AP Macroeconomics: 250 Key Terms and Their Directions
Most free-response points come from naming a direction and a mechanism, not from a number.
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| 表 | 裏 |
|---|---|
| Scarcity — what is it? | The condition that wants exceed the resources available to satisfy them. It is why every economy must choose, and why every choice has a cost. |
| Demand — what is it? | The quantities of a good buyers are willing and able to buy at each price. It slopes downward because of the substitution and income effects. |
| Factors of production — what is it? | The inputs used to produce goods and services: land, labour, capital and entrepreneurship. Each earns a return: rent, wages, interest and profit. |
| Human capital — what is it? | The skills, education and health embodied in workers. Investment in it raises labour productivity and long-run growth. |
| Gross domestic product — what is it? | The market value of all final goods and services produced within a country in a period. It is the headline measure of output and the base for growth and per-capita comparisons. |
| Final good — what is it? | A good bought by its end user rather than used to produce something else. Only final goods enter GDP. |
| Consumer price index — what is it? | A measure of the cost of a fixed basket of goods bought by a typical household. It is the standard measure for consumer inflation and for indexing payments. |
| Labour force — what is it? | People of working age who are employed or actively seeking work. It is the denominator of the unemployment rate. |
| Business cycle — what is it? | The pattern of expansion, peak, contraction and trough in real output. Unemployment falls in expansions and rises in contractions. |
| Aggregate demand — what is it? | The total quantity of real output buyers want at each price level. It is the sum of consumption, investment, government purchases and net exports. |
| Short-run aggregate supply — what is it? | The total output firms produce at each price level while input prices are fixed. It slopes upward because nominal wages and other input prices adjust slowly. |
| Marginal propensity to consume — what is it? | The fraction of an additional unit of disposable income that is spent. It determines the size of the spending multiplier. |
| Wage price spiral — what is it? | A cycle in which rising prices lead to higher wage demands, which raise costs and prices again. It makes inflation persistent once it becomes expected. |
| Demand shock — what is it? | A sudden shift in aggregate demand. It moves output and the price level in the same direction. |
| Classical range — what is it? | The vertical portion of the aggregate supply curve at full capacity. Demand increases raise prices with no rise in output. |
| Functions of money — what is it? | Serving as a medium of exchange, a unit of account and a store of value. The medium of exchange function is what removes the need for a double coincidence of wants. |
| Fractional reserve banking — what is it? | A system in which banks hold only part of deposits as reserves and lend the rest. It is what allows the banking system to create money. |
| Demand for money — what is it? | The amount of wealth people wish to hold in liquid form at each interest rate. It slopes down because the interest rate is the opportunity cost of holding money. |
| Central bank — what is it? | The institution responsible for monetary policy and the stability of the financial system. It controls the money supply and acts as lender of last resort. |
| Fiscal policy — what is it? | Government use of spending and taxation to affect aggregate demand. It is decided by the legislature rather than the central bank. |
| Supply-side policy — what is it? | Policy aimed at raising long-run aggregate supply rather than demand. Investment in infrastructure, education and research shifts the long-run curve right. |
| Inflation targeting — what is it? | A framework in which the central bank commits publicly to a numerical inflation goal. It anchors expectations, which makes the short-run Phillips curve more favourable. |
| Recognition lag — what is it? | The delay before policymakers know a shock has occurred. Data arrive late and are revised, so the state of the economy is uncertain in real time. |
| Deficit financing — what is it? | Funding a budget deficit by issuing government debt. It raises demand in the loanable funds market and can push up real interest rates. |
| Transfer payment — what is it? | A government payment made without any good or service in exchange. Pensions and unemployment benefits are examples. They affect demand through recipients' spending. |
| Balance of payments — what is it? | A record of all transactions between a country and the rest of the world. It is divided into the current account and the financial account. |
| Exchange rate — what is it? | The price of one currency in terms of another. It is determined in the foreign exchange market by supply and demand for currencies. |
| Purchasing power parity — what is it? | The idea that exchange rates should equalise the price of the same basket across countries. It is a useful long-run benchmark for whether a currency is over or undervalued. |
| Currency reserves — what is it? | Foreign currency assets held by a central bank. They are used to intervene in the foreign exchange market and defend a peg. |
| Gains from trade — what is it? | The increase in total consumption made possible by specialisation and exchange. They arise from differences in opportunity cost between producers. |
このデッキについて
The hard part of macro is not the vocabulary. It is knowing which way a curve moves and why. A student who can define crowding out still loses the point if they cannot say that government borrowing raises the real interest rate, which lowers investment, which offsets part of the fiscal expansion. The same is true of a supply shock: prices and output move in opposite directions, so no single demand policy fixes both, and the question is which one you are willing to give up. This deck is 250 cards, one term per card, with the back giving the definition and, where it applies, a line on why it matters: the direction it moves in a model. The sections follow the shape of the course: basic concepts, economic indicators, national income and price determination, the financial sector, stabilisation and debt, and the open economy. Numbers are deliberately scarce. Where a figure is part of a definition, such as the components of GDP or the money multiplier, it is on the card. Where it is a country's current statistic, it is not, because a memorised figure goes stale while the mechanism does not. Once the deck is on a spaced-repetition schedule, the terms you can already place stop coming back and the ones whose direction you keep reversing return until they stop being a coin flip.
よくある質問
- What is in each section of the deck?
- Basic concepts has 35 cards, economic indicators 45, national income and price determination 45, the financial sector 50, stabilisation and debt 40, and the open economy 35, for 250 in total. Every card carries section and subtopic tags, so you can drill only the money market, only fiscal policy, or only the external accounts.
- Does the deck cover graphs and models?
- It covers what the graphs mean rather than the drawings themselves. Cards state which curve shifts, in which direction, and what happens to output and the price level, including the cases where the result is genuinely ambiguous because two curves move at once. Drawing practice still has to happen on paper, but the direction and the mechanism are here.
- Is this useful outside the AP course?
- Yes. The vocabulary is standard introductory macroeconomics, so it transfers to a first university course or to reading economic coverage. The section order follows the AP units, which makes it easy to align with a class, but nothing on the cards depends on the exam format.
- Can I import the whole deck on the free plan?
- Yes. Importing a saved deck runs no new AI generation and does not use your AI allowance, so the free plan imports all 250 cards. You can study, edit and delete them afterwards.
- Will importing it twice create duplicates?
- No. Cards you already have are skipped and only cards added in a revision come through. Including re-imports after deleting it, one official deck can be imported three times per account.
- Can I use it on the web and in the mobile app?
- Yes. The deck is added to your account rather than to a device, so the same cards and the same progress are there on the web, on iOS and on Android.
- Can I edit the cards after importing?
- Yes. Imported cards are yours: you can edit both sides, delete cards you do not need, change tags, and move cards to another deck.
No official exam questions are reproduced. Every card was written for this deck.Advanced Placement is a trademark of College Board. This deck is not produced, endorsed or approved by College Board.Editorial reference date 2026-08-30.