Krugman's Macroeconomics for the AP® Course

Fourth Edition

Publication Date: March 15, 2023

Hardcover ISBN: 9781319409333

Pages: 512

Reach New Heights with the Best AP® Macroeconomics Textbook

AP® Macroeconomics courses are challenging. Written specifically for AP® students and teachers by AP® Econ experts Margaret Ray and David Anderson, Krugman’s Macroeconomics for the AP® Course, 4th Edition provides all the support you need to reach the summit and to succeed on the exams....
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Strive for a 5: Preparing for the AP® Macroeconomics Exam


UNIT 1 Basic Economic Concepts

1.1 Scarcity and Choice

  • Scarcity and Choice: The Core of Economics
  • Microeconomics Versus Macroeconomics
  • Positive Versus Normative Economics

1.2 Opportunity Cost and the Production Possibilities Curve  Model

  • The Use of Models in Economics
  • Trade-offs: The Production Possibilities Curve

1.3 Comparative Advantage and Gains from Trade

  • Gains from Trade
  • Comparative Advantage and Gains from Trade

1.4 Demand

  • The Demand Curve

1.5 Supply

  • The Supply Curve

1.6 Market Equilibrium, Disequilibrium, and Changes in Equilibrium

  • Supply, Demand, and Equilibrium
  • Changes in Supply and Demand

Unit 2 Economic Indicators and the Business Cycle

2.1 The Circular Flow and Gross Domestic Product

  • The National Accounts
  • Gross Domestic Product

2.2 Limitations of Gross Domestic Product

  • Creating the National Accounts

2.3 Unemployment

  • The Unemployment Rate
  • Types of Unemployment
  • Changes in the Natural Rate of Unemployment

2.4 Price Indices and Inflation

  • Inflation, Deflation, and Price Stability
  • Inflation and Deflation
  • Price Indices and the Aggregate Price Level

2.5 Costs of Inflation

  • The Expected Costs of Inflation
  • Winners and Losers from Unexpected Inflation
  • Inflation Is Easy; Disinflation Is Hard

2.6 Real Versus Nominal Gross Domestic Product

  • Real GDP: A Measure of Aggregate Output
  • Calculating Real GDP
  • What Real GDP Doesn’t Measure

2.7 Business Cycles

  • Macroeconomics and the Business Cycle
  • The Business Cycle
  • Employment, Unemployment, and the Business Cycle

UNIT 3 National Income and Price Determination

3.1 Aggregate Demand

  • The Components of Aggregate Demand
  • Investment Spending 
  • The Aggregate Demand Curve

3.2 Multipliers

  • The Multiplier Process

3.3 Short-Run Aggregate Supply

  • Aggregate Supply

3.4 The Long-Run Aggregate Supply

  • The Short Versus the Long Run
  • The Long-Run Aggregate Supply Curve

3.5 Equilibrium in the Aggregate Demand–Aggregate Supply Model

  • The AD-AS Model

3.6 Short-Run Changes in the Aggregate Demand–Aggregate Supply Model

  • Demand Shocks
  • Supply Shocks

3.7 Long-Run Self-Adjustment in the Aggregate Demand–Aggregate Supply Model

  • From the Short Run to the Long Run
  • Shifts in the Long-Run Aggregate Supply Curve

3.8 Fiscal Policy

  • The Rationale for Stabilization
  • Multiplier Effects and Fiscal Policy
  • A Cautionary Note: Lags in Fiscal Policy

3.9 Automatic Stabilizers

  • A Brief History of Stabilization Policy
  • Discretionary Versus Non-Discretionary Fiscal Policy
  • Alternative Responses to Supply and Demand Shocks

Unit 4 The Financial Sector

4.1 Financial Assets

  • The Opportunity Cost of Cash
  • The Financial System
  • Three Tasks of a Financial System
  • Types of Financial Assets
    Financial Intermediaries

4.2 Nominal Versus Real Interest Rates

  • Calculating Nominal and Real Interest Rates

4.3A Definition, Measurement, and Functions of Money

  • The Meaning of Money
  • Functions of Money
  • Types of Money

4.3B Managing Money and Credit: Central Banks and the Federal Reserve

  • Central Banks
  • The Federal Reserve System

4.4 Banking and the Expansion of the Money Supply

  • The Monetary Role of Banks
  • Determining the Money Supply

4.5 The Money Market

  • What Is the Money Market?
  • The Money Demand Curve
  • The Supply of Money

4.6 Monetary Policy

  • Conducting Monetary Policy
  • Implementing Monetary Policy
  • Monetary Policy Versus Fiscal Policy

4.7 The Loanable Funds Market

  • Matching Up Savings and Investment Spending
  • The Equilibrium Interest Rate

Unit 5 Long-Run Consequences of Stabilization Policies

5.1 Fiscal and Monetary Policy Actions in the Short Run

  • The Independence of Fiscal and Monetary Policy

5.2 The Phillips Curve

  • The Output Gap and Unemployment
  • The Short-Run Phillips Curve
  • Inflation and Unemployment in the Long Run

5.3 Money Growth and Inflation

  • Short-Run and Long-Run Effects of an Increase in the Money Supply
  • Monetary Neutrality
  • The Quantity Theory of Money

5.4 Government Deficits and the National Debt

  • The Government Budget Balance
  • Long-Run Implications of Fiscal Policy
  • Deficits, Surpluses, and Debt
  • Deficits and Debt in Practice

5.5 Crowding Out

  • Financing Government Debt

5.6 Economic Growth

  • Real GDP per Capita
  • The Sources of Long-Run Growth
  • Economic Growth and the Aggregate Production Function
  • Long-Run Economic Growth and the Aggregate Demand–Aggregate Supply Model

5.7 Public Policy and Economic Growth

  • Explaining Differences in Growth Rates
  • The Role of Government in Promoting Economic Growth
  • Supply-Side Fiscal Policies and Economic Growth

Unit 6 International Trade and Finance

6.1 Balance of Payments Accounts

  • Capital Flows and the Balance of Payments
  • Modeling the Financial Account

6.2 Exchange Rates

  • Understanding Exchange Rates

6.3 The Foreign Exchange Market

  • Demand and Supply in the Foreign Exchange Market

6.4 Changes in Policies, Economic Conditions, and the Foreign Exchange Market

  • Exchange Rate Regimes
  • Exchange Rates and Macroeconomic Policy
  • International Business Cycles

6.5 The Foreign Exchange Market and Net Exports

  • Why Trade?
  • The Effect of the Exchange Rate on Net Exports

6.6 Real Interest Rate s and International Capital Flows

  • International Capital Flows and the Loanable Funds Model
  • Underlying Determinants of International Capital Flows


Putting it All Together

  • A Structure for Macroeconomic Analysis


  • A:  Recession and Recovery During the Pandemic
  • B:  Federal Reserve Monetary Policy in an Ample Reserve Regime

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