5 Steps to a 5™: AP Macroeconomics 2017

CONTENTS

Acknowledgments

Introduction: The Five-Step Program

STEP 1 Set Up Your Study Program

1 What You Need to Know About the AP Macroeconomics Exam

2 How to Plan Your Time

STEP 2 Determine Your Test Readiness

3 Take the Diagnostic Exam

Diagnostic Exam: AP Macroeconomics

STEP 3 Develop Strategies for Success

4 How to Approach Each Question Type

Section I: Multiple-Choice Questions

Section II: Free-Response Questions

STEP 4 Review the Knowledge You Need to Score High

5 Fundamentals of Economic Analysis

5.1 Scarce Resources

5.2 Production Possibilities

5.3 Functions of Economic Systems

6 Demand, Supply, Market Equilibrium, and Welfare Analysis

6.3 Market Equilibrium

6.4 Welfare Analysis

7 Macroeconomic Measures of Performance

7.1 The Circular Flow Model

7.2 Accounting for Output and Income

7.3 Inflation and the Consumer Price Index

7.4 Unemployment

8 Consumption, Saving, Investment, and the Multiplier

8.1 Consumption and Saving

8.3 The Multiplier Effect

9 Aggregate Demand and Aggregate Supply

9.1 Aggregate Demand (AD)

9.2 Aggregate Supply (AS)

9.3 Macroeconomic Equilibrium

9.4 The Trade-Off Between Inflation and Unemployment

10 Fiscal Policy, Economic Growth, and Productivity

10.1 Expansionary and Contractionary Fiscal Policy

10.2 Difficulties of Fiscal Policy

10.3 Economic Growth and Productivity

11 Money, Banking, and Monetary Policy

11.1 Money and Financial Assets

11.2 Fractional Reserve Banking and Money Creation

11.3 Monetary Policy

12 International Trade

12.1 Comparative Advantage and Gains from Trade

12.2 Balance of Payments

12.3 Foreign Exchange Rates

12.4 Trade Barriers

STEP 5 Build Your Test-Taking Confidence

AP Macroeconomics Practice Exam 1

AP Macroeconomics Practice Exam 2

Further Reading

Important Formulas and Conditions