5 Steps to a 5: AP Macroeconomics 2021

by Eric R. Dodge

Overview

MATCHES THE LATEST EXAM!

In this hybrid year, let us supplement your AP classroom experience with this easy-to-follow study guide!

The immensely popular 5 Steps to a 5 AP Macroeconomics guide has been updated for the 2020-21 school year and now contains:

• 4 full-length practice exams (2 in the book and 2 online) that reflect the latest exam
• Up-to-Date Resources for COVID 19 Exam Disruption
• Access to a robust online platform
• Comprehensive overview of the AP Macroeconomics exam format
• Hundreds of practice exercises with thorough answer explanations
• Review material and proven strategies specific to each section of the test
• A self-guided study plan including flashcards, games, and more online

Product Details

ISBN-13:	9781260467024
Publisher:	McGraw-Hill Professional Publishing
Publication date:	10/01/2020
Pages:	256
Product dimensions:	8.40(w) x 10.60(h) x 0.60(d)

About the Author

Eric R. Dodge is a professor of economics and chair of the Department of Economics and Business Administration at Hanover College in Hanover, Indiana.

Table of Contents

Preface vii

Acknowledgments ix

Note for the Educators xi

About the Author xiii

Introduction: The Five-Step Program xv

Step 1 Set Up Your Study Program

1 What You Need to Know About the AP Macroeconomics Exam 3

Background Information 3

Frequently Asked Questions About the AP Economics Exams 4

2 How to Plan Your Time 11

Three Approaches to Preparing for AP Exams 11

Calendar for Each Plan 13

Step 2 Determine Your Test Readiness

3 Take the Diagnostic Exam 19

Diagnostic Exam: Answer Sheet 21

Diagnostic Exam: AP Macroeconomics 23

Step 3 Develop Strategies for Success

4 How to Approach Each Question Type 33

Section I Multiple-Choice Questions 33

Section II Free-Response Questions 36

Step 4 Review the Knowledge You Need to Score High

5 Fundamentals of Economic Analysis 41

5.1 Scarce Resources 42

5.2 Production Possibilities 45

5.3 Functions of Economic Systems 51

6 Demand, Supply, Market Equilibrium, and Welfare Analysis 55

6.1 Demand 55

6.2 Supply 61

6.3 Market Equilibrium 64

7 Macroeconomic Measures of Performance 72

7.1 The Circular Flow Model 73

7.2 Accounting for Output and Income 74

7.3 Inflation and the Consumer Price Index 80

7.4 Unemployment 85

8 Consumption, Saving, Investment, and the Multiplier 91

8.1 Consumption and Saving 92

8.2 Investment 95

8.3 The Multiplier Effect 98

9 Aggregate Demand, and Aggregate Supply 104

9.1 Aggregate Demand (AD) 104

9.2 Aggregate Supply (AS) 107

9.3 Macroeconomic Equilibrium 110

9.4 The Trade-Off Between Inflation and Unemployment 117

10 Fiscal Policy, Economic Growth, and Productivity 124

10.1 Expansionary and Contractionary Fiscal Policy 124

10.2 Difficulties of Fiscal Policy 128

10.3 Economic Growth and Productivity 132

11 Money, Banking, and Monetary Policy 139

11.1 Money and Financial Assets 139

11.2 Fractional Reserve Banking and Money Creation 145

11.3 Monetary Policy 148

12 International Trade 157

12.1 Comparative Advantage and Gains from Trade 157

12.2 Balance of Payments 161

12.3 Foreign Exchange Rates 163

12.4 Trade Barriers 166

Step 5 Build Your Test-Taking Confidence

AP Macroeconomics Practice Exam 1 173

AP Macroeconomics Practice Exam 2 193

Appendixes

Further Reading 213

Websites 215

Glossary 217

Important Formulas and Conditions 223