12–17% of the AP exam. Key topics: Gross Domestic Product (GDP): expenditure approach (C + I + G + NX), income approach, Real GDP vs. nominal GDP; GDP deflator calculation, Unemployment rate calculation; types of unemployment (frictional, structural, cyclical), Natural rate of unemployment (NRU) and full employment, Inflation: Consumer Price Index (CPI) calculation; effects on purchasing power and real wages, Circular flow model (households, firms, government, financial sector, foreign sector), Business cycle phases: expansion, peak, recession, trough.
Study guide content for this unit is being prepared. Check back soon for complete lesson notes, formula sheets, and worked examples.
