This will be info on Unit 2 since Unit 1 was covered in AP Micro.

AP Test:

• 12-17%
• 7 to 10 questions

Major Topics:

A. National income accounts

1. Circular flow

2. Gross domestic product

3. Components of gross domestic product

4. Real versus nominal gross domestic product

B. Inflation measurement and adjustment

1. Price indices

2. Nominal and real values

3. Costs of inflation

C. Unemployment

1. Definition and measurement

2. Types of unemployment

3. Natural rate of unemployment

College Board Description:

This unit begins with a model of the circular flow of income and products that contain the four sectors: households, businesses, government, and international. Students will examine the key measures of economic performance: gross domestic product, unemployment, and inflation.

• Gross domestic product - students will learn how it is measured, have a clear understanding of its components, and be able to distinguish between real and nominal GDP.
• Unemployment - students will examine the nature and causes of unemployment, the costs of unemployment, and criticisms associated with the measurement of the unemployment rate. They will also examine the natural rate of unemployment and the factors that affect it.
• Inflation - Students will examine inflation and how it is measured, costs of inflation, the main price indices, and how to use these price indices.