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This document provides an outline of topics to review for an AP Macroeconomics exam, including: key economic assumptions; factors of production; economic systems; supply and demand analysis; currency exchange; the circular flow model; business cycles; unemployment; inflation; GDP calculation methods; consumption and savings; investment demand; the balance of payments; aggregate demand and aggregate supply models. It lists key terms, concepts, and graphs to understand for each topic in preparation for the exam.
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C:\Fakepath\Ap Macro Economics Review
- 1. AP Macro EconomicsExam Review
- 2. Key assumptions in EconomicsBasic Economic VocabularyFactors of ProductionFundamental Problem of EconomicsOpportunity CostsTINSTAAFLScarcity & Opportunity Costs
- 3. Draw the graphEfficientInefficientOverextendedProduction Possibilities Curve
- 5. Absolute advantageComparative advantageBe able to work problemsComparative Advantage
- 6. Law of DemandWhy does the law of demand exists?Demand ScheduleT.R.I.P.EMovementShiftDemand
- 7. Law of SupplyWhy does the law of supply exist?Supply ScheduleN.I.C.E.J.A.G.MovementShiftSupply
- 8. Supply = DemandChanges in equilibriumDisequilibriumWhat causes disequilibrium?Supply & Demand Equilibrium
- 9. Buying and selling of currencyDraw the graphCrowding OutReview power point from 2/3/10Foreign Exchange
- 10. Factor MarketProduct MarketHouseholdsFirmsGovernmentPhysical FlowMonetary FlowCircular Flow
- 11. Draw a business cyclePeakTroughRecessionExpansionHow does it relate to the PPC?Business Cycle
- 12. Full EmploymentLabor ForceUnemployedNot in Labor ForceFrictionalStructuralCyclicalSeasonalUnemployment
- 13. Define inflationDefine inflation rateMeasure of cost of livingInflation
- 14. Review power point from 2/16/10Know how to calculateCPI
- 15. Expenditure ApproachConsumption (C)Government Spending (G)Gross Investment (Ig)Net Exports (X)Income ApproachRent (r)Wages (w)Interest (i)Profit (p)GDP
- 16. What is counted in GDP?What is not counted in GDP?Counted or Not Counted
- 17. Whats the difference?Nominal vs Real GDP
- 18. How is it calculated? (Formula)GDP Deflator
- 19. What is the difference in Real and Nominal interest rates?Real vs. Nominal Interest Rates
- 20. DI2 ChoicesFormulas:APCAPSMPCMPSConsumption & Savings
- 21. Determinates of C & S
- 22. Savings & BorrowingDraw the graphWhat changes the demand for loanable funds?What changes the supply of loanable funds?Explain Crowding Out.Loanable Funds Market
- 23. What is investment?Explain Rates of ReturnDraw and explain the Investment Demand CurveShifts in Investment Demand (ID)Investment Demand
- 24. Double entry bookkeepingDebitCreditCurrent AccountCapital/financial AccountOfficial ReservesBalance of Payments
- 25. Self Correcting Balance of Trade$X M.:XnX M.:Xn$
- 26. Formulas:Spending MultiplierTax MultiplierHow does each multiplier affect GDP?Know page 115 from Activity 21Multipliers
- 27. DefineDraw curveWhy is it downward sloping?What makes AD shift?Aggregate Demand
- 28. DefineDraw curveExplain Short Run (SRAS)Explain Long Run (LRAS)What shifts SRAS?Aggregate Supply
- 29. Draw the model at equilibriumExplain and draw an economy in a recessionary gapExplain and draw an economy in an inflationary gapMost important model in economicsYOU MUST KNOW THIS!!!!AS/AD Model