Unit | Timeframe | Big Ideas (Statements or Essential Questions) | Major Learning Experiences from Unit |
|---|
Basic Economic Concepts | Sept | 1.1 Scarcity 1.2 Opportunity Cost and the Production Possibilities Curve (PPC) 1.3 Comparative Advantage and Gains from Trade 1.4 Demand 1.5 Supply 1.6 Market Equilibrium, Disequilibrium, and Changes in Equilibrium | To understand economics, students must first understand that because most resources are scarce, individuals and societies must make choices. Examining how and why these choices are made will help students begin to understand the principles of supply and demand along with the importance of specialization and exchange. In addition to introducing these basic economic concepts, this unit introduces foundational models that set the stage for more advanced economic analysis in subsequent units. |
Economic Indicators and the Business Cycle | Oct-Nov | 2.1 The Circular Flow and GDP 2.2 Limitations of GDP 2.3 Unemployment 2.4 Price Indices and Inflation 2.5 Costs of Inflation 2.6 Real v. Nominal GDP 2.7 Business Cycles | While Unit 1 provided students with an understanding of basic economic theory, Unit 2 sets them up for future analysis of macroeconomic concepts and issues. Students will learn how the economy works with a model of the circular flow of inputs and outputs and the money that pays for them. Students will also explore how economists assess the performance of the economy with an introduction to measures of economic performance and the business cycle. These concepts will be revisited in different contexts and models in the units that follow. |
National Income and Price Determination | Dec-Jan | 3.1 Aggregate Demand (AD) 3.2 Multipliers 3.3 Short-Run Aggregate Supply (SRAS) 3.4 Long-Run Aggregate Supply (LRAS) 3.5 Equilibrium in the Aggregate Demand– Aggregate Supply (AD–AS) Model 3.6 Changes in the AD–AS Model in the Short Run 3.7 Long-Run Self-Adjustment 3.8 Fiscal Policy 3.9 Automatic Stabilizers | In the previous unit, students were introduced to key macroeconomic indicators and the business cycle. In this unit, students will learn how to represent and evaluate these concepts in the context of a specific economic model: the aggregate demand–aggregate supply model. The aggregate demand–aggregate supply model is a powerful tool that allows economists to represent the impact of spending and production decisions, economic fluctuations, and policy actions on macroeconomic outcomes, including output, income, unemployment, and inflation |
Financial Sector | Feb-Mar | 4.1 Financial Assets 4.2 Nominal v. Real Interest Rates 4.3 Definition, Measurement, and Functions of Money 4.4 Banking and the Expansion of the Money Supply 4.5 The Money Market 4.6 Monetary Policy 4.7 The Loanable Funds Market | In the previous unit, students explored the effects of fiscal policy. In this unit, students will evaluate the macroeconomic effects of monetary policy. Before doing so, though, they should first have an understanding of how the financial sector works and be able to describe how monetary policy is implemented and transmitted through the banking system. This understanding begins with an introduction to financial assets, including money, and the way in which fractional reserve banking allows for the expansion of the money supply. Students will then build on their understanding of the financial sector by learning how to model the money market, the reserve market, and the loanable funds market. |
Long-Run Consequences of Stabilization Policies | Mar-Apr | 5.1 Fiscal and Monetary Policy Actions in the Short Run 5.2 The Phillips Curve 5.3 Money Growth and Inflation 5.4 Government Deficits and the National Debt 5.5 Crowding Out 5.6 Economic Growth 5.7 Public Policy and Economic Growth | In many ways, Unit 5 is a culmination and an extension of material that has been introduced previously. For example, in Units 3 and 4, students learned that public policy can affect the economy’s output, price level, and level of employment in the short run; in this unit, students will build on this understanding to examine the long-run implications of policy actions and the concept of economic growth. Similarly, in Unit 2 students were introduced to inflation and unemployment as economic indicators, and in Unit 3 they learned about the relationship between inflation and unemployment; in this unit, students explore how the Phillips curve model is used to represent this relationship in the short run and long run. |
Open Economy– International Trade and Finance | Apr-May | 6.1 Balance of Payments Accounts
6.2 Exchange Rates 6.3 The Foreign Exchange Market 6.4 Effect of Changes in Policies and Economic Conditions on the Foreign Exchange Market 6.5 Changes in the Foreign Exchange Market and Net Exports 6.6 Real Interest Rates and International Capital Flows | Unit 6 introduces students to the concept of an open economy in which a country interacts with the rest of the world through both product and financial markets. This unit is often challenging for students because economic activity between nations must be facilitated by currency exchange, which introduces another market to be considered when analyzing macroeconomic situations. Changes in economic activity affect the supply of and demand for a nation’s currency and subsequently the value of that currency. But it is also true that changes in the value of a country’s currency can affect economic activity in that country. In addition to these insights, students have the opportunity in this unit to consider the effects of economic policy on exchange rates and the implications of such changes. |
