AP Macroeconomics

The foundations shared with microeconomics: scarcity, opportunity cost, the production possibilities curve, and comparative advantage. Students establish the vocabulary and models used throughout the AP Macroeconomics course.

How economists measure the macroeconomy. Topics include GDP and its components, the business cycle, unemployment (types and measurement), and inflation (CPI, causes, and effects). Students interpret real-world economic data and indicators.

The aggregate demand–aggregate supply (AD-AS) model. Students analyse shifts in aggregate demand and supply, the multiplier effect, and the short-run and long-run equilibrium. Fiscal policy tools are introduced and evaluated.

Money, banking, and monetary policy. Students examine the functions of money, the money market, the role of the Federal Reserve (and Bank of Canada), tools of monetary policy, and the relationship between interest rates and investment.

The long-run effects of fiscal and monetary policy. Topics include the Phillips Curve, crowding-out effect, supply-side economics, and debates over the effectiveness and limits of government stabilization. Students evaluate real policy trade-offs.

How economies interact through trade and finance. Topics include the balance of payments, exchange rates (nominal and real), the foreign exchange market, and the effects of trade deficits and surpluses. Students apply macroeconomic models to open-economy scenarios.