- Grand Prairie High School
- Overview
- AP Macroeconomics
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AP Macroeconomics Summer Assignment . (also available here as a pdf--AP Macroeconomics Summer Assignment )
Over the summer you will be required to complete a summer assignment in order to prepare for the AP Macroeconomics course. The assignment is as follows:
1. You will be required to read, Naked Economics: Undressing the Dismal Science, by Charles Wheelan. The book can be found at any local bookstore like Barnes & Noble or online at www.amazon.com
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You will have a 20 question quiz covering Naked Economics on the 1st day of school (20 points)
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Below is a study guide that is intended to help you in your reading.
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You will also be required to provide a 3-4 sentence explanation/definition for the 10 concepts below that are going to be fundamental to your understanding of AP Macroeconomics.
Key Macro Concepts
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Aggregate Demand
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Aggregate Supply
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Fiscal Policy
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Monetary Policy
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Open Market Operations
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Money Market
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Loanable Funds Market
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Phillips Curve
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Unemployment (include the 4 types)
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Inflation
“Naked Economics” Study Guide
The following reflects the major areas of Naked Economics from which questions will be taken. This is not intended as shortcut around reading the entire book, but rather is meant to help you concentrate your final preparation for the Naked Econ exam.
Chapter 1 - The Power of Markets
Market allocation
Assume rational utility-maximizers Opportunity costs
Profit max
Prices allocate resources
Barriers to entry
Market price, pricing decision & pricediscrimination Lessons of markets
Chapter 2 - Incentives Matter
Wrong incentives lead to undesirable outcomes
Principal-agent problem
Prisoner’s dilemma
Creative destruction
Tax and govt program disincentivesChapter 3 – Government and the Economy
Externalities
Government solutions to externalities Government makes market economypossible – rights, laws regulations Public goods
Redistribution
Chapter 4 – Government & the Economy II
Government inefficiency
Government allocation vs. private allocation Effects of regulation
Effects of taxation
SummaryChapter 5 – Economics of information
Adverse selection
Firm screening
Branding provides information Branding versus commodities Signaling mechanismsChapter 6 – Productivity and Human Capital
Human capital
Job creationEffects of human capital on standard of living Productivity
Income inequalityChapter 7 – Financial Markets
Purposes of financial instruments Efficient markets & index funds Investment guidelines
Chapter 8 – The power of Organized Interests
Interest groups & politicians’ incentives Some regulations benefit business Tyranny of the status quoChapter 11 – Trade and Globalization
Benefits of trade
Comparative advantage & specialization Losers from trade
Protectionism
Trade raises real income
Trade benefits for poor countries Cultural homogenization
Sweatshops -