AP Macroeconomics — Summary Outline

I. Basic economic concepts

1. Scarcity: the nature of economic systems
2. Opportunity costs and production possibilities
3. Specialization and comparative advantage
4. The functions of any economic system (what, how, and for whom to produce)
5. Demand, supply, price determination

II. Measurement of economic performance

1. Gross national product, gross domestic product, and national income concepts
2. Inflation and price indices
3. Unemployment

III. National income and price determination

1. Aggregate supply
   1. Classical analysis
   2. Keynesian analysis
   3. Rational expectations
2. Aggregate demand
   1. Circular flow
   2. Components of aggregate demand
   3. Multiplier
   4. Fiscal policy
   5. Monetary policy
3. Money and banking 
   1. Definition of money and its creation
   2. Tools of central bank policy
4. Fiscal-monetary mix
   1. Interaction of fiscal and monetary policies
   2. Monetarist-Keynesian controversy
   3. Deficits
5. Trade-offs between inflation and unemployment
   1. Long run versus short run
   2. Supply shocks
   3. Role of expectations

IV. Economic Growth

V. International finance, exchange rates, and balance of payments