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Module 1: Welcome to Economics!

• Discuss the importance of studying economics
• Explain the relationship between production and division of labor
• Evaluate the significance of scarcity
• Describe macroeconomics
• Contrast monetary policy and fiscal policy
• Contrast traditional economies, command economies, and market economies
• Explain gross domestic product (GDP)
• Assess the importance and effects of globalization

Module 2: Choice in a World of Scarcity

• Calculate and graph budget constraints
• Explain opportunity sets and opportunity costs
• Evaluate the law of diminishing marginal utility
• Explain how marginal analysis and utility influence choices
• Interpret production possibilities frontier graphs
• Contrast a budget constraint and a production possibilities frontier
• Explain the relationship between a production possibilities frontier and the law of diminishing returns
• Contrast productive efficiency and allocative efficiency
• Define comparative advantage
• Analyze arguments against economic approaches to decision-making

Module 3: Demand and Supply

• Explain demand, quantity demanded, and the law of demand
• Identify a demand curve and a supply curve
• Explain supply, quantity supplied, and the law of supply
• Explain equilibrium, equilibrium price, and equilibrium quantity
• Identify factors that affect demand
• Graph demand curves and demand shifts
• Identify factors that affect supply
• Graph supply curves and supply shifts
• Identify equilibrium price and quantity through the four-step process
• Graph equilibrium price and quantity
• Contrast shifts of demand or supply and movements along a demand or supply curve
• Graph demand and supply curves, including equilibrium price and quantity, based on real-world examples
• Explain price controls, price ceilings, and price floors
• Analyze demand and supply as a social adjustment mechanism
• Contrast consumer surplus, producer surplus, and social surplus
• Explain why price floors and price ceilings can be inefficient
• Analyze demand and supply as a social adjustment mechanism

Module 4: Labor and Financial Markets

• Predict shifts in the demand and supply curves of the labor market
• Explain the impact of new technology on the demand and supply curves of the labor market
• Explain price floors in the labor market such as minimum wage or a living wage
• Identify the demanders and suppliers in a financial market
• Explain how interest rates can affect supply and demand
• Analyze the economic effects of U.S. debt in terms of domestic financial markets
• Explain the role of price ceilings and usury laws in the U.S.
• Apply demand and supply models to analyze prices and quantities
• Explain the effects of price controls on the equilibrium of prices and quantities

Module 5: Elasticity

• Calculate the price elasticity of demand
• Calculate the price elasticity of supply
• Differentiate between infinite and zero elasticity
• Analyze graphs in order to classify elasticity as constant unitary, infinite, or zero
• Analyze how price elasticities impact revenue
• Evaluate how elasticity can cause shifts in demand and supply
• Predict how the long-run and short-run impacts of elasticity affect equilibrium
• Explain how the elasticity of demand and supply determine the incidence of a tax on buyers and sellers
• Calculate the income elasticity of demand and the cross-price elasticity of demand
• Calculate the elasticity in labor and financial capital markets through an understanding of the elasticity of labor supply and the elasticity of savings
• Apply concepts of price elasticity to real-world situations

Module 6: The Macroeconomic Perspective

• Identify the components of GDP on the demand side and on the supply side
• Evaluate how economists measure gross domestic product (GDP)
• Contrast and calculate GDP, net exports, and net national product
• Contrast nominal GDP and real GDP
• Explain GDP deflator
• Calculate real GDP based on nominal GDP values
• Explain recessions, depressions, peaks, and troughs
• Evaluate the importance of tracking real GDP over time
• Explain how we can use GDP to compare the economic welfare of different nations
• Calculate the conversion of GDP to a common currency by using exchange rates
• Calculate GDP per capita using population data
• Discuss how productivity influences the standard of living
• Explain the limitations of GDP as a measure of the standard of living
• Analyze the relationship between GDP data and fluctuations in the standard of living

Module 7: Economic Growth

• Explain the conditions that have allowed for modern economic growth in the last two centuries
• Analyze the influence of public policies on an economy’s long-run economic growth
• Identify the role of labor productivity in promoting economic growth
• Analyze the sources of economic growth using the aggregate production function
• Measure an economy’s rate of productivity growth
• Evaluate the power of sustained growth
• Discuss the components of economic growth, including physical capital, human capital, and technology
• Explain capital deepening and its significance
• Analyze the methods employed in economic growth accounting studies
• Identify factors that contribute to a healthy climate for economic growth
• Explain economic convergence
• Analyze various arguments for and against economic convergence
• Evaluate the speed of economic convergence between high-income countries and the rest of the world

Module 8: Unemployment

• Calculate the labor force participation rate and the unemployment rate
• Explain hidden unemployment and what it means to be in or out of the labor force
• Evaluate the collection and interpretation of unemployment data
• Explain historical patterns of unemployment in the U.S.
• Identify trends of unemployment based on demographics
• Evaluate global unemployment rates
• Analyze cyclical unemployment
• Explain the relationship between sticky wages and employment using various economic arguments
• Apply supply and demand models to unemployment and wages
• Explain frictional and structural unemployment
• Assess relationships between the natural rate of employment and potential real GDP, productivity, and public policy
• Identify recent patterns in the natural rate of employment
• Propose ways to combat unemployment

Module 9: Inflation

• Calculate the annual rate of inflation
• Explain and use index numbers and base years when simplifying the total quantity spent over a year for products
• Calculate inflation rates using index numbers
• Use the Consumer Price Index (CPI) to calculate U.S. inflation rates
• Identify several ways the Bureau of Labor Statistics avoids biases in the Consumer Price Index (CPI)
• Differentiate among the Consumer Price Index (CPI), the Producer Price Index (PPI), the International Price Index, the Employment Cost Index, and the GDP deflator.
• Identify patterns of inflation for the United States using data from the Consumer Price Index
• Identify patterns of inflation on an international level
• Explain how inflation can cause redistributions of purchasing power
• Identify ways inflation can blur the perception of supply and demand
• Explain the economic benefits and challenges of inflation
• Explain the relationship between indexing and inflation
• Identify three ways the government can control inflation through macroeconomic policy

Module 10: The International Trade and Capital Flows

• Explain merchandise trade balance, current account balance, and unilateral transfers
• Identify components of the U.S. current account balance
• Calculate the merchandise trade balance and current account balance using import and export data for a country
• Analyze graphs of the current account balance and the merchandise trade balance
• Identify patterns in U.S. trade surpluses and deficits
• Compare the U.S. trade surpluses and deficits to other countries’ trade surpluses and deficits
• Explain the connection between trade balances and financial capital flows
• Calculate comparative advantage
• Explain balanced trade in terms of investment and capital flows
• Explain the determinants of trade and current account balance
• Identify and calculate supply and demand for financial capital
• Explain how a nation’s own level of domestic saving and investment determines a nation’s balance of trade
• Predict the rising and falling of trade deficits based on a nation’s saving and investment identity
• Identify three ways in which borrowing money or running a trade deficit can result in a healthy economy
• Identify three ways in which borrowing money or running a trade deficit can result in a weaker economy
• Identify three factors that influence a country’s level of trade
• Differentiate between balance of trade and level of trade

Module 11: The Aggregate Demand/Aggregate Supply Model

• Explain Say’s Law and understand why it primarily applies in the long run
• Explain Keynes’ Law and understand why it primarily applies in the short run
• Explain the aggregate supply curve and how it relates to real GDP and potential GDP
• Explain the aggregate demand curve and how it is influenced by price levels
• Interpret the aggregate demand/aggregate supply model
• Identify the point of equilibrium in the aggregate demand/aggregate supply model
• Define short run aggregate supply and long run aggregate supply
• Explain how productivity growth changes the aggregate supply curve
• Explain how changes in input prices change the aggregate supply curve
• Explain how imports influence aggregate demand
• Identify ways in which business confidence and consumer confidence can affect aggregate demand
• Explain how government policy can change aggregate demand
• Evaluate why economists disagree on the topic of tax cuts
• Use the aggregate demand/aggregate supply model to show periods of economic growth and recession
• Explain how unemployment and inflation impact the aggregate demand/aggregate supply model
• Evaluate the importance of the aggregate demand/aggregate supply model
• Identify the neoclassical zone, the intermediate zone, and the Keynesian zone in the aggregate demand/aggregate supply model
• Use an aggregate demand/aggregate supply model as a diagnostic test to understand the current state of the economy

Module 12: The Keynesian Perspective

• Explain real GDP, recessionary gaps, and inflationary gaps
• Recognize the Keynesian AD/AS model
• Identify the determining factors of both consumption expenditure and investment expenditure
• Analyze the factors that determine government spending and net exports
• Evaluate the Keynesian view of recessions through an understanding of sticky wages and prices and the importance of aggregate demand
• Explain the coordination argument, menu costs, and macroeconomic externality
• Analyze the impact of the expenditure multiplier
• Explain the Phillips curve, noting its impact on the theories of Keynesian economics
• Graph a Phillips curve
• Identify factors that cause the instability of the Phillips curve
• Analyze the Keynesian policy for reducing unemployment and inflation
• Explain the Keynesian perspective on market forces
• Analyze the role of government policy in economic management

Module 13: The Neoclassical Perspective

• Explain the importance of potential GDP in the long run
• Analyze the role of flexible prices
• Interpret a neoclassical model of aggregate demand and aggregate supply
• Evaluate different ways for measuring the speed of macroeconomic adjustment
• Discuss why and how economists measure inflation expectations
• Analyze the impacts of fiscal and monetary policy on aggregate supply and aggregate demand
• Explain the neoclassical Phillips curve, noting its tradeoff between inflation and unemployment
• Identify clear distinctions between neoclassical economics and Keynesian economics
• Evaluate how neoclassical economists and Keynesian economists react to recessions
• Analyze the interrelationship between the neoclassical and Keynesian economic models

Module 14: Money and Banking

• Explain the various functions of money
• Contrast commodity money and fiat money
• Contrast M1 money supply and M2 money supply
• Classify monies as M1 money supply or M2 money supply
• Explain how banks act as intermediaries between savers and borrowers
• Evaluate the relationship between banks, savings and loans, and credit unions
• Analyze the causes of bankruptcy and recessions
• Utilize the money multiplier formulate to determine how banks create money
• Analyze and create T-account balance sheets
• Evaluate the risks and benefits of money and banks

Module 15: Monetary Policy and Bank Regulation

• Explain the structure and organization of the U.S. Federal Reserve
• Discuss how central banks impact monetary policy, promote financial stability, and provide banking services
• Discuss the relationship between bank regulation and monetary policy
• Explain bank supervision
• Explain how deposit insurance and lender of last resort are two strategies to protect against bank runs
• Explain the reason for open market operations
• Evaluate reserve requirements and discount rates
• Interpret and show bank activity through balance sheets
• Contrast expansionary monetary policy and contractionary monetary policy
• Explain how monetary policy impacts interest rates and aggregate demand
• Evaluate Federal Reserve decisions over the last forty years
• Explain the significance of quantitative easing (QE)
• Analyze whether monetary policy decisions should be made more democratically
• Calculate the velocity of money
• Evaluate the central bank’s influence on inflation, unemployment, asset bubbles, and leverage cycles
• Calculate the effects of monetary stimulus

Module 16: Exchange Rates and International Capital Flows

• Define “foreign exchange market”
• Describe different types of investments like foreign direct investments (FDI), portfolio investments, and hedging
• Explain how appreciating or depreciating currency affects exchange rates
• Identify who benefits from a stronger currency and benefits from a weaker currency
• Explain supply and demand for exchange rates
• Define arbitrage
• Explain purchasing power parity’s importance when comparing countries.
• Explain how exchange rate shifting influences aggregate demand and supply
• Explain how shifting exchange rates also can influence loans and banks
• Differentiate among a floating exchange rate, a soft peg, a hard peg, and a merged currency
• Identify the tradeoffs that come with a floating exchange rate, a soft peg, a hard peg, and a merged currency

Module 17: Government Budgets and Fiscal Policy

• Identify U.S. budget deficit and surplus trends over the past five decades
• Explain the differences between the U.S. federal budget, and state and local budgets
• Differentiate among a regressive tax, a proportional tax, and a progressive tax
• Identify major revenue sources for the U.S. federal budget
• Explain the U.S. federal budget in terms of annual debt and accumulated debt
• Understand how economic growth or decline can influence a budget surplus or budget deficit
• Explain how expansionary fiscal policy can shift aggregate demand and influence the economy
• Explain how contractionary fiscal policy can shift aggregate demand and influence the economy
• Describe how the federal government can use discretionary fiscal policy to stabilize the economy
• Identify examples of automatic stabilizers
• Understand how a government can use standardized employment budget to identify automatic stabilizers
• Understand how fiscal policy and monetary policy are interconnected
• Explain the three lag times that often occur when solving economic problems
• Identify the legal and political challenges of responding to an economic problem
• Understand the arguments for and against requiring the U.S. federal budget to be balanced
• Consider the long-run and short-run effects of a federal budget deficit

Module 18: The Impacts of Government Borrowing

• Explain the national saving and investment identity in terms of demand and supply
• Evaluate the role of budget surpluses and trade surpluses in national saving and investment identity
• Discuss twin deficits as they related to budget and trade deficit
• Explain the relationship between budget deficits and exchange rates
• Explain the relationship between budget deficits and inflation
• Identify causes of recessions
• Apply Ricardian equivalence to evaluate how government borrowing affects private saving
• Interpret a graphic representation of Ricardian equivalence
• Explain crowding out and its effect on physical capital investment
• Explain the relationship between budget deficits and interest rates
• Identify why economic growth is tied to investments in physical capital, human capital, and technology

Module 19: Macroeconomic Policy Around the World

• Analyze GDP per capita as a measure of the diversity of international standards of living
• Identify what classifies a country as low-income, middle-income, or high-income
• Explain how geography, demographics, industry structure, and economic institutions influence standards of living
• Analyze the growth policies of low-income countries seeking to improve standards of living
• Analyze the growth policies of middle-income countries, particularly the East Asian Tigers with their focus on technology and market-oriented incentives
• Analyze the struggles facing economically-challenged countries wishing to enact growth policies
• Evaluate the success of sending aid to low-income countries
• Explain the nature and causes of unemployment
• Analyze the natural rate of unemployment and the factors that affect it
• Identify how undeveloped labor markets can result in the same hardships as unemployment
• Identify the causes and effects of inflation in various economic markets
• Explain the significance of a converging economy
• Explain the meaning of trade balance and its implications for the foreign exchange market
• Analyze concerns over international trade in goods and services and international flows of capital
• Identify and evaluate market-oriented economic reforms

Module 20: International Trade

• Define absolute advantage, comparative advantage, and opportunity costs
• Explain the gains of trade created when a country specializes
• Show the relationship between production costs and comparative advantage
• Identify situations of mutually beneficial trade
• Identify trade benefits by considering opportunity costs
• Identify at least two advantages of intra-industry trading
• Explain the relationship between economies of scale and intra-industry trade
• Explain tariffs as barriers to trade
• Identify at least two benefits of reducing barriers to international trade

Module 21: Globalization and Protectionism

• Explain protectionism and its three main forms
• Analyze protectionism through concepts of demand and supply, noting its effects on equilibrium
• Calculate the effects of trade barriers
• Discuss how international trade influences the job market
• Analyze the opportunity cost of protectionism
• Explain how international trade impacts wages, labor standards, and working conditions
• Explain and analyze various arguments that are in support of restricting imports, including the infant industry argument, the anti-dumping argument, the environmental protection argument, the unsafe consumer products argument, and the national interest argument
• Explain dumping and race to the bottom
• Evaluate the significance of countries’ perceptions on the benefits of growing trade
• Explain the origin and role of the World Trade Organization (WTO) and General Agreement on Tariffs and Trade (GATT)
• Discuss the significance and provide examples of regional trading agreements
• Analyze trade policy at the national level
• Asses the complexity of international trade
• Discuss why a market-oriented economy is so affected by international trade
• Explain disruptive market change