CLEP 
Principles of Macroeconomics
College · CLEP Principles of Macroeconomics · Certificate available
484 lessons 5.5h runtime 18 units 689 links between lessons Test yourself · 18 quizzes, a mid exam, and a final
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Begin with Unit 1: Economics, Scarcity, and Choice. It sets the foundation for everything that follows.
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Unit 1: Economics, Scarcity, and Choice 30 lessons, 2 lecture parts
- 0001 What Economics Studies
- 0002 Scarcity and the Three Questions
- 0003 Opportunity Cost
- 0004 Division of Labor
- 0005 Why Specialization Raises Output
- 0006 Specialization Requires Trade
- 0007 Factors of Production
- 0008 Microeconomics and Macroeconomics
- 0009 The Three Macroeconomic Goals
- 0010 Monetary Policy and Fiscal Policy
- 0011 Theories, Models and Ceteris Paribus
- 0012 The Circular Flow
- 0013 Tracing a Payment Around the Circular Flow worked example
- 0014 Three Ways to Organize an Economy
- 0015 Placing an Economy on the Spectrum worked example
- 0016 Globalization, Exports and Imports
- 0017 The Budget Constraint
- 0018 Opportunity Cost from Two Prices worked example
- 0019 Marginal Analysis and Diminishing Utility
- 0020 Sunk Costs
- 0021 The Production Possibilities Frontier
- 0022 Why the Frontier Bows Outward
- 0023 Efficiency and Full Employment
- 0024 Growth Shifts the Frontier
- 0025 On, Inside or Outside the Frontier worked example
- 0026 Absolute and Comparative Advantage
- 0027 Comparative Advantage from a Table worked example
- 0028 Positive or Normative worked example
- 0029 Reading a Straight Line worked example
- 0030 Where Opportunity Cost Keeps Turning Up review
Unit 2: Demand, Supply, and Markets 38 lessons, 2 lecture parts
- 0101 What a Market Is
- 0102 Demand and Quantity Demanded
- 0103 The Law of Demand
- 0104 Supply and Quantity Supplied
- 0105 The Law of Supply
- 0106 Equilibrium
- 0107 Surplus and Shortage
- 0108 Finding Equilibrium from a Schedule worked example
- 0109 Solving a Market with Algebra worked example
- 0110 Shift versus Movement Along
- 0111 Income: Normal and Inferior Goods
- 0112 Substitutes or Complements? worked example
- 0113 Tastes, Population and Buyer Expectations
- 0114 What Shifts Supply
- 0115 Seller Expectations and the Number of Sellers
- 0116 The Four-Step Process
- 0117 Which Curve Shifts, and Which Way worked example
- 0118 When Both Curves Shift worked example
- 0119 Price Controls
- 0120 Price Ceilings
- 0121 Price Floors
- 0122 Binding or Not worked example
- 0123 Rent Control
- 0124 The Minimum Wage
- 0125 Agricultural Price Supports
- 0126 Why a Binding Ceiling Can Leave Buyers Worse Off review
- 0127 Consumer and Producer Surplus
- 0128 Deadweight Loss
- 0129 Who Gains and Who Loses from a Control worked example
- 0130 Prices Carry Information
- 0131 The Labor Market
- 0132 The Loanable Funds Market
- 0133 What Shifts Saving and Borrowing
- 0134 Loanable Funds: Which Curve Shifts worked example
- 0135 Bond Prices and Interest Rates
- 0136 Computing a Bond's Interest Rate worked example
- 0137 Usury Laws as a Price Ceiling
- 0138 One Model, Three Markets review
Unit 3: Measuring the Macroeconomy 24 lessons, 1 lecture part
Lecture: Watch · 33:44
- 0201 What GDP Measures
- 0202 The Expenditure Approach
- 0203 Consumption
- 0204 Investment Means New Capital
- 0205 Government Purchases and Transfer Payments
- 0206 Net Exports
- 0207 Computing GDP from Components worked example
- 0208 Final and Intermediate Goods
- 0209 Value Added
- 0210 What GDP Leaves Out
- 0211 Is It Counted in GDP? worked example
- 0212 The Expanded Circular Flow
- 0213 Income Equals Output
- 0214 GDP, GNP and NNP
- 0215 Nominal and Real
- 0216 The GDP Deflator
- 0217 Nominal to Real worked example
- 0218 Computing a Growth Rate worked example
- 0219 The Business Cycle
- 0220 Recession
- 0221 Placing a Moment on the Business Cycle worked example
- 0222 GDP per Capita and PPP
- 0223 Reading a Series Honestly worked example
- 0224 What GDP Does and Does Not Tell You review
Unit 4: Economic Growth 24 lessons, 1 lecture part
Lecture: Watch · 33:30
- 0301 Modern Economic Growth Is Recent
- 0302 The Industrial Revolution
- 0303 Two Percent a Year
- 0304 Compound Growth worked example
- 0305 The Rule of 72 worked example
- 0306 Labor Productivity
- 0307 Productivity or Participation? worked example
- 0308 The Aggregate Production Function
- 0309 Physical Capital
- 0310 Human Capital
- 0311 Technology: Invention and Innovation
- 0312 Capital Deepening
- 0313 Capital Deepening or Technological Change? worked example
- 0314 Growth Accounting
- 0315 Growth Requires Forgoing Consumption
- 0316 Does Technology Destroy Jobs?
- 0317 Institutions, the Rule of Law and Property Rights
- 0318 A Climate for Growth
- 0319 Which Policy Raises Long-Run Growth? worked example
- 0320 Convergence
- 0321 Why Convergence Might Happen
- 0322 Why Convergence Is Not Guaranteed
- 0323 Reading a Convergence Claim worked example
- 0324 Will Poor Countries Catch Up? review
Unit 5: Unemployment 24 lessons, 1 lecture part
Lecture: Watch · 33:50
- 0401 Why Unemployment Matters
- 0402 The Three Categories
- 0403 The Labor Force
- 0404 The Unemployment Rate
- 0405 The Participation Rate
- 0406 Computing the Rates worked example
- 0407 Classifying a Person worked example
- 0408 Discouraged and Marginally Attached Workers
- 0409 The Alternative Measures
- 0410 Two Surveys
- 0411 Patterns in the Data
- 0412 Comparing Countries
- 0413 Cyclical Unemployment
- 0414 Why Wages Are Sticky Downward review
- 0415 Frictional Unemployment
- 0416 Structural Unemployment
- 0417 Which Type of Unemployment? worked example
- 0418 The Natural Rate
- 0419 Full Employment and Potential GDP
- 0420 Reading the Rate Against the Natural Rate worked example
- 0421 What Moves the Natural Rate
- 0422 Unemployment Insurance
- 0423 Reading an Unemployment Statistic worked example
- 0424 Which Remedy Fits? worked example
Unit 6: Inflation 24 lessons, 1 lecture part
Lecture: Watch · 33:59
- 0501 What Inflation Is
- 0502 Not a Relative Price Change
- 0503 The Basket and the Price Level
- 0504 Index Numbers
- 0505 Building a Price Index worked example
- 0506 Computing the Inflation Rate worked example
- 0507 The Consumer Price Index
- 0508 Why a Fixed Basket Overstates
- 0509 Core Inflation
- 0510 Other Price Indices
- 0511 Which Index Fits? worked example
- 0512 Nominal and Real Values
- 0513 Converting a Nominal Wage worked example
- 0514 The Real Interest Rate
- 0515 Computing the Real Interest Rate worked example
- 0516 Who Gains and Who Loses
- 0517 Blurred Price Signals
- 0518 Deflation
- 0519 Hyperinflation
- 0520 Demand-Pull Inflation
- 0521 Cost-Push Inflation
- 0522 Which Kind of Inflation? worked example
- 0523 Indexing
- 0524 Why Economists Worry Less Than the Public review
Unit 7: Trade Balances and Capital Flows 18 lessons, 1 lecture part
Lecture: Watch · 30:08
- 0601 The Trade Balance
- 0602 The Current Account
- 0603 The Three Accounts
- 0604 Computing the Current Account worked example
- 0605 A Deficit Means Borrowing
- 0606 The Balance of Payments Identity
- 0607 In or Out? worked example
- 0608 The Saving and Investment Identity
- 0609 Applying the Identity worked example
- 0610 The Trade Balance Is Macroeconomic
- 0611 What Moves Net Exports
- 0612 Borrowing That Pays
- 0613 Borrowing That Fails
- 0614 Sudden Stops
- 0615 Surpluses Are No Guarantee
- 0616 Level of Trade and Balance of Trade
- 0617 Reading a Trade Statistic worked example
- 0618 When Is a Trade Deficit Healthy? review
Unit 8: Aggregate Demand and Aggregate Supply 28 lessons, 2 lecture parts
- 0701 Say's Law and Keynes' Law
- 0702 The Axes of the Model
- 0703 Aggregate Demand
- 0704 Why Aggregate Demand Slopes Down
- 0705 Why Micro Reasoning Does Not Transfer
- 0706 Short-Run Aggregate Supply
- 0707 Potential GDP and Long-Run Aggregate Supply
- 0708 The Short Run and the Long Run
- 0709 Why the Short-Run Curve Slopes Up
- 0710 Macroeconomic Equilibrium
- 0711 Finding Equilibrium from a Schedule worked example
- 0712 Movement Along or a Shift? worked example
- 0713 What Shifts Aggregate Demand
- 0714 Why Imports Are Subtracted
- 0715 What Shifts Short-Run Aggregate Supply
- 0716 Productivity Shifts Both Curves
- 0717 Which Curve, Which Way? worked example
- 0718 Stagflation
- 0719 Reading the Result worked example
- 0720 The Three Zones
- 0721 Naming the Zone worked example
- 0722 Recessionary and Inflationary Gaps
- 0723 Gap or No Gap? worked example
- 0724 Self-Correction
- 0725 Nonintervention or Stabilization
- 0726 Expansionary and Contractionary Policy
- 0727 Demand-Pull and Cost-Push in the Diagram review
- 0728 One Shock, Two Stories review
Unit 9: The Keynesian Perspective 38 lessons, 2 lecture parts
- 0801 Firms Produce What They Expect to Sell
- 0802 Aggregate Demand May Be Too Low
- 0803 Sticky Wages and Sticky Prices
- 0804 The Coordination Problem and Menu Costs
- 0805 The Macroeconomic Externality
- 0806 The Consumption Function
- 0807 The Marginal Propensity to Consume
- 0808 Marginal, Not Average
- 0809 Saving, and the Two Propensities
- 0810 Building Consumption and Saving Schedules worked example
- 0811 What Shifts the Consumption Function
- 0812 Current Income or Permanent Income
- 0813 Testing the Two Hypotheses
- 0814 How Large Is the Propensity to Consume
- 0815 Output Is Also Income
- 0816 The 45-Degree Line
- 0817 Autonomous and Induced Spending
- 0818 Sorting the Components worked example
- 0819 Stacking the AE Line
- 0820 Why That Point and No Other
- 0821 Planned and Unplanned Investment
- 0822 Building an AE Schedule and Finding Equilibrium worked example
- 0823 Solving for Equilibrium Algebraically worked example
- 0824 The Multiplier, Round by Round
- 0825 The Multiplier Formula
- 0826 Leakages Set the Size worked example
- 0827 The Tax Multiplier
- 0828 Spending Against an Equal Tax Change worked example
- 0829 Shift or Rotation worked example
- 0830 The Two Gaps, Measured
- 0831 Sizing the Policy That Closes a Gap worked example
- 0832 Why Closing a Gap Takes Less Than the Gap review
- 0833 How Large Are Multipliers in Practice
- 0834 From Expenditure to Aggregate Demand
- 0835 Where Is the Price Level review
- 0836 The Short-Run Phillips Curve
- 0837 Along the Curve or a Shift worked example
- 0838 Why the Phillips Menu Failed review
Unit 10: The Neoclassical Perspective 18 lessons, 1 lecture part
Lecture: Watch · 31:10
- 0901 The Neoclassical Starting Point
- 0902 Wages and Prices Are Flexible Over Time
- 0903 Full Employment Is Not Zero Unemployment
- 0904 The Vertical Long-Run Supply Curve
- 0905 Working the Self-Correction Sequence worked example
- 0906 Output Above Potential Cannot Last
- 0907 Rational and Adaptive Expectations
- 0908 How Long Is the Short Run
- 0909 The Long-Run Phillips Curve Is Vertical
- 0910 Short Run or Long Run worked example
- 0911 Reading a Natural Rate from Data worked example
- 0912 Inflation in the Long Run
- 0913 Lowering the Natural Rate
- 0914 Frictional Unemployment and the Job Search
- 0915 Structural Unemployment and Mismatch
- 0916 The Case Against Fine-Tuning
- 0917 Name the Lag worked example
- 0918 Two Horses, One Economy review
Unit 11: Money and Banking 22 lessons, 1 lecture part
Lecture: Watch · 35:09
- 1001 Banks as Financial Intermediaries
- 1002 Barter and the Double Coincidence of Wants
- 1003 The Functions of Money
- 1004 Commodity, Commodity-Backed and Fiat Money
- 1005 Gresham's Law
- 1006 Liquidity Orders the Measures
- 1007 M1 and M2
- 1008 M1, M2 or Neither worked example
- 1009 Cards Are Not Money
- 1010 The Bank Balance Sheet
- 1011 Building a T-Account and Testing Solvency worked example
- 1012 Required and Excess Reserves
- 1013 Fractional Reserve Banking
- 1014 Lending Creates Money
- 1015 Following a Deposit Through the Banking System worked example
- 1016 The Money Multiplier
- 1017 Computing the Maximum Change worked example
- 1018 Why the Real Change Is Smaller
- 1019 The Reserve Requirement Is Now Zero
- 1020 How Banks Fail
- 1021 Why Did This Bank Fail worked example
- 1022 How Banks Create Money, and What Limits It review
Unit 12: Monetary Policy and Bank Regulation 36 lessons, 2 lecture parts
- 1101 What a Central Bank Does
- 1102 The Structure of the Federal Reserve
- 1103 The FOMC
- 1104 Independence, and Why It Is Contested
- 1105 Bank Regulation: Three Arms
- 1106 Deposit Insurance and Lender of Last Resort
- 1107 Why Hold Money at All
- 1108 The Three Motives
- 1109 The Interest Rate Is the Price of Holding Money
- 1110 The Money Demand Curve
- 1111 What Shifts Money Demand worked example
- 1112 The Money Supply Curve and Equilibrium
- 1113 Working a Change in the Money Market worked example
- 1114 Open Market Operations
- 1115 Walking a Balance Sheet Through a Purchase worked example
- 1116 Walking a Balance Sheet Through a Sale worked example
- 1117 Where the Money Supply Actually Changes
- 1118 The Discount Rate and the Discount Window
- 1119 The Federal Funds Rate
- 1120 Reserve Requirements as a Tool
- 1121 Which Tool, Which Direction worked example
- 1122 From Limited to Ample Reserves
- 1123 Interest on Reserve Balances
- 1124 How IORB Moves the Federal Funds Rate
- 1125 Quantitative Easing
- 1126 The Transmission Chain
- 1127 Tracing a Policy Through to Output and Prices worked example
- 1128 Expansionary and Contractionary Stances
- 1129 Fighting Inflation: Which Action worked example
- 1130 Velocity and the Equation of Exchange
- 1131 Computing Velocity and Solving the Equation worked example
- 1132 The Quantity Theory in the Long Run
- 1133 Why Velocity Is Not Stable in the Short Run
- 1134 Real Rates and the Zero Lower Bound worked example
- 1135 Why Expansionary Monetary Policy Can Fail review
- 1136 Two Regimes, One Institution review
Unit 13: Exchange Rates and International Capital Flows 22 lessons, 1 lecture part
Lecture: Watch · 35:36
- 1201 An Exchange Rate Is a Price
- 1202 Who Demands and Who Supplies a Currency
- 1203 Every Trade Is Two-Sided
- 1204 Appreciation and Depreciation
- 1205 Converting at a Rate, Before and After worked example
- 1206 Who Gains and Who Loses from a Stronger Currency
- 1207 Stronger Is Not Better
- 1208 Direct and Portfolio Investment
- 1209 Hedging
- 1210 Expectations Move the Rate First
- 1211 Relative Rates of Return
- 1212 Relative Inflation
- 1213 Which Way Does the Currency Move worked example
- 1214 Purchasing Power Parity
- 1215 Market Rate or PPP: Which to Use worked example
- 1216 Exchange Rates and Aggregate Demand
- 1217 The Currency Mismatch
- 1218 Four Exchange Rate Regimes
- 1219 Two Ways a Central Bank Moves the Rate
- 1220 A Peg Away from the Market Rate worked example
- 1221 Classifying a Regime worked example
- 1222 Why a Strong Currency Is Not Good News for Everyone review
Unit 14: Government Budgets and Fiscal Policy 30 lessons, 2 lecture parts
- 1301 Deficit, Surplus, Balanced Budget
- 1302 The Deficit Is Not the Debt
- 1303 Computing Deficits and the Debt worked example
- 1304 Measuring Against GDP
- 1305 Where the Money Goes
- 1306 State and Local Budgets Work Differently
- 1307 The Debt Ratio Can Fall While Debt Rises worked example
- 1308 Three Tax Structures
- 1309 Classifying a Tax from a Table worked example
- 1310 Marginal Is Not Average
- 1311 Where Federal Revenue Comes From
- 1312 Taxes Reach the Economy Three Ways
- 1313 Fiscal Policy Shifts Aggregate Demand
- 1314 Three Expansionary Channels
- 1315 Spending or Taxes: The Model Does Not Choose
- 1316 Which Action, and Which Way worked example
- 1317 A Spending Change Moves More
- 1318 The Limit of Fiscal Policy
- 1319 Supply-Side Economics
- 1320 Discretionary and Automatic
- 1321 How Stabilisers Work
- 1322 Automatic or Discretionary worked example
- 1323 The Standardised Employment Budget
- 1324 Reading the Gap Between Two Budgets worked example
- 1325 The Three Lags
- 1326 Name the Lag, Fiscal Version worked example
- 1327 Temporary Against Permanent
- 1328 The Policy Mix
- 1329 Why Discretionary Fiscal Policy Disappoints review
- 1330 The Balanced Budget Question review
Unit 15: The Impacts of Government Borrowing 20 lessons, 1 lecture part
Lecture: Watch · 35:27
- 1401 Three Places the Money Can Come From
- 1402 The Identity That Governs Everything
- 1403 Applying the Identity worked example
- 1404 Crowding Out, Stated Precisely
- 1405 Gross and Net Investment
- 1406 Working the Crowding-Out Chain worked example
- 1407 Crowding In
- 1408 When Crowding Out Is Suspended
- 1409 From Budget Deficit to Trade Deficit
- 1410 Tracing the Chain Through the Exchange Rate worked example
- 1411 Twin Deficits Are Cousins
- 1412 Ricardian Equivalence
- 1413 What the Evidence Shows
- 1414 The Policy Mix, Second Pass
- 1415 Severe or Slight worked example
- 1416 Government Can Invest Too
- 1417 Public Physical Capital
- 1418 Human Capital and Technology
- 1419 Public or Private, and Which Kind worked example
- 1420 Does Government Borrowing Hurt Growth review
Unit 16: Macroeconomic Policy Around the World 18 lessons, 1 lecture part
Lecture: Watch · 33:34
- 1501 The Same Recipe, Different Starting Points
- 1502 Measuring Income Across Countries
- 1503 The Four Income Groups
- 1504 Size Is Not Standard of Living
- 1505 Growth and Development Are Not the Same
- 1506 Which Determinant Is Binding worked example
- 1507 Doubling Time and the Convergence Gap worked example
- 1508 The Malthusian Trap
- 1509 Why the Trap Did Not Close
- 1510 The Demographic Transition
- 1511 Dependency Theory and Import Substitution
- 1512 Why Import Substitution Failed
- 1513 Cyclical or Natural Rate
- 1514 Diagnose the Unemployment worked example
- 1515 Outside the Wage Labour Market
- 1516 Inflation Where It Is Not Solved
- 1517 Trace a Hyperinflation worked example
- 1518 The Four Goals as Four Coordination Failures review
Unit 17: International Trade and Protectionism 30 lessons, 2 lecture parts
- 1601 Trade Is Mutually Beneficial Exchange
- 1602 Absolute Advantage
- 1603 Comparative Advantage
- 1604 Finding Both from an Output Table worked example
- 1605 The Reciprocal Rule
- 1606 Gains from Specialisation worked example
- 1607 Consuming Beyond the Frontier
- 1608 The Range of Beneficial Ratios worked example
- 1609 When One Country Is Better at Everything
- 1610 Partial Specialisation Is Enough
- 1611 Why Similar Countries Trade the Same Goods review
- 1612 Dynamic Comparative Advantage
- 1613 The Rules and the Rounds
- 1614 Three Forms of Protection
- 1615 Classify the Barrier worked example
- 1616 The Two-Country Trade Model
- 1617 The Free-Trade Price and Flow worked example
- 1618 A Quota Smaller Than the Flow worked example
- 1619 Who Gains and Who Loses
- 1620 Protection Works Like a Subsidy
- 1621 Protection Reshuffles Jobs
- 1622 The Cost per Job Saved
- 1623 Trade and Wages
- 1624 Labour Standards
- 1625 Infant Industry
- 1626 Anti-Dumping and the Environment
- 1627 Consumer Safety and National Interest
- 1628 Classify the Argument, Give the Counter worked example
- 1629 Does Protection Save Jobs review
- 1630 The Technotron Argument review
Unit 18: Capstone: Macroeconomics in Practice 40 lessons, 3 lecture parts
- 1701 What This Exam Tests
- 1702 The Seven Categories
- 1703 The Four Abilities
- 1704 How the Questions Are Built
- 1705 Two Published Outlines
- 1706 Model One: Demand and Supply
- 1707 Any Market: The Four-Step Method worked example
- 1708 Model Two: Aggregate Demand and Aggregate Supply
- 1709 Any Shock: Cause, Curve, Direction, Result worked example
- 1710 Model Three: The Expenditure Model
- 1711 Model Four: The Money Market
- 1712 Any Policy: Tool to Output and Prices worked example
- 1713 Model Five: Loanable Funds
- 1714 Which Market Does a Question Live In
- 1715 Model Six: The Foreign Exchange Market
- 1716 Model Seven: The Production Possibilities Frontier
- 1717 Choosing the Right Model worked example
- 1718 Real Against Nominal
- 1719 Deflating a Series worked example
- 1720 Stock Against Flow
- 1721 Movement Along Against a Shift
- 1722 Along or Shift, Across Six Markets worked example
- 1723 Short Run Against Long Run
- 1724 Marginal Against Average
- 1725 Per Capita and Growth Rates worked example
- 1726 Gross Against Net
- 1727 The Vocabulary That Recurs
- 1728 The Four Macroeconomic Goals
- 1729 Diagnose the Economy worked example
- 1730 Which Policy for Which Gap
- 1731 The Policy Mix, Both Instruments worked example
- 1732 What the Models Cannot Decide
- 1733 Reading a Data Table worked example
- 1734 Working a Graph Question
- 1735 Working a Numerical Question worked example
- 1736 Where the Course Departed From Its Anchor
- 1737 The Whole Economy in One Diagram review
- 1738 The Twelve Published Questions, Mapped review
- 1739 Where Economists Disagree, and Why review
- 1740 What This Course Did Not Settle review
Who this subject is for
- Students preparing for the CLEP Principles of Macroeconomics exam
- Business and economics majors
- Political science and public policy students
- Adult learners finishing a degree
- Homeschool students
- Anyone who wants to understand inflation, unemployment and growth
Why Principles of Macroeconomics matters
Macroeconomics explains how whole economies grow, stall and respond to policy. It is the foundation for:
- Intermediate economics
- Finance
- Public policy
- International trade
- Business strategy
Time to complete
- of lessons (484, measured)
- 5.5 h
- of lectures (27)
- 14.2 h
- learning hours on the certificate, with quizzes and the final
- 26.5 h
Times are measured from the recordings and the exam time limits. Go at your own pace; nothing expires.
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