Krugman’s Macroeconomics for the AP® Course contains all the content, practice, and support you need to master the AP® Macroeconomics skills and course.

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
  

Appendix 

Putting it All Together

• A Structure for Macroeconomic Analysis

Enrichment 

• A:  Recession and Recovery During the Pandemic


• B:  Federal Reserve Monetary Policy in an Ample Reserve Regime