ECO 302 Macroeconomics

Case, Karl E., Fair, Roy C., Oster, Sharon E., Principles of Macroeconomics 12th Edition 2017, published by Pearson
ISBN-13: 978-0134078809
ISBN-10: 0134078802

Students can obtain this text book from the following source:
http://www.mypearsonstore.com/bookstore/principles-of-macroeconomics-0134078802

All reading and (optional) homework assignments referenced in this syllabus refer to this text

1) 1) In addition, it is recommended that students have the accompanying study guide by Pearson. This can be accessed here:
https://www.pearsonhighered.com/program/Case-Principles-of-Macroeconomics-Plus-My-Econ-Lab-with-Pearson-e-Text-1-semester-access-Access-Card-Package-12th-Edition/PGM337107.html

2) The following study guide will be made available upon enrollment:

Case, Karl E., Fair, Roy C., Oster, Sharon E., Powerpoint Presentation to accompany Principles of Macroeconomics 12th Edition 2017, published by Pearson

Lesson Overview

Lesson 1: Review of the Basic Principles of Economics
Review Chapters 1- 4

In this lesson the students review the basic principles of economics the students learned in Economics 101. The students look at the economic problem of scarcity and choice. The students review the basics of demand and supply curves with respect to shifts and movement along the curve. The students review the concept of market equilibrium.

Lesson 2: Introduction to Macroeconomics
Read Chapter 5

In this lesson the students look at macroeconomic concerns such as output growth, unemployment, and inflation. The students look at the components of the macroeconomy using the circular flow diagram. The students examine the free market arena and learn about the role of the government in the macroeconomy.

Lesson 3: Measuring National Output and National Income
Read Chapter 6

In this lesson the students learn about the measurement of national output and national income. The students learn about the Gross Domestic Product (GDP) and what it includes. The students look at how the GDP is calculated in nominal and real terms. The students learn about the problem of fixed weights. The students look at GDP with respect to social welfare and how the underground economy is accounted for. The students look at the implications of calculating the gross national income per capita.

Lesson 4: Unemployment, Inflation, and Long-Run Growth
Read Chapter 7

In this lesson the students look at how unemployment is measured and the components of the unemployment rate. The students examine the costs associated with unemployment. The students look at inflation and the Consumer Price Index (CPI). The students examine the costs associated with inflation. The students look at how to account for long-run growth and how to make cost-of-living adjustments.

Lesson 5: Aggregate Expenditure and Equilibrium Output
Read Chapter 8

In this lesson the students learn about the Keynesian theory of consumption. The students look at how to determine equilibrium output using the saving/investment approach to equilibrium. The students learn about how adjustments are made to equilibrium and learn about the multiplier equation.

Lesson 6: The Government and Fiscal Policy
Read Chapter 9

In this lesson the students learn about how government purchases (G), net taxes (T), and disposable income (Y) are factors in the determination of the equilibrium output, I (income). The students examine the multiplier effect with respect to government spending and taxes. The students look at the balanced-budget multiplier. the students learn about the federal budget and how the government has dealt with it during the past thirty years. The students examine the implications of federal government debt. The students learn about automatic stabilizers and destabilizers.

Lesson 7: Money, the Federal Reserve, and the Interest Rate
Read Chapter 10

In this lesson the students define money as commodity and Fiat Monies. The students look at the national private banking system and how the supply of money is measured. The students learn about how banks create money and the money multiplier. The students look at the Federal Reserve Bank and its activities. The students look at how the Federal Reserve controls the money supply and learn how to interpret the supply curve for money. The students look at how changing the money supply affects the interest rate and learn about what causes shifts in the money demand curve.

Lesson 8: The Determination of Aggregate Output, the Price Level, and the Interest Rate
Read Chapter 11

In this lesson the students examine the factors that affect the demand for money and how the money market works. The students look at how changing the money supply affects the interest rate and look at what causes shifts in the money demand curve. They learn about aggregate demand in the goods and money markets and learn about expansionary and contractionary policy effects. The students look at the slope of the aggregate demand curve and learn about what causes shifts in this curve.

Lesson 9: Policy Effects and Cost Shocks in the AS/AD Model
Read Chapter 12

In this lesson the students look at the aggregate supply curve and what causes it to shift in the short run. The students examine cost shocks and how it affects AS/AD equilibrium. The students look at the long run aggregate supply and policy effects. The students explore causes of inflation such as demand-pull and cost push. The students learn about supply side inflation and how expectations influence inflation. The students examine how the Fed can target the interest rate and inflation rate.

Lesson 10: The Labor Market in the Macroeconomy
Read Chapter 13

In this lesson the students look at basic concepts in the labor market. The students look at the supply curve for labor in terms of the classical model. The students learn about sticky wages and efficiency wage theory. The students learn about imperfect information with respect to wages and learn about the concept of the minimum wage. The students look at the Phillips curve in terms of aggregate supply and demand analysis. The students learn about how expectations affect the Phillips curve as well as inflation and aggregate demand.

Lesson 11: Financial Crises, Stabilization, and Deficits
Read Chapter 14

In this lesson the students look at financial crises with respect to the stock market and the housing market. The students learn about household wealth and its affect on the economy. The students look at how policy makers deal with financial crises with respect to asset markets. The students look the problem of time lags regarding monetary and fiscal policy in terms of stabilization and response. In this lesson the students also learn about deficit targeting.

Lesson 12: Household and Firm Behavior in the Macroeconomy:
Read Chapter 15

In this lesson the students learn about the life-cycle theory of consumption with respect to the labor supply decision. The students look at how the interest rate and the government effect consumption and labor. The students look at supply with respect to taxes and transfers. The students look at how firms make investment and employment decision. The students learn about the role of expectations and animal spirits. The students look at inventory investment and learn about the effects of excess labor and excess capital.

Lesson 13: International Trade, Comparative Advantage, and Protectionism
Read Chapter 18

In this lesson the students look at international trade surpluses and deficits. The students learn about absolute advantage versus comparative advantage. The students learn about terms of trade and exchange rates. The students learn about the Hackschar-Ohlin theorem and learn about other explanations for observed trade. The students look at US Trade policies with respect to GATT and WTO. The students look at the free trade versus protection debate.

Lesson 14: Open-Economy Macroeconomics: The Balance of Payments and Exchange Rates
Read Chapter 19

In this lesson the students learn about the balance of payments with respect to the current account and the capital account. The students learn about the role of the United States as a debtor nation. The students look at the international sector and planned aggregate expenditure. The students learn about imports and exports in terms of prices and the price feedback effect. The students look at the situation of an open economy with flexible exchange rates and the market for foreign exchange. The students learn about factors that affect exchange rates and the effects of exchange rates on the economy.

Lesson 15: Economic Growth in Developing Economies
Read Chapter 20

In this lesson the students look at developing nations with respect to economic growth. The students learn about sources and strategies for economic development. The students learn about different techniques in economic development including education and health improvements. The students learn about requirements for making a successful transition to a market economy framework.

The student’s final grade will be based on a final examination. Examination questions will cover all topics covered in the readings. Students will have two hours to complete the final examination.  Students will be assigned a number grade from 0-100. A letter grade will also be issued in accordance with the following scale:

90-100 – A
80-89 – B
70-79 – C
0-69 – non passing