Cover: Krugman's Macroeconomics for the AP® Course, 5th Edition by Margaret Ray; David Anderson

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Krugman's Macroeconomics for the AP® Course

Fifth  Edition©2027  Margaret Ray; David Anderson

About

Prepare for AP® Macroeconomics and AP® Microeconomics with Krugman’s Economics for the AP® Course, 5th Edition. Closely aligned with the AP® Course and Exam Description, this program helps you understand key economic concepts while building the graphing, calculation, and analytical skills you’ll need on the AP® exam.

Throughout the course, AP®-style multiple-choice and free-response questions give you frequent opportunities to practice what you’ve learned. The Show Your Work! calculation features provide step-by-step guidance for the numerical analysis you’ll encounter on the exams, while AP® Econ Tips help you work through challenging concepts and recognize how they may be assessed on the exam. Interactive Figures in Achieve provide hands-on practice manipulating graphs, exploring economic models, and seeing how changes in variables affect economic outcomes.

With additional personalized practice and support available in Achieve, Krugman’s Economics for the AP® Course gives you the tools to build your understanding, strengthen essential AP® skills, and approach the exam with confidence.

Table of Contents

MACROECONOMICS

UNIT 1 Basic Economic Concepts

Module 1.1 Scarcity and Choice

Module 1.2 Opportunity Cost and the Production

Possibilities Curve Model

Module 1.3 Comparative Advantage and

Gains from Trade

Module 1.4 Demand

Module 1.5 Supply

Module 1.6 Market Equilibrium, Disequilibrium,

and Changes in Equilibrium

UNIT 2 Economic Indicators

and the Business Cycle

Module 2.1 The Circular Flow and Gross

Domestic Product

Module 2.2 Limitations of Gross Domestic Product

Module 2.3 Unemployment

Module 2.4 Price Indices and Inflation

Module 2.5 Costs of Inflation

Module 2.6 Real Versus Nominal Gross

Domestic Product

Module 2.7 Business Cycles

UNIT 3 National Income and

Price Determination

Module 3.1 Aggregate Demand

Module 3.2 Multipliers

Module 3.3 Short-Run Aggregate Supply

Module 3.4 Long-Run Aggregate Supply

Module 3.5 Equilibrium in the Aggregate

Demand–Aggregate Supply Model

Module 3.6 Short-Run Changes in the Aggregate

Demand–Aggregate Supply Model

Module 3.7 Long-Run Self-Adjustment in the

Aggregate Demand–Aggregate

Supply Model

Module 3.8 Fiscal Policy

Module 3.9 Automatic Stabilizers

UNIT 4 The Financial Sector

Module 4.1 Financial Assets

Module 4.2 Nominal Versus Real Interest Rates

Module 4.3A Definition, Measurement, and

Functions of Money

Module 4.3B Managing Money and Credit: Central

Banks and the Federal Reserve

Module 4.4 Banking and the Expansion of the

Money Supply

Module 4.5 The Money Market

Module 4.6 Monetary Policy

Module 4.7 The Loanable Funds Market

UNIT 5 Long-Run Consequences

of Stabilization Policies

Module 5.1 Fiscal and Monetary Policy

Actions in the Short Run

Module 5.2 The Phillips Curve

Module 5.3 Money Growth and Inflation

Module 5.4 Government Deficits and the

National Debt

Module 5.5 Crowding Out

Module 5.6 Economic Growth

Module 5.7 Public Policy and Economic Growth

UNIT 6 International Trade

and Finance

Module 6.1 Balance of Payments Accounts

Module 6.2 Exchange Rates

Module 6.3 The Foreign Exchange Market

Module 6.4 Policies, Economic Conditions, and

the Foreign Exchange Market

Module 6.5 The Foreign Exchange Market

and Net Exports

Module 6.6 Real Interest Rate and International

Capital Flows

Macro Appendix: AP® Test Free-Response

Questions

AP® Macroeconomics Exam: Practice Test

Macro Enrichment Modules

Module A Recession and Recovery During

the Pandemic

Module B Federal Reserve Monetary Policy

with Ample Reserves

Margaret Ray

Margaret Ray teaches economics at both the university and high school levels. She is an Instructional Professor and Director of Undergraduate Programs at Texas A&M University in College Station, Texas, and has been an AP® Economics instructor at Collegiate School in Richmond, Virginia, and for Johns Hopkins University’s Center for Talented Youth. She received her BS in economics from Oklahoma State University and her PhD in economics from the University of Tennessee. She also earned an MEd in curriculum and instruction and is certified to teach K–12 social studies. Margaret received the Council on Economic Education’s Excellence in Teaching Economics award and the Virginia Council on Economic Education J. Curtis Hall Award. She has been involved in the AP® Economics program since 1992, serving as a reader, table leader, and question leader, writing test items, overseeing the AP® course audit, writing College Board® “Special Focus” articles, and editing the Council on Economic Education’s AP® Macroeconomics resource. She has been a College Board® Endorsed Consultant for economics since 2001, and she conducts several professional development workshops and institutes each year. Her favorite hobby is showing hunter-jumper horses adopted from racehorse rescue organizations. She lives on a small farm in central Texas.

David Anderson

David Anderson is the Paul G. Blazer Professor of Economics and Business at Centre College. He received his BA in economics from the University of Michigan and his MA and PhD in economics from Duke University. He earned a graduate certificate in innovation and entrepreneurship from the Harvard Extension School and an MBA from the University of the People. Dave has been involved in the AP® Economics program since 1994. For five years, he led the grading of one or both of the AP® Economics exams, and he speaks regularly at AP® conferences and workshops. He has authored or co-authored dozens of scholarly articles and 18 books, including Survey of Economics, Explorations in Economics, Economics by Example, Business with Personal Finance for the AP® Course , The Light in the Library Basement, and Environmental Economics and Natural Resource Management. His research is primarily on economic education, environmental economics, law and economics, and labor economics. Dave loves teaching introductory economics and has won awards for excellence and innovation in the classroom. His favorite hobby is running marathons. His family resides in Danville, Kentucky.