Unit 4: Inflation, Unemployment, & Stabilization

AP Test:

• 10-15% of Multiple Choice
• 6-9 Questions
• Always on FRQ

Major Topics:

A. Aggregate Demand

1. Determinants of aggregate demand

2. Multiplier and crowding-out effects

B. Aggregate Supply

1.Short run and long run analyses

2. Sticky versus flexible wages and prices

3. Determinants of aggregate supply

C. Macroeconomic equilibrium

1. Real output and price level

2. Short-run and long-run

3. Actual versus full employment output

4. Economic fluctuations

College Board Description: