Macroeconomics Study Guides

Keep the following two comprehensive study guides handy throughout your macroeconomics course study. They provide brief oulines for many of the major macroeconomics topics studied in this course and can help prepare you for your final economics exams.

AP Macroeconomics Study Guide

VII. AD/AS Graph

Aggregate Demand Shifters

These cause shifts in aggregate demand:

  1. C(consumer wealth, consumer expectations, household indebtedness, taxes)
  2. I (interest rates, expected returns on investment, business taxes, technology, degree of excess capacity)
  3. G
  4. X_n (National income abroad, exchange rates)

Aggregate Supply Shifters

These cause shifts in aggregate supply:

  1. Input Prices (domestic resource availability [land, labor, capital, entrepreneurial ability], prices of imported resources, market power)
  2. Productivity
  3. Legal - institutional environment (business taxes and subsidies, government regulation)

AS Curve ranges

Horizontal range - includes only real levels of output which are substantially less than full-employment output. A change in real output in this range won't affect price level at all.

Vertical range - economy has already reached its full-capacity real output. Any increase in the price level at this range won't affect real output at all.

Intermediate range - an expansion of real output is accompanied by a rising price level. The full-employment output is found in this range.