| 18 Week Class lesson Plan Class : AP Economics Course Number: 2102370 Credit: 1
Units of Study and goals: General overview and content. The purpose of this course is to provide the student with a broad overview of the study of Economics, both Microeconomics and Macroeconomics. AP Economics is a 18 week course of instruction, the course will be content driven with a good deal of thought and theory. The ultimate goal is a successful score on the AP Exam at the end of the instruction period. To this end the student should have a well defined understanding of how economics effects them in their everyday life and what their responsibilities are as citizens and consumers. The content will include but not be limited to
· Introduction to Economics a. What is Economics b. Economic Systems c. American Free enterprise system d. Capitalism e. Demand and Supply f. Determining Prices
· Microeconomics: a. Demand b. Supply c. Determining Prices d. Market structures
· Stock Market, Futures, options, bonds.
· Business, Markets, and Economic decisions., Labor a. Business Decision: Costs, Revenues, Profits b. Competition/Markets c. Employment and Wages d. Government and Business e. Fiscal Policy
· Money, banking and finance a. Sources of Capital b. Money, Banking and the Government c. The Federal Reserve System d. Taxes, National Debt, and Fiscal Policy e. Government Regulation of Economic Activity
· International Economic Relations a. Comparing Economic System b. Developing nations c. International Trade
To this end the course will be structured in 4 week blocks that coincide with the AP Government and Politics course.
Materials used: Textbook, overhead projector, transparencies, movies, tapes and guest speakers. Book:
Economics, McConnell Brue, McGraw-Hill Fifteenth edition.
Methods of performance measurement:
Specific Activities by Week: (see daily plans for specifics) Section One: Weeks 1-4 1st Week
Chapters 1 & 2 Introduction to economics Pages 3-22 The purpose of this section is to introduce the basic terminology and concepts of economics. Students are encouraged to consider what markets and governments can and cannot do. This section of the syllabus gives them an early opportunity to begin to explain economic phenomena through the use of diagrams, data analysis and the evaluation of economic material. This section is intended to make students aware of the role of economics in real-world situations. Even at this initial stage students should consider the application of economic theories to developing countries, since development economics is integral to the course.
Objectives
• Definitions of social science and economics • Definitions of microeconomics and macroeconomics • Definitions of growth, development, and sustainable development • Positive and normative concepts • Ceteris paribus • Scarcity • factors of production: land, labor, capital and management/entrepreneurship • payments to factors of production: rent, wages, interest, profit • Choice • utility: basic definition • opportunity cost • free and economic goods • production possibility curves: definition • diagrams showing opportunity cost, actual and potential output • diagrams showing economic growth and economic development • Rationing systems • basic economic questions • what to produce? • how to produce? • for whom to produce? • mixed economies • public • private • central planning versus free market • economies in transition.
2nd week Chapters 3 & 4 pages 22-40 The purpose of this section is to identify and explain the importance of markets and the role played by demand and supply. The roles played by consumers, producers and the government in different market structures are highlighted. The failures of a market system are identified and possible solutions are examined. The concepts learned here have links with other areas of the economics syllabus; for example, elasticity has many applications in different areas of international trade and development.
Objectives
Individual Markets Demand and Supply (Chapter 3) • Definition of markets with relevant local, national and international examples • Brief descriptions of perfect competition, monopoly and oligopoly as different types of market structures, and monopolistic competition, using the characteristics of the number of buyers and sellers, type of product and barriers to entry • Importance of price as a signal and as an incentive in terms of resource allocation Demand • Definition of demand • Law of demand with diagrammatic analysis • Determinants of demand • Fundamental distinction between a movement along a demand curve and a shift of the demand curve
Higher level extension topic • Exceptions to the law of demand (the upward-sloping demand curve) • ostentatious (Veblen) goods • role of expectations • Giffen goods
Supply • Definition of supply • Law of supply with diagrammatic analysis • Determinants of supply • Effect of taxes and subsidies on supply • Fundamental distinction between a movement along a supply curve and a shift of the supply curve
Interaction of demand and supply • Equilibrium market clearing price and quantity • Diagrammatic analysis of changes in demand and supply to show the adjustment to a new equilibrium
The Market system chapter 4 Price controls • Maximum price: causes and consequences • Minimum price: causes and consequences • Price support/buffer stock schemes • Commodity agreements
3rd week Chapters 5 & 6 pages 73-93 The U.S. Economy, Public and Private Chapter 5
The U.S. in the Global Economy Chapter 6
Objectives
Free trade and protectionism Definition of free trade Types of protectionism • Tariffs • Quotas • Subsidies • Voluntary Export Restraints (VERs) • Administrative obstacles • Health and safety standards • Environmental standards
Arguments for protectionism • Infant industry argument • Efforts of a developing country to diversify • Protection of employment • Source of government revenue • Strategic arguments • Means to overcome a balance of payments disequilibrium • Anti-dumping • Free trade areas (FTAs) • Customs unions • Common markets • Trade creation and trade diversion • Obstacles to achieving integration • reluctance to surrender political sovereignty
4th week Chapters 37, 38 & 39 pages 730-773 International Economics and the World ‘s Economy The purpose of this section is to encourage students to understand why countries trade, the problems involved and how these problems are addressed. Students need to understand how exchange rates affect international trade. The international trade theory introduced in this section should be related to real-world examples.
Objectives
Reasons for trade • Differences in factor endowments • Variety and quality of goods • Gains from specialization • Political • Absolute and comparative advantage (numerical and diagrammatic representations) • opportunity cost • limitations of the theory of comparative advantage Economic integration Trading blocs • Free trade areas (FTAs) • Customs unions • Common markets • Trade creation and trade diversion • Obstacles to achieving integration • reluctance to surrender political sovereignty • reluctance to surrender economic sovereignty World Trade Organization (WTO) • Aims • Success and failure viewed from different perspectives Balance of payments • Current account • balance of trade • invisible balance • Capital account Exchange rates • Fixed exchange rates • Floating exchange rates • Managed exchange rates • Distinction between • depreciation and devaluation • appreciation and revaluation • Effects on exchange rates of • trade flow • capital flows/interest rate changes • inflation • speculation • use of foreign currency reserves • Relative advantages and disadvantages of fixed and floating rates • Advantages and disadvantages of single currencies/monetary integration • Purchasing power parity theory (PPP) Balance of payment problems • Consequences of a current account deficit or surplus • Methods of correction • managed changes in exchange rates • reduction in aggregate demand/expenditure-reducing policies • change in supply-side policies to increase competitiveness • protectionism/expenditure-switching policies • Consequences of a capital account deficit or surplus • Marshall-Lerner condition • J-curve Terms of trade • Definition of terms of trade • Consequences of a change in the terms of trade for a country's balance of payments and domestic economy • The significance of deteriorating terms of trade for developing countries • Measurement of terms of trade • Causes of changes in a country's terms of trade in the short-run and long-run • Elasticity of demand for imports and exports.
SECTION TWO: Weeks 5-8
5th Week Chapter 7 Measuring Domestic Output, National Income and Price level pages 116-135 Chapter 8 Introduction to Economic Growth and Instability pages 136-157 Objectives
The purpose of this section is to provide students with the opportunity for a detailed examination of the major macroeconomic issues facing countries' economic growth, economic development, unemployment, inflation and income distribution. Measuring national income • Circular flow of income • Methods of measurement—income, expenditure and output • Distinction between: • gross and net • national and domestic • nominal and real • total and per capita Introduction to development • Definitions of economic growth and economic development • Differences in the definitions of the two concepts • Gross Domestic Product (GDP) versus Gross National Product (GNP) as measures of growth • Limitations of using GDP as a measure to compare welfare between countries • Allowance for differences in purchasing power when comparing welfare between countries • Alternative methods of measurement • Problems of measuring development Unemployment and inflation Unemployment • Full employment and underemployment • Unemployment rate • Costs of unemployment • Types of unemployment • structural • frictional • seasonal • cyclical/demand-deficient • real wage • Measures to deal with unemployment • Definitions of inflation and deflation • Costs of inflation and deflation • Causes of inflation • cost push • demand pull • excess monetary growth • Methods of measuring inflation • Problems of the methods of measuring inflation • Phillips curve • short-run • long-run • Natural rate of unemployment • Non-Accelerating Inflation Rate of Unemployment (NAIRU)
6th week Objectives
Chapter 9 Building the Aggregate Expenditures model 1. What determines the level of GDP and 2. What causes real GDP to rise in one period and fall in another
• Shifts in the aggregate demand curve/demand-side policies • fiscal policy • interest rates as a tool of monetary policy • Shifts in the aggregate supply curve/supply-side policies • Strengths and weaknesses of these policies
Chapter 10 Aggregate Expenditures: 1. How does the equilibrium real GDP fluctuate. • Multiplier effect • calculation of multiplier • Accelerator • “Crowding out”
7th week
Chapter 11 Aggregate Demand and Aggregate Supply Chapter 12 Fiscal Policy
Objectives
Aggregate Demand and Aggregate Supply • Aggregate demand—components • Aggregate supply • short-run • long-run (Keynesian versus neo-classical approach) • Full employment level of national income • Equilibrium level of national income • Inflationary gap • Deflationary gap • Diagram illustrating trade/business cycle Demand-side and supply-side policies • Shifts in the aggregate demand curve/demand-side policies • fiscal policy • interest rates as a tool of monetary policy • Shifts in the aggregate supply curve/supply-side policies • Strengths and weaknesses of these policies
8th week Chapter 13 Money and Banking Chapter 14 How Banks Create money Chapter 15 Monetary Policy
Objectives
SECTION Three: Weeks 9-12
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