Key Takeaways
Lesson Description
Key Takeaways
• Scarcity requires societies to make economic choices.
• GDP, inflation, and unemployment measure economic performance.
• Aggregate Demand and Aggregate Supply determine output and price level.
• The Federal Reserve stabilizes the economy through monetary policy.
• Governments influence the economy using fiscal policy.
• International trade increases efficiency through specialization and comparative advantage.
• Exchange rates affect trade and capital flows.
Must Know Equations
GDP = C + I + G + (X − M)
Unemployment Rate = (Unemployed ÷ Labor Force) × 100%
Inflation Rate = [(Current CPI − Previous CPI) ÷ Previous CPI] × 100%
Money Multiplier = 1 ÷ Reserve Requirement
Must Know Graphs
Production Possibilities Curve (PPC)
Aggregate Demand–Aggregate Supply (AD-AS)
Money Market
Loanable Funds Market
Phillips Curve
Foreign Exchange Market
Must Know Vocabulary
Scarcity
Opportunity Cost
Comparative Advantage
GDP
Inflation
Unemployment
Aggregate Demand
Aggregate Supply
Money Supply
Federal Reserve
Fiscal Policy
Monetary Policy
Phillips Curve
Exchange Rate
Appreciation
Depreciation
AP Exam Focus
• Draw and correctly label every required macroeconomic graph.
• Explain graph shifts using economic events.
• Calculate GDP, inflation, unemployment, and the money multiplier.
• Determine appropriate fiscal and monetary policies.
• Analyze the effects of international trade and exchange rates.