Almost every free-response question on the AP Macro exam asks you to draw, label, or shift one of seven models. This page is the whole set: what each graph shows, exactly what has to be labeled, how it shifts, and the errors that quietly cost points.
The rules that apply to every graph
Label both axes with the correct variable — abbreviations like PL, Y, r, and i are accepted, vague words like “price” on a macro graph are not.
Label every curve, including the shifted one, and draw an arrow showing the direction of the shift.
Show equilibrium with dotted lines to both axes, and subscript the before and after values (P₁ → P₂).
Draw it big. Cramped graphs make it impossible for a reader to see which line moved, and readers can only award what they can see.
1Unit 1
Production Possibilities Curve
Scarcity, opportunity cost, efficiency, and growth for an economy producing two goods.
Production Possibilities Curve — dashed curves show the shifted position.
Label these or lose the point
•Both axes with the two goods
•The curve itself (PPC or PPF)
•Any point you reference — inside, on, or outside the curve
•The new curve when you show growth
Shifts you have to know
What happens
On the graph
More resources, better technology, more capital
Entire PPC shifts outward
Natural disaster, war, shrinking labor force
Entire PPC shifts inward
Technology that only improves one good
Curve pivots along that good's axis only
Recession / unemployment
Move to a point inside the curve — the curve does not shift
Common exam pitfalls
—Drawing a straight-line PPC when the question implies increasing opportunity cost — bowed outward is the default.
—Shifting the whole curve for unemployment. Unemployment is a point inside the curve, not a shift.
—Forgetting that opportunity cost is measured as units of the good given up, not dollars.
2Unit 1
Supply and Demand
Price and quantity in a single market, and what happens when one side moves.
Supply and Demand — dashed curves show the shifted position.
Label these or lose the point
•Axes: Price (vertical), Quantity (horizontal)
•S and D, plus S₂/D₂ after a shift
•Equilibrium price and quantity with dotted lines to both axes
•An arrow showing the direction of the shift
Shifts you have to know
What happens
On the graph
Higher income (normal good), more buyers, tastes
Demand right → P↑ Q↑
Substitute price falls
Demand left → P↓ Q↓
Input costs fall, better technology
Supply right → P↓ Q↑
Per-unit tax on producers
Supply left → P↑ Q↓
Common exam pitfalls
—Confusing a change in quantity demanded (movement along D) with a change in demand (shift of D). A price change alone never shifts the curve.
—Shifting both curves when the prompt only changes one thing — with two shifts, one of P or Q becomes indeterminate.
—Leaving the equilibrium unlabeled. Graders look for P₁, Q₁, P₂, Q₂.
3Units 3–5
AD–AS (Aggregate Demand & Supply)
Real GDP and the price level for the whole economy, plus recessionary and inflationary gaps.
AD–AS (Aggregate Demand & Supply) — dashed curves show the shifted position.
Label these or lose the point
•Axes: Price level (PL) and Real GDP / real output (Y)
•AD, SRAS, and LRAS — LRAS is vertical at full employment
•Equilibrium PL and Y with dotted lines
•The gap: the horizontal distance between equilibrium Y and LRAS
Shifts you have to know
What happens
On the graph
Government spending↑, taxes↓, exports↑, consumer confidence↑
AD right → PL↑ Y↑ U↓
Contractionary fiscal or monetary policy
AD left → PL↓ Y↓ U↑
Oil price spike, higher nominal wages
SRAS left → stagflation: PL↑ Y↓
Growth in capital, labor force, or productivity
LRAS right → long-run economic growth
Common exam pitfalls
—Sloping LRAS. It is always vertical — long-run output does not depend on the price level.
—Shifting LRAS for a short-run demand shock. Only supply-side capacity moves LRAS.
—Saying "inflation" when the graph shows a one-time increase in the price level — write PL↑ instead.
—Not labeling the gap. If you claim a recessionary gap, show Y below LRAS on the graph.
4Unit 4
Money Market
The nominal interest rate set by money supply and money demand.
Money Market — dashed curves show the shifted position.
Label these or lose the point
•Axes: Nominal interest rate (i) and Quantity of money
•Vertical MS (the Fed sets it), downward-sloping MD
•Equilibrium nominal interest rate
•The new MS after Fed action, with an arrow
Shifts you have to know
What happens
On the graph
Fed buys bonds, cuts the reserve requirement or discount rate
MS right → i↓ → I↑ → AD right
Fed sells bonds
MS left → i↑ → I↓ → AD left
Real GDP rises, price level rises
MD right → i↑
Real GDP falls
MD left → i↓
Common exam pitfalls
—Sloping the money supply curve. MS is vertical — it is a policy choice, not a function of the interest rate.
—Labeling the vertical axis "real interest rate." The money market uses the nominal rate.
—Stopping at i↓. Full credit usually requires chaining i↓ → investment↑ → AD right → Y↑ and PL↑.
5Unit 4
Loanable Funds Market
The real interest rate set by national saving and borrowing.
Loanable Funds Market — dashed curves show the shifted position.
Label these or lose the point
•Axes: Real interest rate (r) and Quantity of loanable funds
•Upward-sloping supply of saving, downward-sloping demand for funds
•Equilibrium real interest rate
•The crowding-out arrow when government borrows
Shifts you have to know
What happens
On the graph
Government deficit spending (more borrowing)
Demand right → r↑ → private investment crowded out
Budget surplus / government pays down debt
Demand left → r↓
Households save more, capital inflow from abroad
Supply right → r↓
Expected inflation rises
Nominal rates rise; the real rate is what this graph shows
Common exam pitfalls
—Mixing this up with the money market. Loanable funds = real rate and it is not vertical; money market = nominal rate with a vertical MS.
—Using loanable funds for Fed policy. Open-market operations belong on the money market graph.
—Claiming crowding out without showing r↑ on the graph.
6Unit 5
Phillips Curve
The short-run trade-off between inflation and unemployment, and why it disappears long run.
Phillips Curve — dashed curves show the shifted position.
Label these or lose the point
•Axes: Inflation rate and Unemployment rate
•Downward-sloping SRPC and vertical LRPC
•The natural rate of unemployment where LRPC sits
•The point you are describing, before and after
Shifts you have to know
What happens
On the graph
AD right (expansionary policy)
Move up-left along SRPC → inflation↑ unemployment↓
AD left (contractionary policy)
Move down-right along SRPC
SRAS left (supply shock)
SRPC shifts right → stagflation
Higher expected inflation
SRPC shifts up/right at the same unemployment rate
Common exam pitfalls
—Shifting the SRPC for a demand shock. Demand changes move you along the curve; only supply shocks and expectations shift it.
—Putting LRPC anywhere other than the natural rate of unemployment.
—Forgetting the pairing: AD–AS and the Phillips curve must tell the same story. If PL↑ and Y↑, then inflation↑ and unemployment↓.
7Unit 6
Foreign Exchange (FOREX)
The exchange rate for one currency, priced in another currency.
Foreign Exchange (FOREX) — dashed curves show the shifted position.
Label these or lose the point
•Title the graph with the specific currency — "Market for the US dollar"
•Axes: Exchange rate (e.g. euros per dollar) and Quantity of dollars
•S and D for that currency, plus the shifted curve
•The new exchange rate, and the words appreciate or depreciate
Shifts you have to know
What happens
On the graph
US real interest rates rise
Demand for $ right → $ appreciates → exports↓ imports↑
Foreigners buy more US goods
Demand for $ right → $ appreciates
Americans buy more foreign goods or assets
Supply of $ right → $ depreciates
US inflation higher than abroad
$ depreciates over time
Common exam pitfalls
—Drawing one graph and using it for both currencies. If the dollar appreciates, the other currency depreciates — draw the correct market.
—Mislabeling the vertical axis. It must be the price of the graphed currency in units of the other currency.
—Saying the exchange rate "increases" without saying appreciates or depreciates — the AP rubric wants the term.
Next: put the graphs to work
Drawing a graph correctly is half the battle — the other half is knowing which one the question wants. The unit guides walk through each model in context.