity

Surplus (Excess Supply)

Shortage Price Controls Price Ceiling Price Floor

Quantity Control (or Quota)

License Demand Price Supply Price Wedge

Quota Rent Deadweight Loss (or the B.A.D. Triangle)

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M5: Supply and Demand: Introduction and Demand, pp. 47-57 (Key to Success: Table 5.1)

M6: Supply and Demand: Supply and Equilibrium, pp. pp.59-69 (Key to Success: Table 6.1)

M7: Supply and Demand: Changes in Equilibrium, pp. 71-75

M8: Supply and Demand: Price Controls (Ceilings and Floors), pp. 77-85

M9: Supply and Demand: Quantity Controls, pp. 88-93

Activities 1.4 and 1.5 (Demand)

Activities 1.6 and 1.7 (Supply)

Activities 1.8 and 1.9 (Price and Equilibrium)

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Unit 3: AP Microeconomics: Behind the Demand Curve

(Units 2 and 3 account for 20-30% AP Micro Content)

Key Terms

Substitution Effect Income Effect Price Elasticity of Demand

Midpoint Method Perfectly Inelastic Demand

Perfectly Elastic Demand

Elastic Demand Inelastic Demand Unit-Elastic Demand Total Revenue

Cross-Price Elasticity of Demand

Income Elasticity of Demand

Income-Elastic Demand

Income-Inelastic Demand

Price Elasticity of Supply

Perfectly Inelastic Supply

Perfectly Elastic Supply

Willingness to Pay Individual Consumer Surplus

Total Consumer Surplus

Consumer Surplus Individual Producer Surplus

Total Producer Surplus

Producer Surplus Total Surplus

Excise Tax Tax Incidence Deadweight Loss

(remember the baaaad triangle?)

Utility Util

Marginal Utility Principle of

Diminishing Marginal Utility

Budget Constraint Consumption Possibilities

Budget Line

Optimal

Consumption Bundle

Marginal Utility per Dollar

Optimal

Consumption Rule

Krugman’s Economics for AP Textbook Practice/Homework Problems: Micro Student Resource Manual M46: Income Effects, Substitution Effects,

and Elasticity, pp. 457-464

M47: Interpreting Price Elasticity of Demand, pp. 466-473

M48: Other Elasticities, pp. 475-480 (Key to Success: Table 48.1)

M49: Consumer and Producer Surplus, pp. 482-492

M50: Efficiency and Deadweight Loss, pp. 495-508

M51: Utility Maximization, pp. 511-521

Activity 2.3 (Elasticities) and Activity 2.4 (Elasticity Determinants)

Activity 2.5 (Total Revenue Test)

Activities 1.4 & 1.5 (Surplus) Activity 2.6 (Excise Taxes) Activity 2.9 (Deadweight Loss)

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Unit 4: AP Microeconomics: Behind the Supply Curve: Profit, Production, and Costs (10-15%) Key Terms

Explicit Cost Implicit Cost Accounting Profit Economic Profit Implicit Cost of

Capital

Normal Profit Marginal Revenue (MR)

Optimal Output Rule Marginal Cost Curve Marginal Revenue Curve

Cross-Price Elasticity of Demand

Production Function Fixed Input Variable Input The Long Run

The Short Run The Total Product Curve

Marginal Product (MP)

Diminishing Returns to an Input

Fixed Cost (FC)

Variable Cost (VC) Total Cost (TC) Total Cost Curve Average Total Cost (ATC)

Average Total Cost Curve

Average Fixed Cost (AFC) Average Variable Cost (AVC) Minimum Cost Output Long-Run Average Total Cost Curve (LRATC)

Increasing Returns to Scale

Economies of Scale Decreasing Returns to Scale

Diseconomies of Scale

Constant Returns to Scale Sunk Cost Price-Taking Producer Price-Taking Consumer Perfectly Competitive Market Perfectly Competitive Industry Market Share Standardized Product

Commodity Free Entry and Exit Monopoly/Monopolist Barrier to Entry

Natural Monopoly Patent Copyright Oligopoly/Oligopolist Imperfect

Competition

Monopolistic Competition

Krugman’s Economics for AP Textbook Practice/Homework Problems: Micro Student Resource Manual M52: Defining Profit, pp. 529-534

M53: Profit Maximization, pp. 536-539 M54: The Production Function, pp.

542-545

M55: Firm Costs, pp. 548-557

M56: Long-Run Costs and Economies of Scale, pp. 559-564

M57: Introduction to Market Structure, pp. 567-575

Activity 3.5 (Revenue and Profit) Activity 3.6 (Profit Maximization) Activity 3.2 (MP and MC)

Activity 3.3 (Costs) Activity 3.4 (LRATC)

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Unit 5: AP Microeconomics: Market Structures: Perfect Competition and Monopoly

(Units 5 and 6 combined account for 25-35%)

Key Terms

Break-even Price Shut-down Price Short-run

Individual Supply Curve

Industry Supply Curve

Short-run industry Supply Curve

Short-run Market Equilibrium

Long-run Market Equilibrium

Long-run Industry Supply Curve

Price Regulation Single-Price Monopolist Price

Discrimination

Perfect Price Discrimination

Price-taking Firm’s Optimal Output Rule

Krugman’s Economics for AP Textbook Practice/Homework Problems: Micro Student Resource Manual M58: Introduction to Perfect Competition,

pp. 583-588

M59: Graphing Perfect Competition, pp. 590-596 (Key to Success: Table 59.1) M60: Long-Run Outcomes in Perfect

Competition, pp. 599-605

M61: Introduction to Monopoly, pp. 608-615

M62: Monopoly and Public Policy, pp. 617-621

M63: Price Discrimination, pp. 624-629

Activity 3.7 (PC and SR Equilibrium)

Activity 3.9 (Graphing PC)

Activity 3.8 (PC and the Long Run)

Activities 3.10, 3.11, 3.12, 3.15 (Monopoly vs. PC)

Activity 3.14 (Regulating Monopolies)

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Unit 6: AP Microeconomics: Market Structures: Imperfect Competition Key Terms

Interdependent Duopoly Collusion Cartel Noncooperative

Behavior

Game Theory Payoff Payoff Matrix Prisoners’ Dilemma Dominant Strategy

Nash Equilibrium Noncooperative Equilibrium

Strategic Behavior Tit for Tat Tacit Collusion

Antitrust Policy Price War Product Differentiation

Price Leadership Nonprice Competition

Zero-profit Equilibrium

Excess Capacity Brand Name

Krugman’s Economics for AP Textbook Practice/Homework ProblemsMicro Student Resource Manual :

M64: Introduction to Oligopoly, pp. 637-642 M65: Game Theory, pp. 644-649

M66: Oligopoly in Practice, pp. 652-656

M67: Introduction to Monopolistic Competition, pp. 659-665

M68: Product Differentiation and Advertising, pp. 668-672

Activity 3.17 (Oligopoly and Game Theory)

Activity 3.16 (Monopolistic Competition)

Unit 7: AP Microeconomics: Factor Markets (10-18%) Key Terms

Physical Capital Human Capital Derived Demand Value of the Marginal Product (VMP) & MRP

Value of the Marginal Product Curve

Rental Rate Individual Labor Supply Curve

Marginal Factor Cost (MFC)

Monopsonist Monopsony

Nash Equilibrium The Cost Minimizing Rule

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M69: Introduction and Factor Demand, pp. 679-688 M70: The Markets for Land and Capital, pp. 690-693

M71: The Market for Labor, pp. 695-704

M72: The Cost-Minimizing Input Combination, pp. 706-709 M73: Theories of Income Distribution (if time permits)

Activity 2.1 (Derived Demand)

Activity 4.1 (Hiring Workers)

Activities 4.4 &4.5 (PC Labor Markets) Activities 4.3 & 4.6 (Monopsony)

Activity 4.2 (Optimal Inputs)

Unit 8: AP Microeconomics: Market Failure and the Role of Government (12-18%) Key Terms

Marginal Social Cost of Pollution (MSC) Marginal Social Benefit of Pollution (MSB) Socially Optimal Quantity of Pollution

External Cost External Benefit

Externalities Negative Externalities

Positive Externalities

Coase Theorem Transaction Costs

Internalize the Externality

Environmental Standards

Emissions Taxes Pigouvian Taxes Tradable Emissions Permist Marginal Social

Benefit of a Good or an Activity

Pigouvian Subsidy

Technology Spillover

Marginal Social Cost of a Good or an Activity

Excludable

Rival in Consumption

Private Good Nonexcludable Nonrival in Consumption

Free-rider Problem Public Good Common

Resource

Overuse Artificially Scarce Good

Marginal Cost Pricing

Average Cost Pricing

Poverty Rate Poverty Threshold Mean Household Income Median Household Income Gini Coefficient Progressive Tax Regressive Tax Proportional

(Flat) Tax

Lorenz Curve

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M74: Introduction to Externalities, pp. 723-729

M75: Externalities and Public Policy, pp. 731-740

M76: Public Goods, pp. 743-752 M77: Public Policy to Promote

Competition, pp. 754-758

M78: Income Inequality and Income Distribution, pp. 761-772

Activities 2.8 & 5.2 (Externalities)

Activities 5.3 (Coase Theorem) and 5.4 (Optimal Pollution Levels)

Activity 5.1 (Types of Goods) Activity 5.5 (Types of Taxes)

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SEMESTER 2

Unit 9: AP Macroeconomics-Measurement of Economic Performance

(12-16%)

UNITS 1 AND 2 ARE INCLUDED IN AP MACRO STUDY AS WELL Key Terms

National Income and Product Accounts (NIPAs)

Household Firm Product Markets Factor Markets

Consumer Spending Stock Bond Government

Transfers

Disposable Income

Private Savings Financial Markets Government Borrowing

Government Spending

(purchases of goods and services)

Exports

Imports Inventories Investment Spending Final Goods and

Services

Intermediate Goods and Services

Gross Domestic Product (GDP)

Net Exports Aggregate Output Real GDP Nominal GDP

GDP per capita Employed Unemployed Labor Force Labor Force

Participation Rate

Unemployment Rate Discouraged Workers

Underemployment Frictional Employment

Structural Employment

Cyclical Unemployment

Natural Rate of Unemployment

Real Wage Real Income Inflation Rate

Nominal Interest Rate

Real Interest Rate Disinflation Aggregate Price Level

Market Basket

Price Index Consumer Price

Index (CPI)

Producer Price Index (PPI)

GDP Deflator

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M10: The Circular Flow and Gross Domestic Product, pp. 101-110

M11: Interpreting Real Gross Domestic Product, pp. 112-116

M12: The Meaning and Calculation of Unemployment, pp. 118-124

M13: The Causes and Categories of Unemployment, pp. 126-132

M14: Inflation: an Overview, pp. 134-139 M15: The Measurement and Calculation of

Inflation, pp. 142-147

Activities 2.1 and 2.2 (Circular Flow/GDP)

Activity 2.6 (Unemployment)

Activities 2.3, 2.4, 2.5 (Inflation)

Unit 10: AP Macroeconomics-National Income and Price Determination

(10-15%)

Key Terms Marginal Propensity to Consume (MPC) Marginal

Propensity to Save (MPS) Autonomous Consumer Spending Autonomous Change in Aggregate Spending Multiplier

Inventories Aggregate Demand Curve

Wealth Effect of a Change in the Aggregate Price Level

Interest Rate Effect of a Change in the Aggregate Price Level

Aggregate Supply Curve

Nominal Wage Sticky Wages Short-run Aggregate Supply Curve (SRAS) Long-run Aggregate Supply Curve (LRAS) Potential Output

AD-AS Model Short-run Macroeconomic Equilibrium Short-run Aggregate Price Level Short-run Equilibrium Aggregate Output Demand Shock

Supply Shock Stagflation Long-run Macroeconomic Equilibrium

Recessionary Gap Inflationary Gap

Output Gap Self-Correcting Stabilization Policy Social Insurance Expansionary Fiscal Policy

Contractionary Fiscal Policy

Lump-sum Taxes Automatic Stabilizers

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Krugman’s Economics for AP Textbook Practice/Homework Problems: Macro Student Resource Manual M16: Income and Expenditure, pp.

158-161, 165-70

M17: Aggregate Demand: Introduction and Determinants (Shifters), pp. 172-177 (Key to Success: Table 17.1)

M18: Aggregate Supply: Introduction and Determinants, pp. 179-188 (Key to Success: Table 18.1)

M19: Equilibrium in the AD-AS Model, pp. 190-197

M20: Economic Policy and the AD-AS Model, pp. 199-207

M21: Fiscal Policy and the Multiplier, pp. 209-213

Activity 3.1 (AD)

Activity 3.3 (SRAS) and Activities 3.8 and 3.9 (LRAS)

Activity 3.4 (Wages and Prices) and Activity 3.7 (Types of Inflation)

Activities 3.5 and 3.6 (Equilibrium and Shifts)

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Unit 11: AP Macroeconomics-The Financial Sector (15-20%)

Key Terms

Interest Rate Budget Surplus Budget Deficit Budget Balance National Savings

Savings-Investment Spending Identity (I=S)

Capital Inflow Wealth Financial Asset Physical Asset

Liability Transaction Costs Financial Risk Diversification Liquid

Illiquid Loan Default Loan-Backed

Securities

Financial Intermediary

Mutual Fund Pension Fund Life Insurance

Company

Bank Deposit Bank

Money Currency in

Circulation

Checkable Bank Deposits

Money Supply Medium of Exchange

Store of Value Unit of Account Commodity Money Commodity-backed

Money

Fiat Money

Monetary Aggregate Near-moneys Present Value Bank Reserves T-Account

Reserve Ratio Required Reserve Ratio

Bank Run Deposit Insurance

(e.g. FDIC)

Reserve Requirements

Discount Window Excess Reserves Monetary Base Money Multiplier Central Bank

Commercial Bank Investment Bank Subprime Lending Federal Funds

Market

Federal Funds Rate

Discount Rate Open Market

Operation

Short-Term Interest Rates

Long-Term Interest Rates

Money Demand Curve

Fisher Effect Money Supply Curve Loanable Funds Market

Rate of Return Crowding Out

Liquidity Preference Model (of the Interest Rate) (i.e. Money Market Model)

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M22: Saving, Investment, and the Financial System, pp. 221-229

M23: The Definition and Measurement of Money, pp. 231-235

M24: The Time Value of Money, pp. 237-241 M25: Banking and Money Creation, pp. 243-251 M26: The Federal Reserve System: History and

Structure, pp. 253-260

M27: The Federal Reserve System: Monetary Policy, pp. 262-266

M28: The Money Market, pp. 268-275

M29: The Market for Loanable Funds, pp. 277-286

Activity 4.1 (Money)

Activity 4.2 (Time Value of Money) Activity 4.3 (Money Creation and Banks) Activity 4.6 (Federal Reserve)

Activity 4.7 (Monetary Policy)

Activity 4.4 (Money Market)

Activities 4.5, 5.7 (Loanable Funds) &4.9 (r and i)

Unit 12: AP Macroeconomics-Inflation, Unemployment, and Stabilization Policies (20-30%)

Key Terms

Cyclically

Adjusted Budget Balance

Fiscal Year Public Debt Debt-GDP Ratio Target Federal Funds Rate Expansionary Monetary Policy Contractionary Monetary Policy Monetary Neutrality Classical Model of the Price Level Inflation Tax Cost-Push Inflation Demand-Pull Inflation Short-Run Phillips Curve (SRPC) Nonaccelerating Inflation Rate of Unemployment (NAIRU) Long-run Phillips Curve Monetarism Discretionary Monetary Policy Monetary Policy Rule Quantity Theory of Money

Velocity of Money

New Classical Macroeconomics Rational Expectations New Keynesian Economics Reading Assignments:

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M30: Long-run Implications of Fiscal Policy: Deficits and the Public Debt, pp. 295-305

M31: Monetary Policy and the Interest Rate, pp. 307-313

M32: Money, Output, and Prices in the Long Run, pp. 315-319

M33: Types of Inflation, Disinflation, and Deflation, pp. 321-329

M34: Inflation and Unemployment: The Phillips Curve, pp. 331-341

M35: History and Alternative Views of Macroeconomics, pp. 343-353

M36: The Modern Macroeconomic Consensus, pp. 355-359

Activity 5.1 (Fiscal Policy and Budgets) and 5.2 (Discretionary and Automatic)

Activity 5.3 (Monetary and Fiscal)

Activity 5.4 (Policy and SRAS)

Activities 5.8 (SRPC) and 5.9 (LRPC)

Activity 4.8 (MV=PQ)

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Unit 13: AP Macroeconomics-Economic Growth and Productivity (5-10%)

Key Terms

Rule of 70 Labor Productivity, or Productivity

Physical Capital Human Capital Technology

Diminishing Returns to Physical Capital

Research and Development (R&D)

Infrastructure Sustainable Depreciation

Krugman’s Economics for AP Textbook Practice/Homework Problems: Macro Student Resource Manual M37: Long-Run Economic Growth, pp.

367-373

M38: Productivity and Growth, pp. 376-385

M39: Growth Policy: Why Economic Growth Rates Differ, pp. 387-395

M40: Economic Growth in Macroeconomic Models, pp. 398-403

Activity 6.1 (Growth)

Activity 6.2 (Productivity)

Activity 6.3 (LRAS Shifters)

Unit 14: AP Macroeconomics-The Open Economy: International Trade and

Finance (10-15%)

Key Terms

Balance of Payments Accounts

Current Account Financial (or capital) Account

Balance of

Payments on Goods and Services

Trade Balance

Foreign Exchange Market

Exchange Rates Appreciates Depreciates Equilibrium Exchange

Rate

Real Exchange Rate Purchasing Power Parity

Krugman’s Economics for AP Textbook Practice/Homework Problems: Macro Student Resource Manual M41: Capital Flows and the Balance of

Payments, pp. 409-419

M42: The Foreign Exchange Market, pp. 421-429

M43: Exchange Rate Policy, Read Only pp. 434 “China Pegs the Yuan”

M44: Exchange Rates and Macroeconomic Policy, pp. 437-441

M45: Putting it all Together, pp. 443-450 (Keys to Success: All Tables and Figures)

Activity 7.1 (Balance of Payments)

Activity 7.3 (Forex)

Activity 7.4 (Policy and Forex) & Activity 7.2 (Trade Barriers)

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