AP Macroeconomics case studies
AP Macroeconomics · Put your knowledge to work in context.
AP Macroeconomics is a College Board Advanced Placement course and exam that assesses how well students understand economy-wide principles: economic models and definitions, the causes of given economic outcomes, the results of specific economic situations, and the graphical representation of economic relationships. It is intended for high school students who have completed the AP Macroeconomics course and want college-level recognition; colleges may award credit or placement based on the score. The exam is hybrid digital: multiple-choice questions and the free-response prompts are delivered in the Bluebook app, while free-response answers are handwritten in paper booklets that are returned for scoring. A four-function calculator is permitted on both sections. The AP Macroeconomics case studies are 5 cases and about 2,754 words.
1The Output Gap and the Self-Correcting Economy
Econlandia has a potential GDP of 800 billion and is currently producing 740 billion. The unemployment rate is 7.5%, while the natural rate is 5%.
552 words, about 3 min2Money Creation When Banks Hold Excess Reserves
A banking system has 500 million in total reserves and 2,000 million in checkable deposits. The required reserve ratio is 10%.
467 words, about 2 min3Tariffs, Exchange Rates, and the Trade Balance
Nation A imposes a 25% tariff on imported steel. Before the tariff, it imported 10 million tons at a world price of 500/ton.
562 words, about 3 min4The Phillips Curve and a Supply Shock
An economy has been at its natural rate of unemployment (5%) with inflation of 2% for several years, and inflation expectations are firmly anchored at 2%. Then a sharp energy price increase pushes actual inflation to 6%.
569 words, about 3 min5Comparative Advantage with Opportunity Costs
Two countries, North and South, each produce only two goods: wheat and cloth. In one year, North can produce either 100 units of wheat or 50 units of cloth (or any linear combination).
604 words, about 3 min