AP Macroeconomics Fall Semester 2016 Ms. Huynh ( Win ), Room 126 Phone: (626) 441-5820 Ext 2126 Email: Thuynh@spusd.net Curricular Overview This semester long course will introduce students to the principles of economics that apply to an economic system as a whole. The course provides instruction in o basic economic concepts, such as marginal analysis and opportunity costs. [SC1] o measurement of economic performance, national income and price level determination. [SC2] o unemployment and inflation. [SC3] o the financial sector. [SC4] o stabilization policies. [SC5] o economic growth and productivity. [SC6] o open economy and international trade and finance. [SC7] The course promotes understanding of aggregate economic activity and the critical evaluation of determinants of economic progress and economic decisions made by policy makers. [SC8] The course teaches students how to o generate charts and graphs to describe economic concepts [SC9] o interpret and analyze charts, graphs and data to describe economic concepts. [SC10] Required Text Arnold, Roger A. Economics. 5th ed. Mason, OH: South-Western Cengage Learning, 2001. Students in this class will be expected to: be responsible and accountable think critically, creatively, solve problems, apply knowledge and set and reach goals work cooperatively, individually, develop disciplined work habits and do their best. THE AP EXAM Wed, May 10, 2017 @ noon. 1. Multiple Choice Questions (70 mins/66%) - 60 Questions - 1.25 minutes per question 2. Free Response Questions (60 mins/33%) - 3 Questions Student Evaluation A: 100-90% B: 89-80% C: 79%-70 D: 69-60% F: 59 and below Daily Assignments (CW & HW) 30% Projects 10% Unit Exams & Quizzes 40% Final Exam 20% ******Late work is not accepted. This course is a graduation requirement. If you do not pass this class, you will be required to retake it or the regular economics course in order to graduate. Grades are not rounded up. Grades will be posted on Aeries and updated weekly. Projects: The Economic Plans of Donald Trump and Hilary Clinton (100 pts) & Concept Review Poster (40 points)
Absences and Make-up Work: It is the student s responsibility to get missed work for the days he/she was absent from the homework website. Upon returning, homework from the last class meeting is due. If the student is absent on the day of a quiz or test, the student will be required to take the quiz/test on the day the student returns to class. That quiz/test may or may not be the same quiz/test given on the original exam day. Cheating Policy: Cheating, copying, allowing someone to copy your work, or plagiarism of any kind will not be tolerated. Plagiarism is the theft of ideas, writing, or words of another person and passing this information off as one s own. All students involved will receive a zero and parents will be notified. Personal Items: Keep all personal items including phones, make-up, etc, out of sight during class. Course Outline Unit Objectives Unit 1: Demand, Supply, and Price Determination A. Demand: Define and illustrate demand through schedules and graphs. 1. Distinguish between changes in quantity demanded and changes in demand. 2. Examine the inverse relationship existing between quantity demanded and price. Evaluate the law of demand. 3. Identify and explain the variables that cause a change in demand. 4. Illustrate graphically a change in demand versus a change in quantity demanded. [SC9] B. Supply: Define and illustrate supply through schedules and graphs. 1. Distinguish between changes in quantity supplied and changes in supply. 2. Examine the direct relationship existing between quantity supplied and price. Evaluate the law of supply. 3. Identify and explain the variables that cause a change in supply. 4. Illustrate graphically a change in supply versus a change in quantity supplied. C. Equilibrium Price and Quantity: Define and illustrate equilibrium through schedules and graphs. [SC9] 1. Define and illustrate surpluses and shortages. 2. Define the effects of surpluses and shortages on prices and quantities. 3. Interpret the effects of a price floor and price ceiling on equilibrium price and quantity. Textbook Chapter Ch. 1: What Economics Is About Ch. 3: Supply, Demand, and Price: The Theory Ch.4: Applications of Supply and Demand Unit 2: Measurement of Economic Performance Topic I: Unemployment [SC3] A. Unemployment: Defined B. Problems with the Unemployment Rate: Who is counted and who isn t? C. Types of Unemployment 1. Seasonal, Frictional, Structural, Cyclical 2. Natural Rate of Unemployment 3. Full Employment: What is it? What are the implications if achieved? Topic II: Inflation [SC3] A. The Meaning and Measurement of Inflation B. The Consumer Price Index (CPI) and How It Is Computed C. Problems with the CPI D. Other Indexes: Producer Price Index E. Consequences of Inflation: Shrinking Incomes, Changes in Wealth, Effect on Interest Rates F. Demand-Pull and Cost-Push Inflation Ch. 5: Macroeconomic Measurements, Part I: Prices and Unemployment
Topic III: Gross Domestic Product and National Income Concepts [SC2] A. Measuring GDP, Four-Sector Circular Flow Model 1. Expenditure approach [C + I + G + (X M)] where C = Personal Consumption Expenditures I = Gross Private Investment G = Government Consumption Expenditures and Gross Investment X M = Net Exports 2. Income approach (W + I + R + P) where W = Compensation of Employees I = Net Interest R = Rental Income of Persons P = Profits (Non-income adjustments) 3. Problems with calculating GDP: nonmarket transactions, kind and quality of products. 4. Changing Nominal GDP (NGDP) to real GDP (RGDP). How and why? 5. Other national accounts: net national product (NNP), national income (NI), personal income (PI), and disposable income (DI). Ch. 6: Macroeconomic Measurements, Part II: GDP and Real GDP Unit 3: Business Cycles and Fiscal Policy Unit 3A: Topics I-III Topic I: Business Cycles and Aggregate Demand and Supply A. The Roller Coaster: The four phases of the business cycle 1. Recessionary and Inflationary Gaps [SC9] B. Aggregate Demand Curve: Reasons for Its Shape 1. Real Balances Effect 2. Interest Rate Effect 3. Net Export Effect C. Determinants of Aggregate Demand D. Aggregate Supply Curve E. Determinants of Aggregate Supply F. Long-run/short-run macroeconomic equilibrium Topic II: The Classical Theory A. Saw s Law B. Flexible prices and wages and long-run equilibrium Ch. 7: Aggregate Demand and Aggregate Supply Ch. 8: The Self- Regulation Economy Topic III: The Phillips Curve 1. In the short run 2. In the long run 3. Relationship to the aggregate model Project: The Economic Plans of Donald Trump and Hilary Clinton Posters and Presentations DUE the day after the Unit 3A Test Unit 3B: Topics IV-V Topic IV: Keynesian Theory A. Inflexible prices and wages B. Changes in equilibrium price and quantity with the three ranges of the aggregate supply curve Ch. 9: Economic Instability
Topic V: Stabilization Policies Fiscal Policy [SC5] A. Automatic Stabilizers B. Discretionary Fiscal Policy C. Marginal Propensities to Consume and Save D. Spending, Tax and Transfer Payments Multipliers: The Math and Its Effects E. Supply-Side Policies F. Laffer Curve G. Government Expenditure 1. Types of Taxation: Progressive, Proportional, Regressive 2. Federal Deficits and the National Debt Ch. 10: Fiscal Policy Ch. 11: Taxes, Deficits, Surpluses, and the Public Debt Unit 4: Money and Monetary Policy [SC4] Topic I: Money, Banking, the Financial Sector A. Three Functions of Money B. The Three Money Supply Definitions 1. M1: most narrowly defined money supply 2. M2: adding near monies to M1 3. M3: adding large time deposits to M2 C. Financial Assets: Money, Stocks, Bonds D. Time Value of Money (present and future value) E. Banks and Creation of Money F. Money Demand G. Money Market H. Loanable Funds Market Topic II: Stabilization Policies - The Federal Reserve System (FED) A. Origins and Organizational Structure B. Powers of the FED a. Controlling the money supply b. Clearing checks c. Supervising and regulating the banks d. Loaning currency to banks e. Acting as the bank for the U.S. government C. Tools of the FED a. Open-market operations b. Discount rate c. Reserve requirement D. The Money Multiplier 1. Monetary Policy Shortcomings 2. Lags in policy effects E. Monetary Policy [SC5] 1. The demand for money and how it may affect interest rates 2. How monetary policy affects prices, output, and employment 3. The Monetarist view of money (MV = PY) 4. A comparison of views: Monetarist, Keynesian, and Classical Economists [SC8] Topic III: Expectations Theory A. Rational Expectations Theory Ch. 12: Money and Banking Ch. 14: Money and the Economy Ch. 13: The Federal Reserve System Ch.15: Monetary Policy Ch. 16: Expectations Theory and the Economy Unit 5: The International Economy Topic I: Production Possibilities Model [SC1] A. Scarcity: What is it? Why is it so important to economic thought? B. Opportunity Cost: Define and compute it. Why can it never be avoided? Ch. 2: Trade, Tradeoffs, and Economic Systems
C. Production Possibilities: Construct and interpret production possibilities, schedules, and graphs; relate production possibilities curves to the issues of scarcity, choice, and cost. Why are most PPCs bowed out? Topic I: International Trade and Finance [SC7] A. Why Nations Trade at All B. Comparative and Absolute Advantage C. Free Trade vs. Protectionism 1. Arguments for free trade 2. Arguments against free trade D. The Balance of Payments 1. Current account 2. Capital account 3. International debt of the United States E. Exchange Rates 1. Supply and demand for foreign exchange 2. Current fluctuations a. Appreciation and depreciation b. Graphing currency changes Ch. 33: International Trade Ch. 34: International Finance Unit 6: Economic Growth and Productivity Topic I: Comparative Economic Systems [SC8] A. Functions of Any Economic System 1. What to produce? How to produce? For whom to produce? B. Basic Types of Economic Systems 1. Traditional, command, and market economies: defined and analyzed 2. The mixed economy of today 3. Capitalism and socialism: basic tenets 4. Comparing the systems 5. Comparing Developed and Developing Countries Ch. 17: Economic Growth Ch. 35: International Economic Development Topic II: Raising Productivity: Real Output and Capital Formation [SC6] A. Human Capital Formation B. Physical Capital Accumulation C. Research and Development, Technological Progress D. Public Policy and Long-Run Economic Growth Project: Concept Review Posters DUE the day after the Unit 6 Test