United States · College BoardSyllabus
Economics syllabus, dot point by dot point
Every dot point in the United States Economicssyllabus, with a focused answer for each one. Click any dot point for a worked explainer, past exam questions, and links to related dot points. Written by Claude Opus 4.8, Anthropic's latest AI.
Unit 1: Basic Economic Concepts
Module overview →- Why do specialization and trade make both parties better off, even when one is more productive at everything?Topic 1.3 Comparative Advantage and Gains from Trade: distinguish absolute from comparative advantage, calculate opportunity costs to determine comparative advantage, and identify the terms of trade that benefit both parties.12 min answer →
- What determines how much of a good buyers are willing and able to purchase, and what makes the whole demand curve shift?Topic 1.4 Demand: explain the law of demand, distinguish a change in quantity demanded from a change in demand, and identify the determinants that shift the demand curve.11 min answer →
- How do supply and demand together determine the market price and quantity, and how does equilibrium change when a curve shifts?Topic 1.6 Market Equilibrium, Disequilibrium, and Changes in Equilibrium: determine equilibrium price and quantity, analyze surpluses and shortages, and predict the new equilibrium when supply or demand shifts.12 min answer →
- How does the production possibilities curve model scarcity, opportunity cost, efficiency, and economic growth?Topic 1.2 Opportunity Cost and the Production Possibilities Curve: use the PPC to illustrate scarcity, trade-offs, opportunity cost, efficiency, and growth, and explain constant versus increasing opportunity cost.12 min answer →
- Why must every society make choices, and how do scarcity, the factors of production, and economic systems frame those choices?Topic 1.1 Scarcity: explain how scarcity forces individuals and societies to make choices, distinguish needs from wants, identify the factors of production, and describe how different economic systems answer the three basic economic questions.11 min answer →
- What determines how much of a good producers are willing to sell, and what makes the whole supply curve shift?Topic 1.5 Supply: explain the law of supply, distinguish a change in quantity supplied from a change in supply, and identify the determinants that shift the supply curve.11 min answer →
Unit 2: Economic Indicators and the Business Cycle
Module overview →- How does an economy move through expansions and recessions, and how do output gaps relate to unemployment and inflation?Topic 2.7 Business Cycles: describe the phases of the business cycle, relate them to real GDP, unemployment, and inflation, and explain expansionary and recessionary output gaps relative to potential output.11 min answer →
- Who is helped and who is harmed by inflation, and why does anticipated inflation matter less than unanticipated inflation?Topic 2.5 Costs of Inflation: explain the real costs of inflation, distinguish anticipated from unanticipated inflation, and identify how inflation redistributes income between borrowers, lenders, and people on fixed incomes.11 min answer →
- What does GDP fail to capture, and why is it an imperfect measure of a nation's well-being?Topic 2.2 Limitations of GDP: explain why GDP omits non-market and underground activity, ignores distribution, leisure, and externalities, and why GDP per capita is used to compare living standards.11 min answer →
- How do we measure the price level and the rate of inflation, and what causes it?Topic 2.4 Price Indices and Inflation: define inflation and deflation, build and use the Consumer Price Index, calculate the inflation rate, and distinguish demand-pull from cost-push inflation.12 min answer →
- How do we separate genuine changes in output from changes in prices when measuring GDP over time?Topic 2.6 Real versus Nominal GDP: distinguish nominal from real GDP, use the GDP deflator to convert between them, and explain why real GDP is the correct measure of output growth.12 min answer →
- How does money and output flow through an economy, and how do we measure the total value of what it produces?Topic 2.1 The Circular Flow and GDP: describe the circular flow of income and expenditure, define gross domestic product, and explain the expenditure approach using C plus I plus G plus net exports.12 min answer →
- How is unemployment measured, what types exist, and what does full employment mean?Topic 2.3 Unemployment: define the labor force and unemployment rate, calculate them, distinguish frictional, structural, and cyclical unemployment, and explain the natural rate and full employment.12 min answer →
Unit 3: National Income and Price Determination
Module overview →- Why does the aggregate demand curve slope downward, and what shifts it?Topic 3.1 Aggregate Demand: define aggregate demand, explain the wealth, interest-rate, and exchange-rate effects that make it downward sloping, and identify the determinants that shift it.12 min answer →
- How do taxes and transfers stabilize the economy without any new legislation?Topic 3.9 Automatic Stabilizers: explain how the progressive tax system and transfer payments automatically dampen the business cycle without discretionary action.10 min answer →
- How do shocks to aggregate demand and short-run aggregate supply change output and the price level?Topic 3.6 Changes in the AD-AS Model in the Short Run: trace how shifts in aggregate demand or short-run aggregate supply change the price level, real output, and unemployment in the short run.11 min answer →
- How do aggregate demand and aggregate supply determine output, the price level, and output gaps?Topic 3.5 Equilibrium in the AD-AS Model: locate short-run and long-run macroeconomic equilibrium, and identify recessionary and inflationary output gaps.11 min answer →
- How does the government use spending and taxes to close output gaps?Topic 3.8 Fiscal Policy: explain how expansionary and contractionary fiscal policy use government spending and taxes, with the multiplier, to close recessionary and inflationary output gaps.12 min answer →
- Why is long-run aggregate supply vertical at full-employment output, and what moves it?Topic 3.4 Long-Run Aggregate Supply: explain why the long-run aggregate supply curve is vertical at full-employment (potential) output, and identify what shifts it.11 min answer →
- How does an economy return to full employment on its own after a shock?Topic 3.7 Long-Run Self-Adjustment: explain how flexible wages and prices return the economy to full-employment output after a demand or supply shock, with no policy intervention.11 min answer →
- How does an initial change in spending produce a larger change in real GDP?Topic 3.2 Multipliers: define the marginal propensities to consume and save, derive the spending and tax multipliers, and use them to calculate the total change in real GDP from a change in spending or taxes.12 min answer →
- Why does short-run aggregate supply slope upward, and what shifts it?Topic 3.3 Short-Run Aggregate Supply: explain why the short-run aggregate supply curve slopes upward using sticky wages and prices, and identify the determinants that shift it.11 min answer →
Unit 4: Financial Sector
Module overview →- How do banks create money through fractional-reserve lending?Topic 4.4 Banking and the Expansion of the Money Supply: explain fractional-reserve banking, use a T-account balance sheet, and calculate the money multiplier and maximum change in the money supply.12 min answer →
- What is money, what does it do, and how is the money supply measured?Topic 4.3 Definition, Measurement, and Functions of Money: state the functions of money, distinguish commodity and fiat money, and describe the money supply measures M1 and M2.10 min answer →
- What are financial assets, and how do their prices and interest rates relate?Topic 4.1 Financial Assets: define financial assets, distinguish stocks, bonds, and money, and explain the inverse relationship between bond prices and interest rates.11 min answer →
- How does the central bank use its tools to change interest rates and aggregate demand?Topic 4.6 Monetary Policy: identify the central bank's tools, explain expansionary and contractionary monetary policy, and trace the transmission from the money market to aggregate demand.12 min answer →
- How does expected inflation separate the nominal interest rate from the real interest rate?Topic 4.2 Nominal versus Real Interest Rates: define nominal and real interest rates, apply the Fisher relationship, and explain how expected inflation affects borrowers and lenders.11 min answer →
- How does the loanable funds market determine the real interest rate?Topic 4.7 The Loanable Funds Market: draw the loanable funds market, explain the supply of saving and demand for borrowing, and show how shifts determine the real interest rate.12 min answer →
- How does the money market determine the nominal interest rate?Topic 4.5 The Money Market: draw the money market, explain money demand and the vertical money supply, and show how shifts determine the equilibrium nominal interest rate.12 min answer →
Unit 5: Long-Run Consequences of Stabilization Policies
Module overview →- How does government borrowing reduce private investment?Topic 5.5 Crowding Out: explain how government deficit borrowing raises the real interest rate and reduces private investment, using the loanable funds market.11 min answer →
- What drives long-run economic growth, and how is it shown in the models?Topic 5.6 Economic Growth: define economic growth, identify its determinants, and show it as an outward shift of the production possibilities curve and the long-run aggregate supply curve.11 min answer →
- How do fiscal and monetary policy work together in the short run to close output gaps?Topic 5.1 Fiscal and Monetary Policy Actions in the Short Run: combine fiscal and monetary policy to close output gaps, and trace their joint effects on output, the price level, and interest rates.11 min answer →
- What is the difference between a deficit and the debt, and what are the long-run consequences of borrowing?Topic 5.4 Government Deficits and the National Debt: distinguish a budget deficit from the national debt, and explain the long-run consequences of persistent deficits.11 min answer →
- Why does sustained money growth cause inflation but not long-run real growth?Topic 5.3 Money Growth and Inflation: apply the quantity theory of money and the equation of exchange to explain why sustained money growth raises the price level in the long run.11 min answer →
- Which public policies raise an economy's long-run growth?Topic 5.7 Public Policy and Economic Growth: evaluate how supply-side and growth-oriented public policies, such as investment in capital, education, infrastructure, and research, raise long-run potential output.11 min answer →
- What is the short-run trade-off between unemployment and inflation, and why does it vanish in the long run?Topic 5.2 The Phillips Curve: explain the short-run trade-off between inflation and unemployment, the vertical long-run Phillips curve at the natural rate, and how the curves shift.12 min answer →
Unit 6: Open Economy - International Trade and Finance
Module overview →- How do the balance of payments accounts record a country's transactions with the world?Topic 6.1 Balance of Payments Accounts: describe the current account and the capital (financial) account, and explain why the two must offset each other.11 min answer →
- How do exchange-rate changes feed through to net exports and aggregate demand?Topic 6.5 Changes in the Foreign Exchange Market and Net Exports: explain how appreciation and depreciation change net exports, and trace the effect on aggregate demand.11 min answer →
- What shifts the supply of and demand for a currency in the foreign exchange market?Topic 6.4 Effect of Changes in Policies and Economic Conditions on the Foreign Exchange Market: identify the determinants that shift currency supply and demand, including interest rates, income, prices, and tastes.12 min answer →
- What is an exchange rate, and what do appreciation and depreciation mean?Topic 6.2 Exchange Rates: define the nominal exchange rate, distinguish appreciation from depreciation, and calculate exchange rates between two currencies.11 min answer →
- How do differences in real interest rates drive capital flows and exchange rates?Topic 6.6 Real Interest Rates and International Capital Flows: explain how differences in real interest rates between countries drive international capital flows, exchange rates, and net exports.12 min answer →
- How does the foreign exchange market determine the exchange rate?Topic 6.3 The Foreign Exchange Market: draw the foreign exchange market for a currency, explain the supply of and demand for it, and find the equilibrium exchange rate.11 min answer →