AP Macroeconomics Units

Key Takeaways

• AP Macroeconomics has 6 main units created by the College Board.

• The course explains how large economies (like countries) work and how they make financial decisions.

• Each unit builds on the one before it to help you understand the big picture.

• The class is great preparation for studying business, finance, or economics in college.

Introduction: What Is AP Macroeconomics?

AP Macroeconomics (opens in a new tab) teaches you how whole economies work. It’s not just about small businesses or individual people, that’s microeconomics.

You’ll learn about big topics like:

• How governments make economic decisions.

• What causes unemployment and inflation.

• How countries trade with one another.

These ideas aren’t just theories. They help explain real-life events, like why prices rise or why some countries grow faster than others.

Taking AP Macroeconomics can even earn you college credit. It’s especially helpful if you’re interested in business, finance, or government.

The course is divided into 6 main units, each building on the last, to give you a full picture of how the economy works.

Overview of the 6 AP Macroeconomics Units

The College Board splits AP Macroeconomics into six parts, each with its own goals and weight on the exam.

Unit 1: Basic Economic Concepts

This unit starts with the core idea of economics: making choices because resources are limited. Since people can’t have everything they want, they face scarcity. This leads to opportunity cost, which means the next best thing you give up when you make a choice.

You’ll learn to read your first major graph: the Production Possibilities Curve (PPC). It shows how a country decides what to make with its limited resources.

You’ll also study comparative advantage, which explains how countries benefit from trade, even if one is better at producing everything.

Finally, you’ll learn about different economic systems, like:

• Market economies (run by supply and demand)

• Command economies (run by the government)

Unit 2: Economic Indicators and the Business Cycle

In this unit, you’ll learn how economists measure how well an economy is doing. The most important measure is Gross Domestic Product (GDP) — the total value of everything a country produces.

You’ll also learn about:

• Unemployment types (frictional, structural, and cyclical)

• Inflation, which measures how prices change over time using something called the Consumer Price Index (CPI)

• The difference between real values (adjusted for inflation) and nominal values (not adjusted)

The business cycle explains the ups and downs of the economy, from growth to recession, then back up again.

Unit 3: National Income and Price Determination

This unit introduces two key ideas: aggregate demand (AD) and aggregate supply (AS). Where these two meet is called macroeconomic equilibrium. It decides the overall price level and how much is produced. You’ll also learn about fiscal policy, which is how the government uses spending and taxes to influence the economy.

Unit 4: Financial Sector

This AP Macroeconomics unit explains how money and banks work.

Money has three main jobs:

1. It’s a medium of exchange (you buy stuff with it).

2. It’s a unit of account (it helps measure value).

3. It’s a store of value (you can save it for later).

You’ll learn about two key graphs:

• The loanable funds market, which shows how savings and loans affect interest rates.

• The money market, which shows how the amount of money available affects the economy.

You’ll also study monetary policy, where the Federal Reserve (the U.S. central bank) changes things like interest rates or money supply to help control inflation and employment.

Unit 5: Long-Run Consequences of Stabilization Policies

Now things get more advanced. This unit looks at what happens when governments try to manage the economy over time.

Some of the topics you’ll study include:

• The Phillips Curve

• Economic growth and decline

• Crowding out

• Money growth 

• Inflation

• Government deficits

Unit 6: Open Economy—International Trade and Finance

This final unit connects what you’ve learned in other units to the global economy.

You’ll study:

• The balance of payments (tracking money going in and out of a country)

• Exchange rates (foreign exchange market)

• Economics and changes in policies

• Exports and the market

• Real interest rates

You’ll also explore trade policies like tariffs (taxes on imports) and quotas (limits on imports), and how they affect both countries and consumers.

Frequently Asked Questions

How many units are in AP Macroeconomics?

There are 6 units in total, designed by the College Board to teach you everything from basic ideas to complex economic policies.

Which AP Macroeconomics unit is the hardest?

Many students say Unit 5 is the toughest because it combines lessons from earlier units and introduces tricky policy trade-offs.  Unit 4 can also be tough, since it deals with banking and money supply, which can be abstract at first. However, there are many study guides and other resources like previous exam questions that can help you learn the content of all the units.

Do I need to know graphs for every unit?

Yes! Graphs are important in every unit. You’ll need to know how to draw and label them correctly for the exam.
Some key ones include:

• Production Possibilities Curve

• Aggregate Demand and Supply

• Phillips Curve

• Loanable Funds and Money Market graphs

What's the difference between AP Macro and Micro?

Macroeconomics looks at whole countries and the global economy. Microeconomics focuses on individuals and businesses. Even though the two are connected, they cover different levels of the economy.

How much math is involved in AP Macroeconomics?

Not a ton! You’ll need basic math skills to:

• Calculate percentages

• Use simple formulas

• Read graphs and tables

The math is similar to what you’d see in middle or early high school algebra.

Final Thoughts

The 6 units of AP Macroeconomics fit together like puzzle pieces. Each one adds to your understanding of how economies grow, change, and connect globally.

To do well:

• Focus on understanding the graphs and models.

• Review your notes after each unit.

• Practice explaining key ideas in your own words.

• Use practice questions to see where you need more work.

Remember, this course isn’t just about passing an exam — it’s about learning how the world’s economy actually works. The things you learn here will help you understand news stories, government decisions, and even your own financial future.

Want more help getting ready for your AP exams? Check out the AP study resources available at Save My Exams to boost your AP score. 

Resources

College Board AP Macroeconomics Course Overview (opens in a new tab)