Advanced Placement (AP) Macroeconomics (also known as AP Macro and AP Macroecon) is an Advanced Placement macroeconomics course for high school students that culminates in an exam offered by the College Board. Study begins with fundamental economic concepts such as scarcity, opportunity costs, production possibilities, specialization, comparative advantage, demand, supply, and price determination. Major topics include measurement of economic performance, national income and price determination, fiscal and monetary policy, and international economics and growth. AP Macroeconomics is frequently taught in conjunction with (and, in some cases, in the same year as) AP Microeconomics as part of a comprehensive AP Economics curriculum, although more students take the former. Topic outline Basic Economic Concepts (8–12%) Scarcity, choice, and opportunity costs Production possibilities curve Comparative advantage, absolute advantage, specialization, and exchange Demand, supply, and market equilibrium Macroeconomic issues: business cycle, unemployment, inflation, growth Measurement of Economic Performance (12–16%) National income accounts Circular flow Gross domestic product Components of gross domestic product Real versus nominal gross domestic product Inflation measurement and adjustment Price indices Nominal and real values Costs of inflation Unemployment Definition and measurement Types of unemployment Natural rate of unemployment National Income and Price Determination (10–15%) Aggregate demand Determinants of aggregate demand Multiplier and crowding-out effects Aggregate supply Short-run and long-run analyses Sticky versus flexible wages and prices Determinants of aggregate supply Macroeconomic Equilibrium Real output and price level Short and long run Actual versus full-employment output Economic fluctuations Financial Sector (15–20%) Financial sector: Money, banking, and financial markets Definition of financial assets: money, stocks, bonds Time value of money (present and future value) Measures of money supply Banks and creation of money Money demand Money market Loanable funds market Central bank and control of the money supply Tools of central bank policy Quantity theory of money Real versus nominal interest rates Inflation, Unemployment, and Stabilization Policies (20–30%) Fiscal and monetary policies Demand-side effects Supply-side effects Policy mix Government deficits and debt Inflation and unemployment Types of inflation Demand-pull inflation Cost-push inflation The Phillips curve: short run versus long run Role of expectations Economic Growth and Productivity (5–10%) Economic Growth and Productivity: Investment in human capital Investment in physical capital Research and development, and technological progress Growth policy Open Economy: International Trade and Finance (10–15%) Balance of payments accounts Balance of trade Current account Capital account Foreign exchange market Demand for and supply of foreign exchange Exchange rate determination Currency appreciation and