AP Economics is a combination of ​AP Microeconomics and AP Macroeconomics.

AP Microeconomics gives students a thorough understanding of the principles of economics that apply to the functions of individual decision makers, both consumers and producers, within the larger economic system. It places primary emphasis on the nation and functions of product markets and includes the study of factor markets and of the role of government in promoting greater efficiency and equity in the economy. The students study the various firms and how they utilize their factors of production and compete in the market .

AP Macroeconomics gives students a thorough understanding of the principles of economics that apply to an economic system as a whole. Such a course places particular emphasis on the study of national income and price determination and also develops students’ familiarity with economic performance measures, economic growth and international economics. The main focus is on how fiscal and monetary policy factor in the effects onto the general economy and how the interaction between the two contribute to long run aggregate supply.

ESSENTIAL QUESTIONS

• How does the scarcity of the factors of production force society to allocate their use of goods and services?
• How do different economic systems provide goods and service for their societies?
• How does voluntary trade create wealth?
• How do prices send signals and provide incentives to buyers and sellers?
• How does competition create lower prices and costs and encourage producers to produce more of what consumers are willing and able to buy?
• How do American institutions evolve in market economies to help individuals and groups accomplish their goals?
• How does the role of money make it easier to trade, borrow, save, invest and compare the value of goods and services?
• How does the market value of productive resources determine income for land, labor and capital?
• How does investment in factories, machinery, new technology and the health, education and training of people, contribute to growth and raise future standards of living?
• How does the Federal Reserve System and monetary policy influence the overall levels of employment, output and prices?
• How does government fiscal policy of appropriation, taxation and budgetary management influence the overall levels of employment, output and prices?
• How do unemployment and inflation impose unexpected costs on some people and benefits on others?(
• How can one evaluate statistical information and develop their predictions based on the data?
• How do the various schools of economic theory of Classical, Monetarist and Keynesian economists solve the economic woes?

FOCUS QUESTIONS

• ​What are the basic economic concepts and how does economics considered a social science?​
• ​What are the economic goals in the USA economy?
• What is the importance of allocating resources in a thriving economy?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• identify ​the conditions that give rise to the economic problem of scarcity.
• describe ​the functions of decision making.
• describe ​the three basic goals of most societies.
• understand ​the importance of comparative and absolute advantage.

DEVELOPING AN INTERPRETATION The student will . . .

• identify​ the conflicts of several socioeconomic goals.
• explain​ ​the cause and effect of relations of scarcity, opportunity cost and the economic goal.
• analyze​ ​the comparative and absolute advantage process of trade.
• describe​ the importance of absolute and comparative advantage.

MAKING CONNECTIONS The student will . . .

• apply​ the concepts of opportunity cost to a production possibilities curve.
• evaluate​ the mix of tradition, command and market systems in the different economies.
• identify​ the conditions that rise to the economic problem of scarcity and leads nations to conflict.
• describe ​the importance of production possibilities curve.
• differentiate ​between absolute and comparative advantage.

EXAMINING THE CONTENT The student will . . .

• evaluate​ the strengths and weakness of the economic systems.
• judge​ the importance of comparative advantage.
• compose​ their own supply and demand graphs which indicate market surpluses, shortages along with price ceilings and price floors.
• evaluate​ the importance of productive efficiency and allocative efficiency in our economy.
• create ​their own production possibilities curve for their society, business, and life.
• evaluate ​a nations’s trade possibilities​.

FOCUS QUESTIONS

• Why does price and quantity move toward equilibrium?​
• ​How does the market communicate?
• How does elasticity affect the market?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• identify the determinants of demand and supply.
• demonstrate​ graphically demand, supply, elasticity and indifference curves.
• recognize the differences between elasticity of demand, supply and unit elastic.
• explain how the market coordinates between the buyer and the seller.
• calculate the total revenue test for elasticity.
• describe​ the effects of shortages and surpluses in the economy.
• illustrate changes in supply and demand as compared to change in quantity of supply and demand.

DEVELOPING AN INTERPRETATION The student will . . .

• predict ​the effects of pricing in the elastic and inelastic range.
• describe​ the relationship between income, spending and indifference curves.

MAKING CONNECTIONS The student will . . .

• examine ​real world applications of supply and demand.
• compare ​elasticity of monopolies, oligopolies and perfect competition.

EXAMINING THE CONTENT The student will . . .

• analyze​ the effects of pricing and elasticity.
• compare​ the determinants for supply and demand.
• evaluate ​the marketing techniques for marginal utility and indifference curves.

FOCUS QUESTIONS

• How do different firms meet the demands of the marketplace?
• How do the different firms operate in deciding their marginal costs and marginal revenues?
• How do firms meet their productive and allocative efficiency?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• demonstrate​ knowledge of cost curves.
• display​ knowledge of product pricing and outputs for the four different firms.
• draw​ the different cost curves for the different types of firms.
• compute the costs for the various firms.
• determine the productive and allocative efficiency for the four different firms.
• show the input of government regulations on efficiency.
• understand the importance of profit maximization of output.

DEVELOPING AN INTERPRETATION The student will . . .

• explain the ​challenges of the four different firms.
• generalize ​the conditions for the firms in the USA.
• Interpret ​the possible outcomes of government policies.

MAKING CONNECTIONS The student will . . .

• describe the ​patterns of the various firms.
• explain ​the conditions of elasticity and the impact it has the various firms.
• analyze​ the relationships between the various cost curves.
• differentiate ​between short run and long run.

EXAMINING THE CONTENT The student will . . .

• apply ​their knowledge of cost curves to the various firms.
• compare and contrast​ the cost curves of the various firms.
• create ​clear and precise graphs of the firms.

FOCUS QUESTIONS

• How does the change in demand for the product affect the factor market?
• ​How are wages determined in the USA economy?
• ​How do businesses assess their economic profits?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• describe the differences between product and factor markets.
• illustrate the principles of derived demand and marginal physical product.
• identify the principles employed by profit maximizing firms to determine how much of a resource it will employ.

DEVELOPING AN INTERPRETATION The student will . . .

• explain,​ using graphs, what determines the wage rate and level of employment.
• analyze​ the factors that lead to the rising general level of real wages in the USA.

MAKING CONNECTIONS The student will . . .

• interpret the future of the job markets in the USA.
• describe the differences between explicit and implicit costsInfer the reasons for price differences in land

EXAMINING THE CONTENT The student will . . .

• assess ​the wages in the USA historically.
• evaluate​ the importance of profits in the USA.

FOCUS QUESTIONS

• ​Why is there a need for government intervention in the market place?
• How can government promote efficiency and marginal social benefits in society?
• How can we judge the equity of an economy’s income distribution?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• examine conditions for economic efficiency using marginal social benefits and marginal social costs.
• describe the relationships between positive and negative externalities.
• illustrate how the market distribution of income creates market failures in competitive free market economies.
• determine the effectiveness of government policies (taxes, quality controls)Conclude the power of monopolies in creating market failures and economic efficiencies.
• demonstrate graphically positive and negative market conditions.

DEVELOPING AN INTERPRETATION The student will . . .

• predict​ the government’s attempt to solve problems in using antitrust legislation.
• summarize​ the graphing of the Lorenz curve and the Gini coefficient.
• conclude​ the need to maximize resources for the most efficient outcome.

MAKING CONNECTIONS The student will . . .

• generalize ​the effects of government interaction in to the economy.
• draw conclusions​ for the reasons of negative externalities in society.
• interpret​ government policies to correct income inequalities.

EXAMINING THE CONTENT The student will . . .

• evaluate the process in which government correct externalities.
• compare and contrast market failures in the USA and abroad.
• defend government policies to correct inequalities, inefficiencies and the role of government in the economy.

ESSENTIAL QUESTIONS

• How does the scarcity of the factors of production force society to allocate their use of goods and services?
• How do different economic systems provide goods and service for their societies?
• How does voluntary trade create wealth?
• How do prices send signals and provide incentives to buyers and sellers?
• How does competition create lower prices and costs and encourage producers to produce more of what consumers are willing and able to buy?
• How do American institutions evolve in market economies to help individuals and groups accomplish their goals?
• How does the role of money make it easier to trade, borrow, save, invest and compare the value of goods and services?
• How does the market value of productive resources determine income for land, labor and capital?
• How does investment in factories, machinery, new technology and the health, education and training of people, contribute to growth and raise future standards of living?
• How does the Federal Reserve System and monetary policy influence the overall levels of employment, output and prices?
• How does government fiscal policy of appropriation, taxation and budgetary management influence the overall levels of employment, output and prices?
• How do unemployment and inflation impose unexpected costs on some people and benefits on others?
• How can one evaluate statistical information and develop their predictions based on the data?
• How do the various schools of economic theory of Classical, Monetarist and Keynesian economists solve the economic woes?

FOCUS QUESTIONS

• What are the basic economic concepts and how does economics considered a social science?
• What are the economic goals in the USA economy?
• hat is the importance of allocating resources in a thriving economy?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• identify ​the conditions that give rise to the economic problem of scarcity.
• describe ​the functions of decision making.
• describe ​the three basic goals of most societies.
• understand ​the importance of absolute and comparative advantage.
• understand ​the construction of a production possibilities curve.

DEVELOPING AN INTERPRETATION The student will . . .

• identify​ the conflicts of several socioeconomic goals.
• explain​ ​the cause and effect of relations of scarcity, opportunity cost and the economic goal.
• analyze​ ​the comparative and absolute advantage process of trade.

MAKING CONNECTIONS The student will . . .

• apply​ the concepts of opportunity cost to a production possibilities curve.
• evaluate​ the mix of tradition, command and market systems in the different economies.
• identify​ the conditions that rise to the economic problem of scarcity and leads nations to conflict.
• apply ​the concepts of absolute and comparative advantage

EXAMINING THE CONTENT The student will . . .

• evaluate​ the strengths and weakness of the economic systems.
• judge​ the importance of comparative advantage.
• compose​ their own supply and demand graphs which indicate market surpluses, shortages along with price ceilings and price floors.
• evaluate​ the importance of productive efficiency and allocative efficiency in our economy.
• construct ​production possibilities curve and relate this to the economy.

FOCUS QUESTIONS

• How does the study of aggregate demand and aggregate supply help students understand circular flow?
• What is the meaning of GDP and its significance to the health of the economy?
• How does real and nominal GDP affect employment and spending?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• describe​ the purpose of national accounting.
• define GDP (gross domestic product), NNP(net domestic product), NI )National Income). PI(Personal Income) and DI (Disposable Income).
• compute​ GDP using both the income and expenditure approach.
• identify​ the phases of the business cycles.
• display knowledge about the causes of friction, structural and cyclical unemployment.
• demonstrate​ the differences between cost push and demand pull inflation.
• list​ the causes of each business cycle

DEVELOPING AN INTERPRETATION The student will . . .

• conclude​ the groups hurt and groups benefit from unanticipated inflation.
• interpret ​economic data the identify the phases of the businesses cycles.
• conclude​ why there is a difference between nominal and real GDP.

MAKING CONNECTIONS The student will . . .

• compare the difference economic solutions for the economic conditions.
• take perspective of the unemployment conditions and evaluate their consequences.
• contrast the causes of previous economic conditions to the present.

EXAMINING THE CONTENT The student will . . .

• evaluate ​the causes of stagflation.
• analyze​ the conditions of full employment and unemploymentIdentify​ the important indexes to evaluate the economy.

FOCUS QUESTIONS

• How does aggregate demand and aggregate supply affect the USA economy?
• How does fiscal policy influence the USA economy?
• What are the challenges of maintaining a stable economy?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• understand​ the components of aggregate demand and aggregate supply.
• describe and calculate from given data the marginal propensity to consume (MPC) and the marginal propensity to save (MPS).
• distinguish​ between contractionary and expansionary fiscal policy.
• list​ the determinants for aggregate supply and aggregate demand.
• summarize​ the policy levels of fiscal policy.
• graph aggregate demand and aggregate supply based on the various business cycles.

DEVELOPING AN INTERPRETATION The student will . . .

• examine ​the difference between automatic and discretionary fiscal policy.
• construct​ the effects of fiscal policy and the balance budget multiplier.
• derive ​aggregate demand from aggregate expenditure equibliria that result in the price level changes.

MAKING CONNECTIONS The student will . . .

• construct and show graphically​ ​how fiscal policy can be used to reduce any inflationary or recessionary gap.
• analyze ​the significance of the multiplier in aggregate demand.
• interpret ​the effects of changes in investment and savings.

EXAMINING THE CONTENT The student will . . .

• identify ​the proper policy to follow for the various business cycles.
• critique ​past and present fiscal policies.
• evaluate​ Supply Side, Classical and Keynesian policies.

FOCUS QUESTIONS

• How does the banking system create money?
• What enables the Federal Reserve Banking system to create effective monetary policy?
• How does the different views of monetary policy address its challenges?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• define and explain the functions of money.
• calculate the money growth possible from a given value of excess reserves.
• summarize the Federal Reserve policy tools for inflation and recession.
• sequence the events that result from Federal Reserve policy tools.
• illustrate by graphing the various effects of Federal Reserve policies.
• summarize and explain the equation of exchange (MV=PQ).

DEVELOPING AN INTERPRETATION The student will . . .

• explain​ the Keynesian and monetary view of monetary policy.
• explain and contrast the effectiveness of controlling interest rates to controlling monetary base as an effective monetary policy.
• predict ​the outcomes of various monetary policies.

MAKING CONNECTIONS The student will . . .

• generalize the effectiveness of monetary policy as compared to fiscal policy.
• apply the theory of monetary policy to todays economic conditions.
• describe the relationships between monetary policy and the value of money domestically and internationally.

EXAMINING THE CONTENT The student will . . .

• Identify error ​historically to monetary policy.
• synthesize​ the approach that various administrations have taken to Monetary policy.

FOCUS QUESTIONS

• What are the tradeoffs involved in the various economic policy prescriptions?
• How do the various economic theories apply to today’s world?
• What are the assumptions, values, theoretical support and applicable time period underlying recommendations concerning monetary and fiscal policy?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• identify the economic problems and recommend monetary and fiscal policies to improve the economic performance.
• use aggregate demand and aggregate supply models to analyze and propose solutions to those economic problems.
• apply ​the multiplier to analyze the economic problems and propose solutions to those problems.
• understand the Phillips curve to illustrate the trade offs between inflation and unemployment.
• describe the essence of Classical, Keynesian, Monetarist, Supply Side and New Classical theories of economics.
• demonstrate knowledge of the tools of fiscal and monetary policy.
• illustrate the differences between long run and short run aggregate supply.

DEVELOPING AN INTERPRETATION The student will . . .

• construct ​graphs that will exhibit their knowledge of the implementation of monetary and fiscal policy together.
• explain ​how fiscal and monetary policy conflict with each other and their goals.
• forecast​ the effective of fiscal and monetary policy on the value of the dollar.

MAKING CONNECTIONS The student will . . .

• compare ​the effectiveness of fiscal vs. monetary policy in the short runHypothsize ​the present fiscal and monetary policy.
• apply​ the knowledge of the economic tools and analyze campaign rhetoric.

EXAMINING THE CONTENT The student will . . .

• defend ​the use of fiscal over monetary policy or monetary over fiscal policyJudge​ the economic policies of the past and present.
• critique the Federal Reserve chairman’s role in the Federal Reserve Bank System.

FOCUS QUESTIONS

• How does the cost-benefit analysis explain a variety of work trade economic actions?
• How does the case for free trade and protectionism create dilemnas for the American economy?
• How does comparative advantage create gains from trade?
• How does foreign exchange reflect the economies of the world?

CONTENT OBJECTIVES

INITIAL UNDERSTANDING The student will . . .

• describe ​and give examples of comparative advantage.
• explain ​why countries choose to specialize in the production of goods and services.
• identify​ why people trade and their benefits.
• understand​ currency and trade and its relationship.
• draw the exchange rate relationship between two currencies depending on pubic policy.
• identify the results of free trade for the world economies.
• predict the results of prices for resources as a result of trade.
• evaluate the value of the dollar and its effect on trade and input costs.

DEVELOPING AN INTERPRETATION The student will . . .

• examine ​the importance of conserving nonrenewable resources.
• analyze​ the choices our market economy will have to cope with the future.
• describe​ the relationship between fiscal and monetary policy and trade.

MAKING CONNECTIONS The student will . . .

• document ​using both primary and secondary sources the history of free trade movement.
• compare and contrast​ the positive and negative effects of a floating dollar.

EXAMINING THE CONTENT The student will . . .

• evaluate ​the s to free trade importance that free trade has on the work economy and resources.
• identify​ the challenges to free trade.
• define​ how free trade can continue with the unsettling international conflicts.