Common Errors in the 2014

AP Macroeconomics Exam

Advanced Placement Economics

Conference, 2014

Federal Reserve Bank of St. Louis

Arthur Raymond

Chief Reader, AP Macroeconomics

Muhlenberg College

Allentown, PA 1

Outline of Discussion

1. The AP Macroeconomics Exam

• Construction • Expectations • Course Redesign

2. The AP Macroeconomics Reading

• The Rubric

• Scoring

3. Top Ten Errors on the 2014 AP Macro Exam 2

AP Macroeconomics Exam: Construction

1. The AP Syllabus Determines Content 2. Submission of Questions 3. The Test Development Committee

Clark Ross, Co-Chair: Davidson College, NC

Patti Brazill, Co-chair: Irondequoit High School, Rochester, NY

Sally Meek, (CBA) Plano West Senior High School, Plano, Texas

Uchenna Elike, Alabama A&M U., Normal, Alabama

Gabriel Sanchez, Bonita High School, La Verne, California

Nora Traum, North Carolina State U., Raleigh, North Carolina

Holly Jones, The Pennington School, Pennington, NJ

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ETS Test Development Specialists

Fekru Debebe

Marwa Hassan

Huanwei Zhao

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Committee in Las Vegas

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Committee Eating

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Committee Working

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AP Macroeconomics Exam: Committee Expectations

• Preliminary Rubric outlined by Committee

• Committee’s Statement on Expected Response “When answering the Macroeconomics or Microeconomics free response questions, a student should respond clearly and concisely. Including paragraphs or even full-sentence responses is not always necessary; however, it is important to address the verb prompts appropriately .”

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The AP Macroeconomics Exam: Expectations – Cont’d

Common Prompts “Show” means to use a diagram to illustrate your answer. Proper labeling of all

elements including the axes of the diagram is necessary to receive full credit. “Explain” means to take the reader through all of the steps or linkages in the line

of economic reasoning. Graphs and symbols are acceptable as part of the explanation. In some cases the “line of economic reasoning can be brief. The student must decide what constitutes an explanation.

“Identify” means to provide a specific answer that might be a list or a label on a

graph, without any explanation or elaboration. “Calculate” means to use mathematical operations to determine a specific

numerical response. In some cases, just the result of a calculation is required; in other cases the process is requested. It is generally better, however, to provide the process in case there is an arithmetic error. The process may receive credit.

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The Macroeconomics Exam: Redesign A redesign of both the Macro and Micro Syllabi and Exams are underway. A Curriculum Development and Assessment Committee (CDAC) one for Micro and one for Macro have been appointed and work is currently underway.

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The AP Macroeconomics Reading: The Rubric

• Day R-3: Meeting of ETS TD Specialists, Question Leaders (QLs), and Chief Reader (CR)

• Day R-2: Meeting I of QLs, Table Leaders (TLs), and CR

• Day R-1: Meeting II of QLs, TLs, and CR

(Crossing the “Rubricon”)

• Day R 1 Meeting of QLs, TLs, and Readers

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The AP Macroeconomics Reading: The Scoring

• Sample Scoring

• Round Robin Scoring

• Live Scoring

• TL to Reader Checks

• Continuous Statistical Monitoring

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Raw Material

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Uche Says

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http://professionals.collegeboard.com/prof-dev/opportunities/become-ap-reader

Error Number 10 Question 1 (e)

Based on the real interest rate change in part (d), what is the effect on the long-run economic growth rate? (The real interest rate increased due to an increase in government borrowing to finance spending.)

Decrease 15

Error Number 9 Question 1 (c)

If the marginal propensity to consume is equal to 0.75, calculate the maximum possible change in real gross domestic product that could result from the $100 billion increase in government spending.

$400 billion 16

Error Number 8 Question 2 (a) (i)

Assume that the Federal Reserve targets a lower federal funds rate. (i) Which open market operation can the Federal Reserve use to achieve the lower target?

Buy Bonds 17

Error Number 7

Question 3 (b) (ii) Based on the change in United States exports in

part (a), answer each of the following. (i) Will the United States current account balance remain at zero,

be in surplus, or be in deficit?

(ii) What will happen to real gross domestic product in the United States in the short run? Explain.

(Exports Increased)

Increase because an increase in exports increases aggregate demand. 18

Error Number 6 Question 3 (c)

The South Korean currency is the won. Draw a correctly labeled graph of the foreign exchange market for the United States dollar. Show the effect of the lower inflation rate in the United States on the won price per United Stated dollar. There are two points. One for a proper graph and one for showing shift and effect on won price per US dollar. This point is about the latter.

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Error Number 6 Question 3 (c) - Continued

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e=Won/US $

Q of $

S of $

D for $

e1

e2

D’ for $

Also correct is a decrease in supply, or both.

Error Number 5 Question 1 (f)

Now assume that instead of financing the $100 billion increase in government spending by borrowing, the United States government increases taxes by $100 billion. With this equal increase in government spending and taxes, will the real gross domestic product increase, decrease, or remain the same? Explain.

Increase

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Error Number 4 Question 2 (c)

Assume that the Federal Reserve buys government bonds from commercial banks. Based only on this transaction, will the level of required reserves in the commercial banks increase, decrease, or remain the same?

Remain the same

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Error Number 3 Question 2 (d)

Another monetary policy action involves the discount rate. Define the discount rate. The discount rate is the interest rate charged by the Federal Reserve to commercial banks

for funds borrowed from the Federal Reserve.

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Error Number 2 Question 1 (f)

Now assume that instead of financing the $100 billion increase in government spending by borrowing, the United States government increases taxes by $100 billion. With this equal increase in government spending and taxes, will the real gross domestic product increase, decrease, or remain

the same? Explain.

Real GDP increases because the multiplier for government spending is larger than the

multiplier for taxes. 24

Error Number 1 Question 1 (e)

Based on the real interest rate change in part (d), what is the

effect on the long-run economic growth rate? Explain. (The real interest rate increased due to an increase in government borrowing to finance spending.)

The economic growth rate decreases because a higher real interest rate reduces the growth rate of the capital stock.

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