AP Macroeconomics2017-18 Chicago Public School Year

Teacher: Mr. Carity 773-534-5400 (Mailboxx 23498)

(Office Hours:M-F 6:30 – 7am & 5th Period)

Class Website:

Periods: 2,4,6,7 (Rm. 234)

Course Description

Course Objective: This is an intensive introductory course on the principles of macroeconomics. The purpose of an AP course in Macroeconomics is to give students a thorough understanding of the principles of economics that apply to an economic system as a whole. Thus, when studying macroeconomics we will look at the aggregate (whole) economy. When studying macroeconomics students will learn economic theory and be able to explain economic concepts. Students will apply this knowledge to evaluating and understanding decisions of policymakers as it applies to economic growth and stability. Finally, when studying macroeconomics students will learn how to generate, label, and analyze graphs and charts.

General Overview: Topics covered in macroeconomics include the nature of economics (basic economic concepts, and supply and demand); the data of macroeconomics (measuring economic performance: GDP, national income accounting, employment, and inflation); aggregate demand and aggregate supply, and fiscal policy (aggregate expenditures, fluctuation in output and prices, economic growth, and productivity); monetary policy (money, banking, and the federal reserve, and the influence of monetary policy on economic stability and the financial sector); government and the economy (inflation and unemployment, and the influence of fiscal policy and monetary policy on economic stability); and the global economy (international trade, exchange rates, and balance of payments).

Grading Policies/Class Requirements

  • EXAMS:Exams will be given at the end of each unit. Students will know about the exams in advance and tested material will include information from the textbook, lectures, class activities/discussions, videos, and supplementary readings. There will be an in-class test review before each exam. If you miss an exam, you have as many days to make up an exam as you have been excused for your absence. If you fail to make up an exam during this time, you will receive a zero. Because many of my tests use scantron answer sheets, always bring a #2 pencil on test day. Failure to bring a #2 pencil means that you lose the opportunity to answer the extra credit questions on the test.
  • QUIZZES: Each week, there will be a 10-question quiz in class (usually on Friday). The quiz will cover material studied during the preceding week. For every five quizzes taken, students can drop one quiz score. So if we have 10 quizzes in a 10-week grading period, each student can drop his/her lowest two scores. Quizzes cannot be made up.
  • HOMEWORK: Homework is due at the beginning of the period. Missed homework can be made up only if an absence has been excused. You have as many days to make up the missed work as you have been excused for your absence. I will not pursue you about missed assignments; check with me and/or fellow classmates to find out what you have missed. Any other late homework will not be accepted. All students must sign up for Albert.io account by 9/8 – details on class website
  • OUTLINING: I strongly encourage each of you to outline/take notes on the chapters assigned each week. This is an invaluable skill that will help you study for tests/quizzes in my class and also will be very helpful at your next level of education.
  • PARTICIPATION:Class participation by everyone is strongly encouraged and will count as part of a student’s grade (see specifics below). Respect of fellow students and their views will create an energetic learning environment. Actions that disrupt the class, detract from the lesson, or embarrass other students will not be tolerated.
  • WRITING:In addition to content, grammar will be considered as I grade any written assignment.
  • GRADES:Students should keep track of their grades throughout the term. I will update grades online periodically (about once a week). If a student notices a discrepancy between his/her log sheet and the posted grade, notify me ASAP.

Materials needed for this course

1)Required Textbook: Colander, C. David, Economics, Seventh Edition, Boston, MA: McGraw-Hill, 2010

Activity Books: Stone, Gary L, and Margaret A. Ray. Advanced PlacementEconomics, Macroeconomics: Student Resource Manual, 4th Edition, New York, NY: National Council on Economic Education, 2012. Anderson, A. David, and Chasey, James, Favorite Ways to Learn Economics, Australia: South-Western/Thomson Learning, 2008.

Practice Test Booklet: Chasey, James. Economics Multiple-Choice & Free-Response Questions In Preparation For The AP Economics Examination, Second Edition. Brooklyn, NY: D & S Marketing Systems, Inc., 2001. Cracking the AP Economics Macro & Micro Exams, Framingham,MA: The Princeton Review, 2013.

2)Spiral bound notebook specifically for Economics (for class notes & quick-write activities).

3)A folder for handouts and problem sets.

Rules

  • Be on time. Please be in your seat and ready to work when the bell rings. You will receive one free tardy. After that, 1% will be deducted from your grade for each tardy.
  • Be present in class. Be an active participant in classroom discussions and activities.
  • Be prepared. Bring daily materials to class every day: pen, text, notebook, homework, etc.
  • Be respectful. Respect of fellow students and their views will create an energetic learning environment. Actions that disrupt the class, detract from the lesson, or embarrass other students will not be tolerated.
  • If you would like to answer/ask a question or comment to the entire class, please raise your hand and I will call on you.
  • I dismiss the class, not the bell. Remain in your seat until I have dismissed you.
  • Do not ask me about your grade during class time. To discuss grades, try to catch me before class or make an appointment.
  • Cell phones are NOT allowed. Abuse of this policy may result in the lowering of one’s overall grade.
  • Cheating or plagiarism will result in a zero for the assignment and depending on the severity, it may earn an F for the class. Don’t do it!

Grading Scale

10100-90 A / 8579-70 C / <7<59 F
9289-80 B / 7069-60 D

Note: every assignment will receive a numeric score of 0-100.

Grade Weights

Exams 25% / PaFinal Exam 10%
H Homework 20% / Participation/Conduct* 15%
Quizzes 30%
  • Participation grades will include consideration of promptness to class, preparedness for class, respect for others, conduct consistent with LTHS and CPS Uniform Discipline Code, and attendance.

Macroeconomic Course Outline

Unit 1: The Nature of Economics (Basic Economic Concepts, and Supply and Demand)

  1. Thinking Like an Economist
  2. Economics as a social science
  3. Using economic models
  1. Basic Definitions
  2. Microeconomics and macroeconomics
  3. Ceteris paribus
  1. Scarcity
  2. Opportunity cost
  3. Production possibilities curves
  1. Specialization and Trade
  2. Adam Smith and David Ricardo
  3. Absolute advantage
  4. Comparative advantage
  5. Analysis of how trade makes us better off
  1. The Functions of an Economic System
  2. Fundamental economic questions (what, how, and for whom to produce)
  3. Market, command, traditional, and mixed economies
  1. Demand
  2. Measuring consumer demand (individual and market)
  3. Relationship between price and quantity demanded
  4. Determinants of demand
  5. Changes in quantity demanded vs. changes in demand
  1. Supply
  2. Measuring Supply
  3. Relationship between supply and quantity supplied
  4. Determinants of supply
  5. Changes in quantity supplied vs. changes in supply
  1. Equilibrium
  2. Why an how price and quantity move toward equilibrium
  3. Effects of shifts in supply and demand on equilibrium
  4. Basic manipulation of the supply and demand model
  1. Elasticity of Demand and Supply
  2. Price elasticity of demand
  3. Price elasticity of supply

Unit 2: The Data of Macroeconomics (Measuring Economic Performance)

  1. Gross Domestic Product Accounting
  2. Measuring broad economic goals
  3. Circular flow of goods, services, and resources
  4. Circular flow of money (income)
  5. The expenditure approach to measuring GDP
  6. The income approach to measuring GDP
  7. The relationship GDP and GNP
  1. Macroeconomic Measurements
  2. GDP
  3. Nominal and real GDP
  4. Economic growth
  5. Price level
  6. Employment
  1. Inflation and Price Indexes
  2. Difference between price level and inflation
  3. Different price indexes (CPI, PPI, etc.)
  4. The CPI and GDP deflator
  5. Nominal vs. real quantities
  1. Unemployment
  2. Unemployment rate
  3. Labor force participation rate
  4. Natural rate of unemployment
  5. Types of unemployment
  1. Business Cycles
  2. Phases of business cycle
  3. Definition of recession
  4. Macroeconomic indicators

Unit 3: Aggregate Demand and Aggregate Supply, and Fiscal Policy

  1. Aggregate Demand
  2. Definition of aggregate demand
  3. Components of aggregate demand
  4. Shifting the aggregate demand curve
  5. Determinants of shifts in the aggregate demand curve
  1. Aggregate Supply
  2. Definition of aggregate supply
  3. Shifting the aggregate supply curve
  4. Determinants of shifts in the aggregate supply curve
  5. A look at different representations of the aggregate supply curve (short-run/long-run)
  6. Classical analysis vs. Keynesian analysis
  1. Macroeconomic equilibrium
  2. Aggregate demand and aggregate supply together
  3. Demand-pull and supply-push inflation
  4. Short-run equilibrium and Long-run equilibrium
  5. The relationship between shifts in LRAS and the PPC
  6. Full employment and economic growth
  1. Consumption and Investment
  2. Income hypotheses (Keynes, Duesenberry, and Friedman)
  3. Marginal propensity to consume
  4. Marginal propensity to save
  5. Autonomous investment
  1. Aggregate Expenditures
  2. Keynes and the aggregate expenditure model
  3. C + I + G + NX revisited
  4. The income multiplier
  5. The relationship between savings and investment
  6. The relationship between aggregate expenditure and aggregate demand
  1. Fiscal Policy
  2. Business cycles revisited
  3. Phases of business cycle
  4. A closer look at inflation
  5. A closer look at recessions
  6. A look at the federal budget
  7. Government spending and taxation
  8. Budget surplus/deficit
  9. The tax multiplier and the balanced budget multiplier
  10. Types of fiscal policy
  11. Expansionary fiscal policy and unemployment
  12. Crowding out
  13. Contractionary fiscal policy and inflation
  14. Crowding in
  15. Automatic stabilizers
  16. Inflationary and recessionary gaps
  17. A graphical look at the effects of fiscal policy
  18. Counter-cyclical fiscal policy

Unit 4: Monetary Policy: Money, Banking and the Federal Reserve (Economic Stability)

  1. Money and the Banking System
  2. Definitions of money and the function of money
  3. Relationship of money supply to nominal gross domestic product
  4. Classical vs. Keynesian view of money
  5. The equation of exchange
  6. Quantity theory of money
  7. Creation of money and the deposit expansion multiplier
  8. Monetarism
  1. The Federal Reserve
  2. The structure of the federal reserve system
  3. The FOMC
  4. Functions of the federal reserve system
  1. Monetary Policy and Aggregate Demand
  2. The fractional reserve system
  3. Balance sheet (assets and liabilities)
  4. Money multiplier
  5. Monetary policy: the tools of the central bank
  6. Monetary policy: change in money supply
  7. Counter-cyclical monetary policy
  1. Real versus Nominal Interest Rates
  2. Definition of real and nominal interest rates
  3. Money supply vs. interest rate targets
  4. Short-run effects on monetary policy on real and nominal interest rates
  5. Long-run effects of monetary policy on real and nominal interest rates
  6. Fisher equation showing the relationship between real and nominal interest rates

Unit 5: Government and the Economy (Economic Growth and Stability)

  1. The Influence of Fiscal Policy and Monetary Policy
  2. Fiscal and monetary policy working together
  3. The interest rate effects of fiscal policy and monetary policy
  4. The loanable funds market
  5. The money market
  1. Trade-off between Inflation and Unemployment
  2. Short-run Phillips curve
  3. Long-run Phillips curve
  1. Macroeconomic Theories
  2. Classical
  3. Keynesian
  4. Neo classical economics
  5. Monetarism
  6. Supply shock
  7. Rational expectations
  1. Economic Growth
  2. Sources of economic growth
  3. What policies promote economic growth
  4. Taxation and economic growth (Laffer curve)
  5. Showing economic growth using aggregate demand and aggregate supply analysis revisited
  6. Showing economic growth using production possibilities revisited

Unit 6: The Global Economy

  1. International Economics and International Trade
  2. Absolute advantage
  3. Comparative advantage
  4. Gains from trade
  5. Free trade
  6. Free trade versus protectionism
  1. International Finance
  2. The current account, capital account, and the balance payment
  3. Exchange rates
  4. Exchange markets
  5. Appreciation and depreciation of currencies
  6. How domestic and foreign economies affect the exchange rate
  1. Fiscal Policy and Monetary Policy and International Economics
  2. Income effects
  3. Price effects
  4. Interest rate effects
  1. The Economics of Less-Developed Economies
  2. Poverty in less-developed countries
  3. Foreign investment in less-developed countries
  4. Economic aid to less-developed countries
  1. Government Intervention
  2. Foreign exchange markets
  3. Trade barriers
  4. Tariffs
  5. Quotas

Please return this portion of the form to Mr. Carity by Friday, September 8, 2017.

I have read and understand the guidelines and procedures for Mr. Carity’sAPMacroeconomics class and have shared these with my parent(s)/guardian(s).

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Thank you. I look forward to working with you and your child this term.