Tools for Teaching with AP Macroeconomics: Learning with Current Data— FRED® in the AP Macro Classroom Authors Brian Held, AP Economics Teacher, Loyola High School, Los Angeles Mark Bayles, Senior Economic Education Specialist, Federal Reserve Bank of St. Louis Introduction Each of these 17 activities shares a common structure and is designed to be distributed to students and completed in steps. Using FRED®—Federal Reserve Economic Data—students will create a visual display of data in graph form, constructing their own window of understanding by using the latest available macro data. Each activity stands on its own and is designed to be completed in one class period. As they work through the activities, students will increase their data literacy while acquiring skills in finding, manipulating, and displaying quantitative data. Instructors may extend the activities by adding related data series or by supplying relevant writing or discussion prompts. Activities conclude with an option to save the completed graph(s) to a FRED® dashboard. Students with FRED® accounts receive free unlimited cloud storage of their FRED® graphs and data collections: They can easily assemble a portfolio of graphs. Student-created dashboards may be accessed anytime from any location with internet access. Students can register for their own FRED® account at https://fred.stlouisfed.org/. Concepts The activities may be grouped under the following main topics: GDP: 1-2 Inflation: 3-4, 11 Interest rates: 5-6 Federal budget: 7-8 Employment: 9a-e, 10 Money: 12 Phillips curve: 13 Tools for Teaching with FRED® ©2019, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education. AP Macroeconomics: Learning with Current Data—FRED® in the AP Macro Classroom Activity 1: National Income: GDP This activity focuses on the income component of the 2007-09 recession, and you will use FRED®— Federal Reserve Economic Data—to find relevant data. FRED® is a great and easy-to-master tool for finding, viewing, and manipulating official data. 1. Go to https://fred.stlouisfed.org/ and sign in to your personal FRED® account. 2. In the search bar, type in “nominal GDP.” One of the first few results should be Gross Domestic Product, Billions of Dollars, Quarterly, Seasonally Adjusted Annual Rate. Click on this. 3. Mouse over the graph line. You will see a pop-up displaying a value for GDP at each of the data points. By what frequency do the periods change? 4. Place the cursor on the most recent point to find a current value for GDP. What is the current level of GDP? What are the units? 5. Look at the upper right of the screen for an orange button that says EDIT GRAPH. Click it and make sure the EDIT LINE 1 tab is highlighted. Look below where there is an option that says Units. Click in the Units box and change the units to Percent Change from Year Ago. Look at the graph now. What is the current percent change in nominal GDP? Why might this value overstate actual GDP growth? 6. Place the cursor on the most recent point to find a current value for GDP, Percent Change from Year Ago. What is the current level of GDP? What are the units? 7. What is the highest rate of percent change in nominal GDP since the end of the Great Recession? In what year/quarter is this reported? Tools for Teaching with FRED® ©2019, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education. 1.1 AP Macroeconomics: Learning with Current Data—FRED® in the AP Macro Classroom 8. The gray bars represent recessions. Take a closer look at the Great Recession (December 2007 to July 2009). Drag the left button of the slider bar below the x-axis to the right so that the date range in the display begins just before the most recent gray bar (use October 2007). Now, mouse over the starting point of the recession. What is the annual percent change in nominal GDP at the start of the recession? 9. What is the lowest annual percent change from a year ago in nominal GDP during the recession? 10. Save the graph to your FRED® account: Find the Account Tools button under the graph and click it. Select Save Graph. Select an Observation Range. The middle choice—Always chart from YYYY-00-00 to the last value available—will ensure that your graph updates when- ever new data are added to the series. Type in a title and click Save Graph. You may create a Category folder first, if you wish, and save the graph in the folder. 11. Dashboard option: Finish by adding the completed graph to a FRED® dashboard that you will now create. Begin by clicking the dropdown menu under MY ACCOUNT and select Dashboards. Click the +Add New > Dashboard buttons and give your dashboard a name. An appropriate name for these activities would be “AP Macro Dashboard_[First Name_Last Name Initial].” Click the Create button. 12. Next, click the Graphs tab on the left and find your recently saved graph. Click on it. Click the Account Tools button under the graph and select Add to Dashboard. Select your dashboard and in the Graph Name box, type “Activity 1-National Income: GDP.” Select an Observation Range. The middle choice—Always chart from YYYY-00-00 to the last value available— will ensure that your graph updates whenever new data are added to the series. Click Add to Dashboard. 13. Once added to your dashboard, the graph may be resized or re-arranged, along with other graphs you add to the dashboard. To share the dashboard you must click Actions > Make Public. Then anyone with the URL can view a copy of your dashboard. Tools for Teaching with FRED® ©2019, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education. 1.2 AP Macroeconomics: Learning with Current Data—FRED® in the AP Macro Classroom Activity 2: National Income: Real GDP This activity focuses on the real income component of the 2007-09 recession, and you will use FRED® to find relevant data. FRED® is a great and simple tool for finding, viewing, and manipulating official data. 1. Go to https://fred.stlouisfed.org/ and sign in to your personal FRED® account. 2. In the search bar, type in “real GDP.” One of the first few results should be Real Gross Domestic Product, Billions of Chained 2012 Dollars, Quarterly, Seasonally Adjusted Annual Rate. Click on this. Real GDP is the most widely reported indicator for national income. 3. What is the source of this data? 4. Mouse over the graph line. You will see a pop-up displaying a value for real GDP at each of the data points. By what frequency do the periods change? 5. Place the cursor on the most recent point to find a current value for real GDP. What is the current level of GDP? What are the units? In what year/quarter is this reported? 6. Look at the upper right of the screen for an orange button that says EDIT GRAPH. Click it and make sure the EDIT LINE 1 tab is highlighted. Look below where there is an option that says Units. Click in the Units box and change the units to Percent Change from Year Ago. Look at the graph now. The (trend line of) percent change of real GDP is the most widely reported way to describe the economic growth rate. Current percent changes are a proxy for it. What is the current rate of economic growth? Tools for Teaching with FRED® ©2019, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education. 2.1 AP Macroeconomics: Learning with Current Data—FRED® in the AP Macro Classroom 7. What was the rate of economic growth at the worst point during the 2007-09 recession? (The gray bars represent recessions.) In what year/quarter was this reported? 8. What is the highest rate of economic growth since the 2007-09 recession (December 2007)? In what year/quarter is this reported? 9. What has the growth rate done since it reached this most recent high? 10. What is the highest rate of growth since 1950? What are the highest three peaks of growth and when did they occur? What was the historical context for each of these periods of growth? 11. How would you compare the changes since the last recession with those in prior decades? 12. Save the graph to your FRED® account: Find the Account Tools button under the graph and click it. Select Save Graph. Select an Observation Range. The middle choice—Always chart from YYYY-00-00 to the last value available—will ensure that your graph updates when- ever new data are added to the series. Type in a title and click Save Graph. You may create a Category folder first, if you wish, and save the graph in the folder. 13. Dashboard option: Finish by adding the completed graph to your FRED® dashboard. Click the Account Tools button under the graph and select Add to Dashboard.