ap-economics-course-description

52270 • 00003 • AP Economics Course Description 2009-10 • Indd.cs • mac • Century Old Style Std Bold/Regular/Italic, Helvetica Medium,ITC Century Book/Book Italic, Serifa Std 65 Bold/75 Black, Mathematical Pi 1 • Draft01 12/4/07 RI60435 • Draft02 1/4/08 RI60435 • Draft03 1/5/08 RI60435 • Draft03rev 2/8/08 RI60435 • Draft04 2/21/08 RI60435 • dr01revs 2/2/10 mc • dr01revs 2/3/10 mc • pdf 2/3/10 mc • dr02 2/17/10 mc • pdf 2/19/10 mc • pdf 3/15/10 mc • dr04 3/26/10 mc • RevsDrft04 3/29/10 jdb • pdf 4/5/10 mc • Preflight 4/13/10 jdb • dr01 062910 ljg • Preflight 06/30/10 ljg EcoNomIcs mIcroEcoNomIcs macroEcoNomIcs Course Description E f f e c t i v e F a l l 2 0 1 0 AP Course Descriptions are updated regularly. Please visit AP Central® (apcentral.collegeboard.com) to determine whether a more recent Course Description PDF is available. 52270 • 00003 • AP Economics Course Description 2009-10 • Indd.cs • mac • Century Old Style Std Bold/Regular/Italic, Helvetica Medium,ITC Century Book/Book Italic, Serifa Std 65 Bold/75 Black, Mathematical Pi 1 • Draft01 12/4/07 RI60435 • Draft02 1/4/08 RI60435 • Draft03 1/5/08 RI60435 • Draft03rev 2/8/08 RI60435 • Draft04 2/21/08 RI60435 • dr01revs 2/2/10 mc • dr01revs 2/3/10 mc • pdf 2/3/10 mc • dr02 2/17/10 mc • pdf 2/19/10 mc • pdf 3/15/10 mc • dr04 3/26/10 mc • RevsDrft04 3/29/10 jdb • pdf 4/5/10 mc • Preflight 4/13/10 jdb • dr01 062910 ljg • Preflight 06/30/10 ljg The College Board The College Board is a not-for-profi t membership association whose mission is to connect students to college success and opportunity. Founded in 1900, the College Board is composed of more than 5,700 schools, colleges, universities and other educational organizations. Each year, the College Board serves seven million students and their parents, 23,000 high schools, and 3,800 colleges through major programs and services in college readiness, college admission, guidance, assessment, fi nancial aid, and enrollment. Among its widely recognized programs are the SAT®, the PSAT/NMSQT®, the Advanced Placement Program® (AP®), SpringBoard® and ACCUPLACER®. The College Board is committed to the principles of excellence and equity, and that commitment is embodied in all of its programs, services, activities and concerns. For further information, visit www.collegeboard.com. The College Board and the Advanced Placement Program encourage teachers, AP Coordinators and school administrators to make equitable access a guiding principle for their AP programs. The College Board is committed to the principle that all students deserve an opportunity to participate in rigorous and academically challenging courses and programs. All students who are willing to accept the challenge of a rigorous academic curriculum should be considered for admission to AP courses. The Board encourages the elimination of barriers that restrict access to AP courses for students from ethnic, racial and socioeconomic groups that have been traditionally underrepresented in the AP Program. Schools should make every effort to ensure that their AP classes refl ect the diversity of their student population. © 2010 The College Board. College Board, ACCUPLACER, Advanced Placement Program, AP, AP Central, SAT, SpringBoard and the acorn logo are registered trademarks of the College Board. PSAT/NMSQT is a registered trademark of the College Board and National Merit Scholarship Corporation. All other products and services may be trademarks of their respective owners. Permission to use College Board materials may be requested online at: www.collegeboard.com/inquiry/cbpermit.html. 52270 • 82019 • AP Economics Course Description 2011,12 • Indd.cs4 • mac • Draft01 01/20/10 ljg • dr01revs 2/2/10 mc • dr01revs 2/3/10 mc • pdf 2/3/10 mc • pdf 2/19/10 mc • dr03 3/15/10 mc • pdf 3/15/10 mc • dr04 3/26/10 mc • RevsDrft04 3/29/10 jdb • pdf 4/5/10 mc • Preflight 4/13/10 jdb • 52270-84406 • dr01 062910 ljg • Preflight 06/30/10 ljg © 2010 The College Board. Visit the College Board on the Web: www.collegeboard.com. i contents Welcome to the AP Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 AP Course Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 AP Development Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 AP Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 AP Exam Scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Credit and Placement for AP Scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Setting Credit and Placement Policies for AP Scores . . . . . . . . . . . . . . . . . . . . . . . 3 AP Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The Courses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Teaching the Courses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 College Courses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The Exams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 AP Microeconomics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 I . Basic Economic Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 II . The Nature and Functions of Product Markets . . . . . . . . . . . . . . . . . . . . . 6 III . Factor Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 IV . Market Failure and the Role of Government . . . . . . . . . . . . . . . . . . . . . . . 8 Topic Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Sample Multiple-Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Answers to Multiple-Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Sample Free-Response Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 AP Macroeconomics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 I . Basic Economic Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 II . Measurement of Economic Performance . . . . . . . . . . . . . . . . . . . . . . . . . 22 III . National Income and Price Determination . . . . . . . . . . . . . . . . . . . . . . . . 23 IV . Financial Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 V . Inflation, Unemployment, and Stabilization Policies . . . . . . . . . . . . . . . . 24 VI . Economic Growth and Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 VII . Open Economy: International Trade and Finance . . . . . . . . . . . . . . . . . . 25 Topic Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Sample Multiple-Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Answers to Multiple-Choice Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Sample Free-Response Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Teacher Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 AP Central (apcentral .collegeboard .com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Additional Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Blank Page ii 52270 • 82019 • AP Economics Course Description 2011,12 • Indd.cs4 • mac • Draft01 01/20/10 ljg • dr01revs 2/2/10 mc • dr01revs 2/3/10 mc • pdf 2/3/10 mc • pdf 2/19/10 mc • dr03 3/15/10 mc • pdf 3/15/10 mc • dr04 3/26/10 mc • RevsDrft04 3/29/10 jdb • pdf 4/5/10 mc • Preflight 4/13/10 jdb • 52270-84406 • dr01 062910 ljg • Preflight 06/30/10 ljg 52270 • 82019 • AP Economics Course Description 2011,12 • Indd.cs4 • mac • Draft01 01/20/10 ljg • dr01revs 2/2/10 mc • dr01revs 2/3/10 mc • pdf 2/3/10 mc • pdf 2/19/10 mc • dr03 3/15/10 mc • pdf 3/15/10 mc • dr04 3/26/10 mc • RevsDrft04 3/29/10 jdb • pdf 4/5/10 mc • Preflight 4/13/10 jdb • 52270-84406 • dr01 062910 ljg • Preflight 06/30/10 ljg © 2010 The College Board. Visit the College Board on the Web: www.collegeboard.com. 11 Welcome to the AP ® Program AP® is a rigorous academic program built on the commitment, passion and hard work of students and educators from both secondary schools and higher education. With more than 30 courses in a wide variety of subject areas, AP provides willing and academically prepared high school students with the opportunity to study and learn at the college level. Through AP courses, talented and dedicated AP teachers help students develop and apply the skills, abilities and content knowledge they will need later in college. Each AP course is modeled upon a comparable college course, and college and university faculty play a vital role in ensuring that AP courses align with college-level standards. For example, through the AP Course Audit, AP teachers submit their syllabi for review and approval by college faculty. Only courses using syllabi that meet or exceed the college-level curricular and resource requirements for each AP course are authorized to carry the “AP” label. AP courses culminate in a suite of college-level assessments developed and scored by college and university faculty members as well as experienced AP teachers. AP Exams are an essential part of the AP experience, enabling students to demonstrate their mastery of college-level course work. Strong performance on AP Exams is rewarded by colleges and universities worldwide. More than 90 percent of four-year colleges and universities in the United States grant students credit, placement or both on the basis of successful AP Exam scores. But performing well on an AP Exam means more than just the successful completion of a course; it is the gateway to success in college. Research consistently shows that students who score a 3 or higher typically experience greater academic success in college and improved graduation rates than their non-AP student peers. AP Course Audit The intent of the AP Course Audit is to provide secondary and higher education constituents with the assurance that an “AP” designation on a student’s transcript is credible, meaning the AP Program has authorized a course that has met or exceeded the curricular requirements and classroom resources that demonstrate the academic rigor of a comparable college course. To receive authorization from the College Board to label a course “AP,” teachers must participate in the AP Course Audit. Courses authorized to use the “AP” designation are listed in the AP Course Ledger made available to colleges and universities each fall. It is the school’s responsibility to ensure that its AP Course Ledger entry accurately refl ects the AP courses offered within each academic year. The AP Program unequivocally supports the principle that each individual school must develop its own curriculum for courses labeled “AP.” Rather than mandating any one curriculum for AP courses, the AP Course Audit instead provides each AP teacher with a set of expectations that college and secondary school faculty nationwide have established for college-level courses. AP teachers are encouraged to develop or maintain their own curriculum that either includes or exceeds each of these expectations; such courses will be authorized to use the “AP” designation. Credit for the success of AP courses belongs to the individual schools and teachers that create powerful, locally designed AP curricula. 52270 • 82019 • AP Economics Course Description 2011,12 • Indd.cs4 • mac • Draft01 01/20/10 ljg • dr01revs 2/2/10 mc • dr01revs 2/3/10 mc • pdf 2/3/10 mc • pdf 2/19/10 mc • dr03 3/15/10 mc • pdf 3/15/10 mc • dr04 3/26/10 mc • RevsDrft04 3/29/10 jdb • pdf 4/5/10 mc • Preflight 4/13/10 jdb • 52270-84406 • dr01 062910 ljg • Preflight 06/30/10 ljg © 2010 The College Board. Visit the College Board on the Web: www.collegeboard.com.22 Complete information about the AP Course Audit is available at www.collegeboard .com/apcourseaudit. AP Development Committees An AP Development Committee is a group of nationally renowned subject-matter experts in a particular discipline that includes professionals in secondary and postsecondary education as well as from professional organizations. These experts ensure that AP courses and exams refl ect the most up-to-date information available, as befi tting a college-level course, and that student profi ciency is assessed properly. To fi nd a list of current AP Development Committee members, please visit: apcentral.collegeboard.com/developmentcommittees. AP Reading AP Exams — with the exception of AP Studio Art, which is a portfolio assessment — consist of dozens of multiple-choice questions scored by machine, and free-response questions scored at the annual AP Reading by thousands of college faculty and expert AP teachers. AP Readers use scoring standards developed by college and university faculty who teach the corresponding college course. The AP Reading offers educators both signifi cant professional development and the opportunity to network with colleagues. For more information about the AP Reading, or to apply to serve as a Reader, visit apcentral.collegeboard.com/readers. AP Exam Scores The Readers’ scores on the free-response questions are combined with the results of the computer-scored multiple-choice questions; the weighted raw scores are summed to give a composite score. The composite score is then converted to a score on AP’s 5-point scale. While colleges and universities are responsible for setting their own credit and placement policies, AP scores signify how qualifi ed students are to receive college credit or placement: AP SCORE QUALIFICATION 5 Extremely well qualifi ed 4 Well qualifi ed 3 Qualifi ed 2 Possibly qualifi ed 1 No recommendation AP Exam scores of 5 are equivalent to A grades in the corresponding college course. AP Exam scores of 4 are equivalent to grades of A–, B+ and B in college. AP Exam scores of 3 are equivalent to grades of B–, C+ and C in college. Credit and Placement for AP Scores Thousands of two- and four-year colleges and universities grant credit, placement or both for qualifying AP Exam scores because these scores represent a level of 52270 • 82019 • AP Economics Course Description 2011,12 • Indd.cs4 • mac • Draft01 01/20/10 ljg • dr01revs 2/2/10 mc • dr01revs 2/3/10 mc • pdf 2/3/10 mc • pdf 2/19/10 mc • dr03 3/15/10 mc • pdf 3/15/10 mc • dr04 3/26/10 mc • RevsDrft04 3/29/10 jdb • pdf 4/5/10 mc • Preflight 4/13/10 jdb • 52270-84406 • dr01 062910 ljg • Preflight 06/30/10 ljg © 2010 The College Board. Visit the College Board on the Web: www.collegeboard.com. 33 achievement equivalent to that of students who have taken the comparable college course. This college-level equivalency is ensured through several AP Program processes: • College faculty are involved in course and exam development and other AP activities. Currently, college faculty: • Serve as chairs and members of the committees that develop the Course Descriptions and exams for each AP course. • Are responsible for standard setting and are involved in the evaluation of student responses at the annual AP Reading. The Chief Reader for each AP exam is a college faculty member. • Lead professional development seminars for new and experienced AP teachers. • Serve as the senior reviewers in the annual AP Course Audit, ensuring AP teachers’ syllabi meet the curriculum guidelines for college-level courses. • AP courses and exams are reviewed and updated regularly based on the results of curriculum surveys at up to 200 colleges and universities, collaborations among the College Board and key educational and disciplinary organizations, and the interactions of committee members with professional organizations in their discipline. • Periodic college comparability studies are undertaken in which the performance of college students on a selection of AP Exam questions is compared with that of AP students to ensure that grades earned by college students are aligned with scores AP students earn on the exam. For more information about the role of colleges and universities in the AP Program, visit the Value of AP to Colleges and Universities section of the College Board website at http://professionals.collegeboard.com/higher-ed/placement/ap. Setting Credit and Placement Policies for AP Scores The College Board website for education professionals has a section specifi cally for colleges and universities that provides guidance in setting AP credit and placement policies. Visit http://professionals.collegeboard.com/higher-ed/placement/ap/policy. Additional resources, including links to AP research studies, released exam questions and sample student responses at varying levels of achievement for each AP Exam are also available. To view student samples and scoring guidelines, visit http://apcentral