The exam at a glance
| Section | Weight | Timing | What you do |
|---|---|---|---|
| I · Multiple choice | about 66% | 1 hr 10 min · 60 questions | Define principles, explain outcomes and determine the results of scenarios, often using graphs and tables. |
| II · Free response | about 33% | 1 hr, including a 10-min reading period · 3 questions | 1 long question (half of the section score) and 2 short questions (a quarter each). Make assertions, explain, calculate and draw graphs. |
Click in Bluebook, write on paper
You answer multiple-choice questions and read the free-response questions in the Bluebook app, then handwrite free-response answers (and draw graphs) in a paper booklet.
Four-function calculator allowed
A four-function calculator is permitted on both sections. Most calculations are simple; the hard part is knowing which formula applies.
The multiple-choice section
60 questions in 70 minutes gives you 1 minute 10 seconds per question. Sketch a quick graph in the scratch area for any shift question. Wrong answers lose no points.
Strategies that work
- Draw the graph for every shift question, even a rough one, and label which curve moves.
- Separate shifts from movements: a price change moves along a curve; other factors shift it.
- Watch "ceteris paribus": change only what the question says changed.
- Use formulas quickly and estimate where you can.
- Check signs and directions: an increase vs a decrease is where most errors happen.
- Move on at 90 seconds and come back to flagged questions.
The 6 units, in plain English
Basic Economic Concepts
Scarcity and markets.
Be ready to: Explain scarcity and opportunity cost; production possibilities curves; comparative advantage; supply, demand and market equilibrium.
Economic Indicators & the Business Cycle
Measuring the economy.
Be ready to: Calculate GDP, real vs nominal GDP and the GDP deflator; the unemployment rate and its types; CPI and inflation; describe the business cycle.
National Income & Price Determination
Aggregate demand and supply.
Be ready to: Use aggregate demand and supply; short-run and long-run equilibrium; spending and tax multipliers; recessionary and inflationary gaps; fiscal policy.
Financial Sector
Money, banks and the central bank.
Be ready to: Explain money and its functions; bank balance sheets and the money multiplier; the money market and loanable funds market; monetary policy tools.
Long-Run Consequences of Stabilization Policies
What policy does over time.
Be ready to: Combine fiscal and monetary policy; the Phillips curve; money growth and inflation; government deficits, debt and crowding out; economic growth.
Open Economy: International Trade & Finance
Trade and currencies.
Be ready to: Use balance of payments accounts; the foreign exchange market; how interest rates and policy affect exchange rates and net exports.
Units 3–5 make up most of the exam, so master the AD-AS and money market graphs first. Graphs to draw from memory: PPC, AD-AS, the money market, loanable funds, the Phillips curve, foreign exchange, and supply and demand.
The 3 free-response questions
One hour, including a 10-minute reading period, for 1 long and 2 short questions. The long question is half of the free-response score and each short question a quarter. Graphs earn many of the points.
Long question
A multi-part scenario, usually about an economy in a recession or inflationary gap. Draw AD-AS, choose a policy, and trace its effects through the money market, loanable funds or foreign exchange.
Draw one large, clearly labeled graph and reuse it for later parts.
Two short questions
Focused questions on one area, such as a bank balance sheet calculation, the Phillips curve or the foreign exchange market.
Each part asks for one thing. Answer it directly, then explain.
Graph rules
Label both axes, every curve, and equilibrium values (P₁, Q₁). Show shifts with arrows and new labels (P₂, Q₂).
An unlabeled graph usually earns no points, even if it is shaped correctly.
Show the cause
When asked to explain, give the economic reason, not just the result: "because the cost of borrowing falls…".
Results alone earn the "identify" point but not the "explain" point.
Time plan: 10 minutes of reading, about 25 minutes for the long question and 12–13 minutes for each short one. Use the reading period to plan graphs.
Habits that earn points
- Label every axis, curve and equilibrium.
- Show shifts with arrows and new labels (P₂, Q₂).
- Answer each part separately and in order.
- Explain the cause, not just the result.
- Stuck? A correctly labeled graph still earns points.
10 traps that cost points
Fiscal vs monetary
Fiscal policy is government spending and taxes (Congress and the President). Monetary policy is the money supply and interest rates (the Fed).
Nominal vs real
Real values adjust for inflation. Real interest rate ≈ nominal rate − inflation.
Movement vs shift of AD
A change in the price level moves along AD. Changes in C, I, G or net exports shift it.
Money market vs loanable funds
The money market sets the nominal rate (money supply and demand). Loanable funds sets the real rate (saving and borrowing).
Money multiplier
Money multiplier = 1 ÷ reserve requirement. It applies to excess reserves, not total deposits.
Tax multiplier
The tax multiplier is −MPC/MPS, smaller in absolute value than the spending multiplier.
Long-run vs short-run Phillips curve
The long-run Phillips curve is vertical at the natural rate of unemployment.
Crowding out
Government borrowing raises the real interest rate in the loanable funds market, reducing private investment.
Appreciation effects
A stronger currency makes exports more expensive and imports cheaper, so net exports fall.
Unlabeled graphs
An unlabeled or mislabeled graph usually earns no points.
A study roadmap to May
A steady plan beats a last-minute rush. Shift the months to match your teacher's pacing.
- Sep – Oct
Units 1–2: foundations
Scarcity, PPCs, supply and demand, GDP, unemployment and inflation.
- Nov – Dec
Unit 3: AD-AS
Aggregate demand and supply, gaps, multipliers and fiscal policy. Draw AD-AS from memory daily.
- Jan – Feb
Unit 4: money
Banks, money creation, the money market and monetary policy. Start one free-response question per week.
- Mar – Apr
Units 5–6: policy and the open economy
The Phillips curve, deficits, crowding out and exchange rates. Begin full timed sections.
- Early May
Graph drills
Draw all seven graphs from memory and trace policy chains. Review the traps list.
- May 2027
Exam day
Friday, May 7, 2027 (afternoon session). Sleep well and confirm your start time with your AP coordinator.
3 practice questions
Original questions written by ACT SAT GO in the style of the exam. The free PDF has 10, with full explanations.
- Unit 3 · Multipliers
If the MPC is 0.8, what is the maximum change in real GDP from a $20 billion increase in taxes?
- A An $80 billion decrease
- B A $100 billion decrease
- C A $20 billion decrease
- D A $16 billion decrease
Show answer
Answer: A. Tax multiplier = −MPC/MPS = −0.8/0.2 = −4, and −4 × $20 billion = an $80 billion decrease. Choice B uses the spending multiplier.
- Unit 4 · Money creation
A bank receives a $1,000 cash deposit. The reserve requirement is 10%. What is the maximum increase in the money supply from new loans across the banking system?
- A $900
- B $1,000
- C $9,000
- D $10,000
Show answer
Answer: C · $9,000. Required reserves are $100, so excess reserves are $900. The money multiplier is 1/0.1 = 10, so $900 × 10 = $9,000 in new loans. (The $1,000 deposit itself doesn't change M1.)
- Unit 6 · Exchange rates
If U.S. interest rates rise relative to other countries', what happens to the U.S. dollar and net exports?
- A The dollar depreciates; net exports rise
- B The dollar appreciates; net exports rise
- C There is no effect on the dollar
- D The dollar appreciates; net exports fall
Show answer
Answer: D. Higher interest rates attract foreign financial investment, increasing demand for dollars. The dollar appreciates, making exports dearer and imports cheaper.
How students score
Ranges reflect recent College Board score distributions and shift a little each year. Credit and placement policies vary by college.
Aiming for a 5 in AP Macroeconomics?
Book a free diagnostic session. We'll find your weakest units, review your practice responses and give you a week-by-week plan to exam day.