Unit 3 National Income Make a Copy

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economy 12 grade economics English


Unit 3: National Income and Price Determination in AP Macroeconomics delves into the intricacies of understanding and measuring a nation's economic performance, unraveling the factors influencing price levels, and examining the forces shaping the overall economy. This unit serves as a cornerstone in comprehending the broader landscape of macroeconomics.

The unit begins with a comprehensive exploration of national income accounting, wherein students unravel the complexities of Gross Domestic Product (GDP) and its various components. They engage with the expenditure approach, income approach, and value-added approach to calculating GDP, gaining a profound insight into how these metrics function as indicators of a nation's economic health.

Moving forward, the unit ventures into the realm of economic fluctuations, introducing students to the business cycle and the inherent shifts between periods of economic growth, recession, depression, and recovery. The study of leading, lagging, and coincident indicators equips students with the tools to analyze and predict economic trends, fostering a deeper understanding of the cyclical nature of economies.

National income and price determination are closely intertwined with the labor market, and this unit unravels the complexities surrounding employment, unemployment, and inflation. Students delve into the intricacies of the Phillips curve, exploring the trade-offs between inflation and unemployment, and gaining insights into the policies that influence these critical economic variables.

A pivotal aspect of the unit involves exploring the Keynesian model and the Aggregate Demand-Aggregate Supply (AD-AS) model. Through these models, students analyze the determinants of consumption, investment, government spending, and net exports, deciphering how changes in these components impact the overall level of economic activity.

Furthermore, the unit provides a lens through which students examine fiscal and monetary policy, evaluating the tools available to policymakers in influencing the economy. Fiscal policy discussions involve government spending and taxation, while monetary policy explores the role of the Federal Reserve in regulating the money supply and interest rates.