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AP Macroeconomics

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AP Macroeconomics covers economic indicators and the business cycle, national income and price determination, the financial sector, stabilisation policies, economic growth, and the open economy. It works at the level of a whole country rather than a single market.

Three model diagrams carry the course: AD–AS, the money market, and the loanable-funds market. Almost every free-response question moves between them, so knowing what shifts what, and in which order, is the core skill.

Chains of reasoning are graded. "Interest rates fall → investment rises → AD shifts right → real GDP and the price level rise" is the shape of a full-mark answer. Never skip a link.

The notes run unit by unit with the graphs drawn out — AD-AS, the money market, loanable funds — because most of the marks hang on them. Released FRQs are in the library, and the notes flag the places where a correctly labelled diagram earns the point by itself.

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Past Papers
  • 1

    Basic Economic Concepts

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    • 1.1 Scarcity
    • 1.2 Opportunity Cost and the Production Possibilities Curve (PPC)
    • 1.3 Comparative Advantage and Gains from Trade
    • 1.4 Demand
    • 1.5 Supply
    • 1.6 Market Equilibrium, Disequilibrium, and Changes in Equilibrium
    • 1.6 Exam tips
  • 2

    Economic Indicators and the Business Cycle

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    • 2.1 The Circular Flow and GDP
    • 2.2 Limitations of GDP
    • 2.3 Unemployment
    • 2.4 Price Indices and Inflation
    • 2.5 Costs of Inflation
    • 2.6 Real v. Nominal GDP
    • 2.7 Business Cycles
    • 2.3 2.4 2.5 2.6 2.7 Worked FRQ: Measuring the Economy
    • 2.3 2.4 2.5 2.6 2.7 Exam tips
  • 3

    National Income and Price Determination

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    • 3.1 Aggregate Demand
    • 3.2 The Spending and Tax Multipliers
    • 3.3 Short-Run Aggregate Supply
    • 3.4 Long-Run Aggregate Supply
    • 3.5 Equilibrium in the AD-AS Model
    • 3.6 Short-Run Changes: Demand and Supply Shocks
    • 3.7 Long-Run Self-Adjustment
    • 3.8 Fiscal Policy
    • 3.5 3.7 3.8 Worked FRQ: A Recession Step by Step
    • 3.9 Automatic Stabilizers
    • 3.9 Exam tips
  • 4

    Financial Sector

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    • 4.1 Financial Assets
    • 4.2 Nominal versus Real Interest Rates
    • 4.3 The Definition, Measurement, and Functions of Money
    • 4.4 Banking and the Expansion of the Money Supply
    • 4.5 The Money Market
    • 4.6 Monetary Policy
    • 4.7 The Loanable Funds Market
    • 4.7 Exam tips
  • 5

    Long-Run Consequences of Stabilization Policies

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    • 5.1 Fiscal and Monetary Policy in the Short Run
    • 5.2 The Phillips Curve
    • 5.3 Money Growth and Inflation
    • 5.4 Government Deficits and the National Debt
    • 5.5 Crowding Out
    • 5.6 Economic Growth
    • 5.7 Public Policy and Economic Growth
    • 5.2 Worked FRQ: The Phillips Curve
    • 5.2 Exam tips
  • 6

    Open Economy—International Trade and Finance

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    • 6.1 Balance of Payments Accounts
    • 6.2 Exchange Rates
    • 6.3 The Foreign Exchange Market
    • 6.4 Changes in Policies and Economic Conditions
    • 6.5 Exchange Rates and Net Exports
    • 6.6 Real Interest Rates and International Capital Flows
    • 6.4 6.5 6.6 Worked FRQ: Open-Economy Links
    • 6.4 6.5 6.6 Exam tips

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