AP Macroeconomics Reading and Writing Workshop

Topics: Measures of Economic Performance & National Income and Price Determination
Objective:
Students will engage with public domain economic texts, analyze key concepts, and respond to Free Response Questions (FRQs) to deepen their understanding of macroeconomic principles.

Part 1: Reading Selections
Students will read excerpts from the following public domain works:

1. The Wealth of Nations (1776) - Adam Smith
   
   • Focus: The role of GDP and economic growth
     
   • Excerpt: Discussion on the division of labor and productivity
     
2. Principles of Economics (1890) - Alfred Marshall
   
   • Focus: Aggregate demand and supply
     
   • Excerpt: The relationship between price levels and market equilibrium
     
3. Economic Consequences of the Peace (1919) - John Maynard Keynes
   
   • Focus: Inflation and unemployment
     
   • Excerpt: Keynesian theory on government intervention in the economy
     
4. A Treatise on Political Economy (1803) - Jean-Baptiste Say
   
   • Focus: Say's Law and national income
     
   • Excerpt: The theory that supply creates its own demand
     

Part 2: Writing Workshop
After reading the excerpts, students will complete the following writing exercises:

1. Summary and Analysis
   
   • Summarize the main argument of each excerpt
     
   • Analyze how the concepts relate to modern macroeconomic issues
     
2. Comparative Analysis
   
   • Compare and contrast Keynesian and Classical perspectives on economic performance
     
   • Use examples from historical economic events
     
3. Application to Current Events
   
   • Select a recent economic event and analyze it using concepts from the readings
     
   • Discuss implications for national income, inflation, or price determination
     

Part 3: Free Response Questions (FRQs)
FRQ 1: Measuring Economic Performance

• Define and explain the components of GDP.
  
• Using an example, discuss how GDP can overstate or understate economic well-being.
  
• Suppose a country experiences a rise in nominal GDP but a decline in real GDP. What could explain this situation?
  

FRQ 2: Unemployment and Inflation

• Define the three types of unemployment and provide an example for each.
  
• Explain the relationship between inflation and unemployment using the short-run Phillips Curve.
  
• Describe a scenario where cost-push inflation occurs and analyze its effects on national income.
  

FRQ 3: Aggregate Demand and Aggregate Supply

• Explain the determinants of aggregate demand and aggregate supply.
  
• Describe the effects of an increase in government spending on price levels and output.
  
• Using an AD-AS model, analyze the impact of a negative supply shock on the economy.
  

FRQ 4: Fiscal and Monetary Policy Impacts

• Explain how expansionary fiscal policy affects national income and economic performance.
  
• Compare the short-run and long-run effects of an increase in the money supply.
  
• How might crowding out reduce the effectiveness of fiscal policy?
  

Conclusion:
By engaging with these classic economic texts and responding to FRQs, students will develop a stronger foundation in macroeconomic theory and its applications. This workshop encourages critical thinking, historical analysis, and real-world application of economic principles.