College · Aligned to AP Macroeconomics
Macroeconomics Foundations (ECON 102) — study guide & practice questions
GDP, unemployment and inflation, AD–AS, fiscal and monetary policy, growth, and the open economy: full AP Macro scope.
Study guide
Measuring the Economy
- GDP = C + I + G + NX, counting only new final goods and services.
- Unemployment rate = unemployed ÷ labor force.
Stabilization Policy
- Fiscal policy shifts AD through spending and taxes; the spending multiplier is 1/MPS.
- The Fed lowers interest rates to expand AD and raises them to fight inflation.
Long Run & Open Economy
- The long-run Phillips curve is vertical at the natural rate of unemployment.
- Higher U.S. interest rates attract capital, appreciate the dollar, and reduce net exports.
Course modules
4 foundation modules free to read here; 3 AP-level and advanced modules with Pro. Every module ends with a quiz in the app.
1. Measuring the Macroeconomy Free
GDP and how it is counted, real vs. nominal values, unemployment, and inflation.
Read the 3 lessons →2. Aggregate Demand & Aggregate Supply Free
What shifts AD, SRAS and LRAS, how the economy reaches equilibrium, and recessionary vs. inflationary gaps.
Read the 3 lessons →3. Fiscal Policy Free
Government spending and taxes as stabilization tools, the multipliers, automatic stabilizers, deficits, and crowding out.
Read the 3 lessons →4. Money & Banking Free
What money is, the money supply, fractional reserve banking and the money multiplier, and the money market.
Read the 3 lessons →5. AP: Monetary Policy & the Federal Reserve Pro · AP Macro · Unit 4
How the Fed conducts monetary policy with ample reserves, the loanable funds market, and how policy moves AD.
6. AP: The Phillips Curve & Economic Growth Pro · AP Macro · Unit 5
The short-run tradeoff between inflation and unemployment, why it disappears in the long run, and what drives long-run growth.
7. AP: The Open Economy Pro · AP Macro · Unit 6
The balance of payments, foreign exchange markets, and how policy and interest rates move exchange rates and trade.
Sample practice questions
From module 1, Measuring the Macroeconomy. Pick your answers, then check them in the app, with an explanation for every question.
1. If the nominal interest rate is 6% and inflation is 4%, the real interest rate is about:
2. Unexpectedly high inflation tends to benefit:
Sample flashcards
4 of the cards in this course's deck. Tap a card to flip it.
Measuring the EconomyExpenditure formula for GDP
GDP = C + I + G + (X − M).
Measuring the EconomyUnemployment rate formula
Unemployed ÷ labor force × 100. Discouraged workers are not in the labor force.
Fiscal PolicySpending multiplier
1 / MPS = 1 / (1 − MPC).
Fiscal PolicyWhat is crowding out?
Government borrowing raises real interest rates, which reduces private investment.
The full course is in LectureMate's Course Library: every module quiz with explanations, the complete flashcard deck with spaced repetition, and a 6-step strategy for AP Macroeconomics questions. Foundation modules are free; AP-level and advanced modules need Pro.