# AP Macroeconomics

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

Source:

### Basic Economic Concepts (5–10%)

* 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

### Economic Indicators and the Business Cycle (12–17%)

* National income accounts
** Circular flow
** Gross domestic product
** Components of gross domestic product
** Real versus nominal gross domestic product
* Unemployment
** Definition and measurement
** Types of unemployment
** Natural rate of unemployment
* Inflation measurement and adjustment
** Price indices
** Costs of inflation
** Nominal vs real values
* Business cycles
** Recession and expansion
** Output gap

### National Income and Price Determination (17–27%)

* 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
* Fiscal Policy
** Expansionary and contractionary
** Lag time
** Automatic stabilizers

### 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)
** Functions of money
** Measures of money supply
** Banks and creation of money
** Money demand
** Money market
** Loanable funds market
** Reserve market
* Central bank and control of the money supply
** Monetary policy
** Real versus nominal interest rates

### Long-Run Consequences of Stabilization Policies (20–30%)

* Fiscal and monetary policies
** Demand-side effects
** Supply-side effects
** Policy mix
** Government deficits and debt
** Crowding out
* Inflation and unemployment
** Quantity theory of money
** Types of inflation
** Demand-pull inflation
** Cost-push inflation
** The Phillips curve: short run versus long run
** Role of expectations
* 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 (10–13%)

* 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 depreciation
* Net exports and capital flows
* Links to financial and goods markets

## Exam
### Multiple Choice (2/3 of Score)

* 60 questions in 70 minutes
* Reflects topic outline above
* Example: 3-6 questions on economic growth

### Free Response (1/3 of Score)

* 3 questions in 60 minutes (with 10 minutes of recommended reading and planning time)

## Score distribution

The exam was first held in 1989, along with Microeconomics. Grade distributions since 2002 are as follows:
| Score | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| 5 | 14.4% | 13.5% | 13.0% | 14.3% | 12.7% | 14.1% | 14.9% | 15.7% | 14.4% | 13.1% | 13.9% | 14.6% | 16.1% | 15.2% | 17.4% | 17.4% | 19.7% | 19.1% | 19.7% | 18.0% | 16.4% | 17.1% | 16% |
| 4 | 27.7% | 23.8% | 25.0% | 28.9% | 23.4% | 24.4% | 22.7% | 25.2% | 25.6% | 24.0% | 23.9% | 23.2% | 23.2% | 22.2% | 23.4% | 23.3% | 22.6% | 23.0% | 25.0% | 19.6% | 20.0% | 22.9% | 21% |
| 3 | 18.4% | 19.2% | 17.6% | 15.9% | 17.4% | 16.4% | 15.2% | 15.8% | 15.2% | 16.7% | 18.0% | 16.6% | 18.5% | 17.1% | 16.1% | 16.9% | 16.2% | 16.9% | 18.5% | 13.7% | 15.4% | 24.7% | 25% |
| 2 | 22.7% | 25.8% | 26.0% | 16.9% | 21.0% | 17.2% | 19.8% | 16.2% | 16.6% | 18.2% | 17.8% | 19.1% | 17.5% | 17.0% | 17.0% | 15.8% | 16.8% | 14.9% | 16.2% | 15.7% | 15.1% | 21.6% | 23% |
| 1 | 16.8% | 17.8% | 18.4% | 24.0% | 25.4% | 27.9% | 27.5% | 27.1% | 28.1% | 28.0% | 26.3% | 26.6% | 24.7% | 28.4% | 26.0% | 26.6% | 24.7% | 26.2% | 20.5% | 32.9% | 33.1% | 13.7% | 15% |
| % of scores 3 or higher | 60.5% | 56.5% | 55.6% | 59.1% | 53.6% | 55.0% | 52.7% | 56.7% | 55.3% | 53.8% | 55.8% | 54.3% | 57.8% | 54.6% | 57.0% | 57.6% | 58.5% | 58.9% | 63.2% | 51.3% | 51.8% | 64.7% | 62% |
| Mean | 3.00 | 2.89 | 2.88 | 2.93 | 2.77 | 2.80 | 2.78 | 2.86 | 2.82 | 2.76 | 2.81 | 2.80 | 2.89 | 2.79 | 2.89 | 2.89 | 2.96 | 2.94 | 3.07 | 2.74 | 2.71 | 3.08 | 3.00 |
| Standard deviation | 1.32 | 1.32 | 1.32 | 1.41 | 1.38 | 1.43 | 1.44 | 1.45 | 1.45 | 1.42 | 1.41 | 1.42 | 1.42 | 1.45 | 1.46 | 1.46 | 1.47 | 1.48 | 1.42 | 1.52 | 1.50 | 1.29 | 1.30 |
| Number of Students | 32,184 | 38,177 | 41,265 | 41,265 | 52,599 | 60,116 | 68,009 | 73,817 | 83,146 | 90,134 | 99,903 | 108,219 | 117,209 | 126,267 | 134,638 | 141,649 | 146,673 | 146,091 | 122,639 | 124,436 | 134,413 | 164,505 | |

## Criticism

Tawni Ferrarini, James Gwartney, and John Morton have written that the examination does not adequately cover recent advances in the field: "The AP macroeconomics exam and resources largely reflect the simplistic Keynesian view from the 1960s and 1970s." The College Board updates the AP Macroeconomics curriculum with the guidance of college and high school economics instructors. The most recent update was published in 2022.