AP® Macroeconomics COURSE AND EXAM DESCRIPTION Effective Fall 2020 AP COURSE AND EXAM DESCRIPTIONS ARE UPDATED PERIODICALLY Please visit AP Central ( ) to determine whether apcentral.collegeboard.org a more recent course and exam description is available. About College Board College Board is a mission-driven not-for-profit organization that connects students to college success and opportunity. Founded in 1900, College Board was created to expand access to higher education. Today, the membership association is made up of over 6,000 of the world’s leading educational institutions and is dedicated to promoting excellence and equity in education. Each year, College Board helps more than seven million students prepare for a successful transition to college through programs and services in college readiness and college success—including the SAT® and the Advanced Placement® Program. The organization also serves the education community through research and advocacy on behalf of students, educators, and schools. For further information, visit collegeboard.org. AP Equity and Access Policy College Board strongly encourages educators to make equitable access a guiding principle for their AP programs by giving all willing and academically prepared students the opportunity to participate in AP. We encourage the elimination of barriers that restrict access to AP for students from ethnic, racial, and socioeconomic groups that have been traditionally underrepresented. Schools should make every effort to ensure their AP classes reflect the diversity of their student population. College Board also believes that all students should have access to academically challenging coursework before they enroll in AP classes, which can prepare them for AP success. It is only through a commitment to equitable preparation and access that true equity and excellence can be achieved. Designers: Sonny Mui and Bill Tully © 2020 College Board. College Board, Advanced Placement, AP, AP Central, and the acorn logo are registered trademarks of College Board. All other products and services may be trademarks of their respective owners. Visit College Board on the web: collegeboard.org. Contents v Acknowledgments 1 About AP 4 AP Resources and Supports 6 Instructional Model 7 About the AP Macroeconomics Course 7 College Course Equivalent 7 Prerequisites COURSE FRAMEWORK 11 Introduction 13 Course Framework Components 15 Course Skills 17 Course Content 20 Course at a Glance 23 Unit Guides 25 Using the Unit Guides 29 UNIT 1: Basic Economic Concepts 41 UNIT 2: Economic Indicators and the Business Cycle 55 UNIT 3: National Income and Price Determination 71 UNIT 4: Financial Sector 87 UNIT 5: Long-Run Consequences of Stabilization Policies 101 UNIT 6: Open Economy—International Trade and Finance INSTRUCTIONAL APPROACHES 115 Selecting and Using Course Materials 116 Teaching the AP Economics Courses 117 Instructional Strategies 122 Developing Course Skills EXAM INFORMATION 129 Exam Overview 134 Sample Exam Questions SCORING GUIDELINES 141 Question 1: Long 145 Question 2: Short APPENDIX 149 AP Macroeconomics Conceptual Framework 169 AP Macroeconomics Graphs and Visuals THIS PAGE IS INTENTIONALLY LEFT BLANK. Acknowledgments College Board would like to acknowledge the following committee members, consultants, and reviewers for their assistance with and commitment to the development of this course. All individuals and their affiliations were current at the time of contribution. Patricia Brazill, The College at Brockport - SUNY, Brockport, NY Liang Ding, Macalester College, Saint Paul, MN Theresa Fischer, Ridgefield High School, Ridgefield, CT Brian Held, Loyola High School of Los Angeles, Los Angeles, CA Holly Jones, The Pennington School, Pennington, NJ Elaine McBeth, College of William and Mary, Williamsburg, VA Jennifer Raphaels, Ridge High School, Basking Ridge, NJ Arthur Raymond, Muhlenberg College, Allentown, PA Matthew Romano, Marist School, Atlanta, GA Gabriel Sanchez, Bonita High School, LaVerne, CA Fred Smith, Davidson College, Davidson, NC Stephanie Vanderford, Providence Day School, Charlotte, NC Shaun Waldron, Niles West High School, Skokie, IL Please note that the course framework included in this document was inspired by work originally undertaken by the AP Macroeconomics Curriculum Development and Assessment Committee. College Board Staff Elizabeth Healy, Director, AP Economics Content and Instructional Development Dana Kopelman, Executive Director, AP Content Integration and Change Management Daniel McDonough, Senior Director, AP Content Integration Allison Milverton, Director, AP Curricular Publications Allison Thurber, Executive Director, AP Curriculum and Assessment SPECIAL THANKS Christopher Budano and John R. Williamson AP Macroeconomics Course and Exam Description V.1 | v Return to Table of Contents © 2020 College Board THIS PAGE IS INTENTIONALLY LEFT BLANK. About AP College Board’s Advanced Placement® Program (AP®) to provide teachers and students with formative enables willing and academically prepared students assessments—Personal Progress Checks—that to pursue college-level studies—with the opportunity teachers can assign throughout the year to measure to earn college credit, advanced placement, or student progress as they acquire content knowledge both—while still in high school. Through AP courses and develop skills. in 38 subjects, each culminating in a challenging exam, students learn to think critically, construct solid Enrolling Students: arguments, and see many sides of an issue—skills Equity and Access that prepare them for college and beyond. Taking AP courses demonstrates to college admission officers College Board strongly encourages educators to that students have sought the most challenging make equitable access a guiding principle for their curriculum available to them, and research indicates AP programs by giving all willing and academically that students who score a 3 or higher on an AP Exam prepared students the opportunity to participate typically experience greater academic success in in AP. We encourage the elimination of barriers college and are more likely to earn a college degree that restrict access to AP for students from ethnic, than non-AP students. Each AP teacher’s syllabus racial, and socioeconomic groups that have been is evaluated and approved by faculty from some of traditionally underserved. College Board also believes the nation’s leading colleges and universities, and that all students should have access to academically AP Exams are developed and scored by college faculty challenging coursework before they enroll in AP classes, and experienced AP teachers. Most four-year colleges which can prepare them for AP success. It is only and universities in the United States grant credit, through a commitment to equitable preparation and advanced placement, or both on the basis of successful access that true equity and excellence can be achieved. AP Exam scores; more than 3,300 institutions worldwide annually receive AP scores. Offering AP Courses: The AP Course Audit AP Course Development The AP Program unequivocally supports the principle In an ongoing effort to maintain alignment with best that each school implements its own curriculum that will practices in college-level learning, AP courses and enable students to develop the content understandings exams emphasize challenging, research-based and skills described in the course framework. curricula aligned with higher education expectations. While the unit sequence represented in this publication Individual teachers are responsible for designing their is optional, the AP Program does have a short list of own curriculum for AP courses, selecting appropriate curricular and resource requirements that must be college-level readings, assignments, and resources. fulfilled before a school can label a course “Advanced This course and exam description presents the content Placement” or “AP.” Schools wishing to offer AP and skills that are the focus of the corresponding courses must participate in the AP Course Audit, a college course and that appear on the AP Exam. It also process through which AP teachers’ course materials organizes the content and skills into a series of units are reviewed by college faculty. The AP Course Audit that represent a sequence found in widely adopted was created to provide teachers and administrators college textbooks and that many AP teachers have with clear guidelines on curricular and resource told us they follow in order to focus their instruction. requirements for AP courses and to help colleges and The intention of this publication is to respect teachers’ universities validate courses marked “AP” on students’ time and expertise by providing a roadmap that they transcripts. This process ensures that AP teachers’ can modify and adapt to their local priorities and courses meet or exceed the curricular and resource preferences. Moreover, by organizing the AP course expectations that college and secondary school faculty content and skills into units, the AP Program is able have established for college-level courses. AP Macroeconomics Course and Exam Description V.1 | 1 Return to Table of Contents © 2020 College Board The AP Course Audit form is submitted by the AP questions and through-course performance teacher and the school principal (or designated assessments, as applicable, are scored by thousands administrator) to confirm awareness and understanding of college faculty and expert AP teachers. Most are of the curricular and resource requirements.