5 Steps to a 5 AP Macroeconomics 2019

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CONTENTS

Preface vii

Acknowledgments ix

About the Author xi

Introduction: The Five-Step Program xiii

STEP 1 Set Up Your Study Program

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

2 How to Plan Your Time 12

STEP 2 Determine Your Test Readiness

3 Take the Diagnostic Exam 19

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

6.4 Welfare Analysis 69

7 Macroeconomic Measures of Performance 74

7.1 The Circular Flow Model 75

7.2 Accounting for Output and Income 76

7.3 Inflation and the Consumer Price Index 82

7.4 Unemployment 86

8 Consumption, Saving, Investment, and the Multiplier 92

8.1 Consumption and Saving 93

8.2 Investment 96

8.3 The Multiplier Effect 99

9 Aggregate Demand and Aggregate Supply 106

9.1 Aggregate Demand (AD) 106

9.2 Aggregate Supply (AS) 109

9.3 Macroeconomic Equilibrium 112

9.4 The Trade-Off Between Inflation and Unemployment 119

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