AP Economics Syllabus - Port Washington Schools

Mr. Medico
Social Studies Department
Paul D. Schreiber High School
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Table of Contents
Abstract & Rationale………………………………………………………………………3
Objectives & Standards……………………………………………………………………4
Content…………………………………………………………………………………….8
Macroeconomics…8
Microeconomics…10
Assessment……………………………………………………………………….............12
Course Materials………………………………………………………………………....13
Recommended Resources……………………………..…………………………………14
Assignments……………….……………………………………………………….…….15
Tentative Unit Calendar………………………………………………………………….19
Calvin and Hobbes by Bill Watterson
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Abstract:
The yearlong Advanced Placement Economics program offers two separate
courses in economics: one in macroeconomics and one in microeconomics. Each
course presumes one semester of college-level preparation.
In addition to providing college credit, the AP Economics program will prepare
you for college by providing two academically rigorous semester courses. This
program identifies and attracts academically superior students and increases
enrollment in advanced classes. Participation in the AP Economics program also
increases your motivation, self-confidence, and academic orientation.
The purpose of this guide is to serve as a model or a recipe for a successful course
in Advanced Placement Economics. This curriculum guide provides an overview
of the objectives, state and national learning standards, content area, course
materials, assessment, assignments, and unit calendar.
Calvin and Hobbes by Bill Watterson
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Objectives:
The purpose of a course in Advanced Placement Macroeconomics is to give
students a thorough understanding of the principles that apply to an economic
system as a whole.
The purpose of a course in Advanced Placement Microeconomics is to provide
students a thorough understanding of the principles that apply to the individual
units of an economic system.
The National Council on Economic Education outlined the principles of
economics in 1983. These six principles behind economic reasoning are
sometimes referred to as “The Handy Dandy Guide.” You will apply these
principles to your journey in economic literacy.
1. People economize
2. All choices involve cost
3. People respond to incentives
4. Economic systems influence individual choices
5. Voluntary trade creates wealth
6. The consequences of choices lie in the future
In 1996 the National Council on Economic Education listed a total of nine
principles of economic reasoning – which include several variations of the
original six principles.
1. Everything has a cost
2. People choose for good reasons
3. Incentives matter
4. People create economic systems to influence choices and
incentives
5. People gain from voluntary trade
6. Economic thinking is marginal thinking
7. The price of a good or service is affected by people’s
choices
8. Economic actions create secondary effects
9. The test of a theory is its ability to predict
The Advanced Economics Program will use these principles to meet and exceed
the National and New York State Learning Standards for economic education.
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Standard 1: Scarcity – Students will understand that productive resources
are limited. Therefore, people can not have all the goods and services they
want; as a result, they must choose some things and give up others.
Standard 2: Marginal Cost/Benefit – Effective decision-making requires
comparing the additional costs of alternatives with the additional benefits.
Most choices involve doing a little more or a little less of something: few
choices are “all or nothing” decisions.
Standard 3: Allocation of Goods and Services – Different methods can be
used to allocate goods and services. People acting individually or
collectively through government, must choose which methods to use to
allocate different kinds of goods and services.
Standard 4: Role of Incentives – People respond predictably to positive
and negative incentives.
Standard 5: Gain from Trade – Voluntary exchange occurs only when all
participating parties expect to gain. This is true for trade among
individuals or organizations within a nation, and among individuals or
organizations in different nations.
Standard 6: Specialization and Trade – When individuals, regions, and
nations specialize in what they can produce at the lowest cost and then
trade with others, both production and consumption increase.
Standard 7: Markets-Price and Quantity Determination – Markets exist
when buyers and sellers interact. This interaction determines market
prices and thereby allocates scarce goods and services.
Standard 8: Role of Price in Market System – Prices send signals and
provide incentives to buyers and sellers. When supply or demand
changes, market prices adjust, affecting incentives.
Standard 9: Role of Competition – Competition among sellers lowers
costs and prices, and encourages producers to produce more of what
consumers are willing and able to buy. Competition among buyers
increases prices and allocates goods and services to those who are willing
and able to pay the most for them.
Standard 10: Role of Economic Institutions – Institutions evolve in
market economies to help individuals and groups accomplish their goals.
Banks, labor unions, corporations, legal systems, and not-for-profit
organizations are examples of important institutions. A different kind of
institution, clearly defined and enforced property right, is essential to a
market economy.
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Standard 11: Role of Money – Money makes it easier to trade, borrow,
save, invest, and compare the value of goods and services.
Standard 12: Role of Interest Rates – Interest rates, adjusted for inflation,
rise and fall to balance the amount saved with the amount borrowed,
which affects the allocation of scarce resources between present and future
uses.
Standard 13: Role of Resources in Determining Income – Income for
most people is determined by the market value of the productive resources
they sell. What workers earn depends, primarily, on the market value of
what they produce and how productive they are.
Standard 14: Profit and the Entrepreneur – Entrepreneurs are people who
take the risks of organizing productive resources to make goods and
services. Profit is an important incentive that leads entrepreneurs to accept
the risks of business failures.
Standard 15: Growth – Investment in factories, machinery, new
technology, and in the health, education, and training of people can raise
future standards of living.
Standard 16: Role of Government – There is an economic role for
government in a market economy whenever the benefits of a government
policy outweigh its costs. Governments often provide for national
defense, address environmental concerns, define and protect property
rights, and attempt to make markets more competitive. Most government
policies also redistribute income.
Standard 17: Using Cost/Benefit Analysis to Evaluate Government
Programs – Costs of government policies sometimes exceed benefits.
This may occur because of incentives facing voters, government officials,
and government employees, because of actions by special interest groups
that can impose costs on the general public, or because social goals other
than economic efficiency are being pursued.
Standard 18: Macroeconomy-Income/Employment, Prices – A nation’s
overall levels of income, employment, and prices are determined by the
interaction of spending and production decisions made by all households,
firms, government agencies, and others in the economy.
Standard 19: Unemployment and Inflation – Unemployment imposes
costs on individuals and nations. Unexpected inflation imposes costs on
many people and benefits some others because it arbitrarily redistributes
purchasing power. Inflation can reduce the rate of growth of national
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living standards because individuals and organizations use resources to
protect themselves against the uncertainty of future prices.
Standard 20: Monetary and Fiscal Policy – Federal government budgetary
policy and the Federal Reserve System’s monetary policy influences the
overall levels of employment, output, and prices.
*Note* The above National Standards have been incorporated by the New York
State Education Department as voluntary standards – Economics is New York
State Social Studies Learning Standard 4.
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Content:
Fall Semester
Macroeconomics – This is a summary outline of the major content areas
covered by the AP exam. The percentages represent the approximate
percentage devoted to that particular area on the multiple-choice portion of
the exam. This is basically the outline that can be found in College Board
publications.
Unit 1 Basic Economic Concepts………………..………………(8-12%)
a. Scarcity, choice, and opportunity costs
b. Production possibilities curve
c. Comparative advantage, specialization, and exchange
d. Demand, supply, and market equilibrium
e. Macroeconomic issues: business cycle, unemployment,
inflation, growth
Unit 2 Measurement of Economic Performance………….....(12-16%)
a. National income accounts
i. Circular flow
ii. Gross domestic product
iii. Components of GDP
iv. Real GDP versus nominal GDP
b. Inflation measurement and adjustment
i. Price indices
ii. Nominal and real values
iii. Costs of inflation
c. Unemployment
i. Definition and measurement
ii. Types of unemployment
iii. Natural rate of unemployment
Unit 3 National Income and Price Determination…………..(10-15%)
a. Aggregate demand
i. Determinants of aggregate demand
ii. Multiplier and crowding out effects
b. Aggregate supply
i. Short-run and long-run analysis
ii. Sticky versus flexible wages and prices
iii. Determinants of aggregate supply
c. Macroeconomic equilibrium
i. Real output and price level
ii. Short and long run
iii. Actual versus full-employment output
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iv.
Economic fluctuations
Unit 4 Financial Sector……………………..…………………..(15-20%)
a. Money, banking, and financial markets
i. Definition of financial assets: money, stocks, bonds
ii. Time value of money (present and future value)
iii. Measures of money supply
iv. Banks and creation of money
v. Money demand
vi. Money market
vii. Loanable funds market
b. Central bank and control of the money supply
i. Tools of central bank policy
ii. Quantity theory of money
iii. Real versus nominal interest rates
Unit 5 Inflation, Unemployment, and Stabilization Policies…(20-30%)
a. Fiscal and monetary policies
i. Demand-side effects
ii. Supply-side effects
iii. Policy mix
iv. Government deficits and debt
b. Inflation and unemployment
i. Types of inflation
- Demand-pull inflation
- Cost-push inflation
ii. Phillips curve – short run versus long run
iii. Role of expectations
Unit 6 Economic Growth and Productivity…………….………(5-10%)
a. Investment in human capital
b. Investment in physical capital
c. Research and development, and technological progress
d. Growth policy
Unit 7 Open Economy: International Trade and Finance…...(10-15%)
a. Balance of payments accounts
i. Balance of trade
ii. Current account
iii. Capital account
b. Foreign exchange market
i. Demand for and supply of foreign exchange
ii. Exchange rate determination
iii. Currency appreciation and depreciation
c. Net exports and capital flows
d. Links to financial and goods markets
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Spring Semester
Microeconomics : This is a summary outline of the major concepts
covered by the AP Microeconomics exam. Note that Unit 1 Basic
Economic Concepts are very similar in both the Macroeconomics and
Microeconomics portions of the program. A brief review of Unit 1 will be
given during the beginning of the Spring Semester. The most
concentrated section of Microeconomics will begin with Unit 2 The
Nature and Functions of Product Markets, which will review and extend
the analysis of supply and demand.
Unit 1 Basic Economic Concepts………………………………..(8-14%)
a. Review of Scarcity, choice, and opportunity cost
b. Review of Production possibilities curve
c. Review of Comparative advantage, specialization, and trade
d. Economic systems
e. Property rights and the role of incentives
f. Marginal analysis
Unit 2 The Nature and Functions of Product Markets......…..(50-70%)
a. Supply and demand (15-20%)
i. Market equilibrium
ii. Determinants of supply and demand
iii. Price and quantity controls
iv. Elasticity
- Price, income, and cross-price elasticities of
demand
- Price elasticity of supply
v. Consumer surplus
vi. Tax incidence and deadweight loss
b. Theory of consumer choice (5-10%)
i. Total utility and marginal utility
ii. Utility maximization: equalizing marginal utility per
dollar
iii. Individual and market demand curves
iv. Income and substitution effects
c. Production and costs (10-15%)
i. Production functions: short and long run
ii. Marginal product and diminishing returns
iii. Short-run costs
iv. Long-run costs and economies of scale
v. Cost minimizing input combination
d. Firm behavior and market structure (25-35%)
i. Profit
- Accounting versus economic profits
- Normal profit
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- Profit maximization: MR=MC rule
ii. Perfect competition
- Profit maximization
- Short-run supply and shutdown decision
- Behavior of firms and markets in the short run
and long run
- Efficiency and perfect competition
iii. Monopoly
- Sources of market power
- Profit maximization
- Inefficiency of monopoly
- Price discrimination
iv. Oligopoly
- Interdependence, collusion, and cartels
- Game theory and strategic behavior
v. Monopolistic competition
- Product differentiation and role of advertising
- Profit maximization
- Short-run and long-run equilibrium
- Excess capacity and inefficiency
Unit 3 Factor Markets………………………………………….(10-18%)
a. Derived factor demand
b. Marginal revenue product
c. Labor market and firms’ hiring of labor
d. Market distribution of income
Unit 4 Market failure and the role of government………...….(12-18%)
a. Externalities
i. Marginal social benefit and marginal social cost
ii. Positive externalities
iii. Negative externalities
iv. Remedies
b. Public Goods
i. Public versus private goods
ii. Provision of public goods
c. Public policy to promote competition
i. Antitrust policy
ii. Regulation
c. Income distribution
i. Equity
ii. Sources of income equality
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Assessment:
Your grades can be viewed online at www.engrade.com
Class Participation
Class participation is vital to the success of any AP Economics program.
Students must arrive to class ready to interact with each other in
simulation activities and active discussions. Class participation also
includes working on assignments, note taking, and listening. The use of
smartphones, tablets, or any electronic device will drastically lower your
grade. This includes having any device on your desk.
Classroom Discussion
Discussing the principles of economics is the best way to learn the
material. Students also evaluated through verbal responses to questions
asked by the teacher and their peers. There is such a thing as too much
participation. If you monopolize classroom discussion, your grade will be
lowered.
Homework
Students are required to do the textbook reading prior to the class.
Students will also demonstrate a written understanding of the reading by
completing any homework questions assigned. Homework is given
every night and completed before the class meets.
Tests/Quizzes
All tests are based on the format of the AP exams. All Part II graphs and
responses are to be completed in ink on lined paper just like on the AP
exam. Part I and Part II questions are modeled after AP questions. Short
wrap-up quizzes that serve as a summative assessment are also helpful
tools. If you miss an exam, you must make it up immediately.
Tests are not returned until every student completes the exam.
Sample Quarterly Grade Distribution
Tests
60%
Quizzes
20%
Assignments 20%
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Course Materials:
College-ruled notebook/binder (no graph paper)
Pen (blue or black ink only), pencil, and calculator for in-class examples.
Textbook
Anderson, David and Margaret Ray. Krugman’s Economics for AP®
Second Edition. New York: BFW/Worth Publishers, 2015.
Videos
“200 Countries in 200 Years”
“A Beautiful Mind”
“Economics U$A”
“Enron: The Smartest Guys in the Room”
“The Fed Today”
“The Hudsucker Proxy”
“I Love Lucy”
“Inside Job”
“Is Wal-Mart Good for America?”
“The Other Side of Outsourcing”
“The Stand-Up Economist”
Key Websites for Economic Statistics
Bureau of Economic Analysis (GDP, National Income)
www.bea.gov
Bureau of Labor Statistics (Unemployment, Inflation)
www.bls.gov
Federal Reserve Economic Data (FRED) St. Louis Fed
www.research.stlouisfed.org/fred2
Websites for Studying and Exam Review
Mr. Medico’s No Bull Economics Lessons
www.MrMedico.info / www.nobulleconomics.com
Mr. Medico’s YouTube Channel
www.youtibe.com/medicotube
College Board/AP Central (Old Exam Questions)
www.apcentral.collegeboard.com
Economics Blogs
Café Hayek (www.cafehayek.com)
Dan Ariely (www.danariely.com)
Econ Browser (www.econbrowser.com)
Freakonomics (www.freakonomics.com/blog)
Greg Mankiw (www.gregmankiw.blogspot.com)
Marginal Revolution (www.marginalrevolution.com)
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Recommended Resources:
Books for Pleasure
Ariely, Dan. Predictably Irrational. 2008.
Bauman, Yoram and Grady Klein. The Cartoon Introduction to Economics:
Volume 1: Microeconomics. Hill and Wang, 2010.
Bauman, Yoram and Grady Klein. The Cartoon Introduction to Economics:
Volume 2: Macroeconomics. Hill and Wang, 2011.
Buchholz, Todd. From Here to Economy: A Shortcut to Economic
Literacy. Plume, 1996.
Buchholz, Todd. New Ideas from Dead Economists: An Introduction to
Modern Economic Thought. Plume, 1999.
Cowen, Tyler. Discover Your Inner Economist. 2007.
Frank, Robert H. The Economic Naturalist. 2007.
Hazlitt, Henry. Economics in One Lesson. Three Rivers Press, 1988
Edition.
Heilbronner, Robert. The Worldly Philosophers 7th Rev. Ed. Touchstone,
1999.
Landsburg, Steven. The Armchair Economist: Economics and Everyday
Experience. Free Press, 1995.
Levitt, Steven D. and Stephen J. Dubner. Freakonomics: A Rogue
Economist Explores the Hidden Side to Everything. Morrow, 2005.
Review Books/Materials
No Bull Review for Use with the AP Macroeconomics and AP Microeconomics
Exams by Mr. Medico, Barron’s, Princeton Review, Kaplan, and 5 Steps to a 5.
Apps: There are also review apps for smart phones including my review apps,
Economics AP from StudyByApp for the iPhone, iPad, and iPod Touch; features
practice questions, unit review lectures, diagrams, and notes.
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Course Assignments:
Quarter 1: Macroeconomics
#1 Register Engrade account; Read Module 1; p.8 1-4, p.9 1-5 MC
Watch 1.1 Scarcity; Analyze Bastiat’s Broken Window
#2 Read Module 3; p.22 1 & 1-5 MC
Watch 1.2 Production Possibilities; WS PPC
#3 Read Module 4; p.30-31 1-2 & 1-5 MC
Watch 1.3 Comparative Advantage and Trade; WS Nick-Jessica, FRQ
#4 Quick Quiz – Introductory Concepts
Watch 1.4 Circular Flow; WS Circular Flow
#5 Read Modules 5-8; p.58 1, p.67 1-2, p.78 1-3, p.89 1-3, p.100-01 1-13 MC
Watch 1.5 Supply and Demand, 1.6 Shifting Supply and Demand, 1.7 Price Ceilings, 1.8
Price Floors; Wheat Market Simulation; WS Grebes
#6 Exam 1: Basic Economic Concepts (NB1)
Watch Top 10 Basic Economic Concepts to Know (or listen to mp3 with Top Ten Guide)
#7 Read Modules 2, 10-11; p.15 1-5 MC, p.114 1-5 MC, p.119 1-2 & 1-5 MC
Watch 2.2 GDP, 2.3 Excluded GDP, 2.4 Real vs. Nominal GDP; WS GDP
#8 Quick Quiz 1: GDP
#9 Read Modules 12-13; p.127 1-3, p.137 1-5 MC
Watch 2.5 Types of Unemployment, 2.6 Unemployment Rate
#10 Read Modules 14-15; p.144 1-2 & 1-5 MC, p.152 1-5 MC
Watch 2.7 Inflation Overview; WS Inflation, WS Review Questions
#11 Exam 2: Macroeconomic Performance (NB2)
Watch Top 10 Macroeconomic Performance Concepts to Know (or listen to mp3)
#12 Read Modules 17-19; p.178 1 & 1-5 MC, p.190 1 & 1-5 MC, p.199 1-2 & 1-5 MC
WS AD/AS
#13 Read Module 16; p.170 1-2 & 1-5 MC
WS Spending Multiplier
Quarter 2: Macroeconomics
#14 Quick Quiz 2: AD/AS Graphing
#15 Read Modules 20-21; p.209 1 & 1-5 MC, p.216 1 & 1-5 MC
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Watch 3.1 Exp. Fiscal Policy, 3.2 Contr. Fiscal Policy; WS Fiscal Policy
#17 Exam 3: AD/AS & Fiscal Policy (NB3)
Watch Top 10 AD/AS & Fiscal Policy Concepts to Know (or listen to mp3)
#18 Read Modules 22-24; p.231 1-5 MC, p.237 1 & 1-5 MC, p.243 1-5 MC
Watch The Fed Today; WS Money
#19 Read Module 25; p.252 3 & 1-5 MC
WS Multiple Expansion of Checkable Deposits
#20 Read Module 26-28; p.260 1-5 MC, p.266 1-5 MC, p.274 1-5 MC
WS Tools of Monetary Policy
#21 Quick Quiz 3: Monetary Policy
#22 Read Module 35; Monetary Policy Project
FRED Research; Creative Presentation
#23 Exam 4: Money, Banking, & Monetary Policy (NB4)
Watch Top 10 Banking & Monetary Policy Concepts to Know (or listen to mp3)
#24 Read Modules 29, 34-35; p.285-286 1 & 1-5 MC, p.339 1 & 1-5 MC, p.351-352 1-5
MC
Watch EconStories; WS Phillips Curve
#25 Big Quiz 1: Theories, Policies, & Growth (NB5)
Watch Top 10 Theories, Policies, and Growth Concepts to Know (or listen to mp3)
#26 Read Module 41; p.415 1 & 1-5 MC
WS Current & Capital Account
#27 Read Modules 42 & 44; p.425 1 & 1-5 MC, p.442 1-5 MC
WS Foreign Exchange Markets
#28 Big Quiz 2: International Sector (NB6)
Watch Top 10 International Economic Concepts to Know (or listen to mp3)
#29 Macroeconomics Practice Exam
#30 Final Exam: Macroeconomics (NB1-6)
Watch Top 10 AP Macroeconomics Exam Concepts to Know
Quarter 3: Microeconomics
#1 Read Modules 51 & 50; p.524 1-5 MC & p.525 1 FRQ, p.512-513 2 & 1-5 MC
Watch 2.1 Consumer Surplus, 2.2 Producer Surplus; WS Diminishing Marginal Utility
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#2 Read Modules 46-48; p.465 1-5 MC, p.475 1-2 & 1-5 MC, p.483 1-5 MC
WS Elasticities
#3 Exam 1: Basic Economic Concepts+ (NB1 & NB7)
Watch Top 10 Utility & Elasticity Concepts to Know (or listen to mp3)
#4 Read Modules 52-55; p.543 1 & 1-5 MC, p.550 1-5 MC, p.562 1-5 MC, p.570 1-5 MC
Watch Top 10 Costs of Production Concepts to Know; WS MP-AP & Production Costs
#5 Read Modules 57-59; p.581 1, p.593 1-5 MC, p.601 1-5 MC
Watch 4.2 PC–Economic Profit, 4.3 PC–Economic Loss; WS Perfect Competition
#6 Read Module 60; p.612-613 1 & 1-5 MC
WS Graphing Perfect Competition in Short Run & Long Run
#7 Read Modules 61-63; p.622 1-5 MC, p.628 1-5 MC, p.635 1-5 MC; p.639 1-25
Watch 4.5 Elasticity & Marginal Revenue, 4.6 Mon.–Profit, 4.7 Mon.–Loss, 4.8 Mon.–
Deadweight Loss, 4.9 Mon.–Consumer Surplus; WS Monopoly
#8 Quick Quiz 1: Graphing Perfect Competition & Monopoly
WS PC-Monopoly
#9 Read Module 67; p.674 1-5 MC
Watch 4.10, 4.11, 4.12 Monopolistic Competition; WS Monopolistic Competition
#10 Read Module 64-65; p.656 1 & 1-5 MC
Watch 4.15 Game Theory; WS Game Theory
#11 Exam 2: Product Markets (NB8 & NB9)
Watch 4.1 PC Overview, 4.4 Monopolies, 4.13 Per-Unit vs. Lump-Sum, 4.14 Oligopoly
#12 Read Modules 69-71; p.697 1-2 & 1-5 MC, p.704 1-5 MC, p.714 2 FRQ
Watch 5.1 Perfectly Competitive Labor Market; WS Derived Demand
#13 Read Module 72; p.718 1 & 1-5 MC
#14 Read Module 73; p.726 1-5 MC
#15 Exam 3: Factor Markets (NB10)
Watch Top 10 Factor Market Concepts to Know (or listen to mp3)
#16 Read Module 76; p.761 1-2 & 1-5 MC
#17 Read Modules 74-75, 78; p.750 2 & 1-5 MC, p.782 1-5 MC
Watch 6.1 Pos. Ext., 6.2 Neg. Ext., & 6.3 Per-Unit Taxes; WS Externalities
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#18 Big Quiz 1: The Government (NB11)
Watch Top 10 Role of Government Concepts to Know (or listen to mp3)
Quarter 4: Microeconomics & AP Exam Review
#20 Practice Microeconomics Exams (2005-2015)
#21 Microeconomics FRQs (2011-2015)
#22 Final Exam: Microeconomics (NB1 & NB7-11)
#25 Practice Macroeconomics Exams (2005-2015)
#26 Macroeconomics FRQs (2011-2015)
#27 More Practice Exams
Prepare for the AP Economics exams by reviewing reviewing both No Bull Review
books; using the audio-video resources on http://MrMedico.info; watching videos on
http://YouTube.com/user/medicotube, doing the MC questions from old AP exams, and
completing practice FRQs on AP Central.
If you have any questions, please email me at cmedico@gmail.com
You can also text me at (516) 900-ECON [3266]
Find me on Twitter @MrMedicoInfo
Follow my Instagram @MrMedico
Good luck!
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