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2014/2015  BA-BHAAI1022U  Principles of macroeconomics

English Title
Principles of macroeconomics

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Course period Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Course instructor - Dr. Brad Hobbs, Florida Gulf Coast University
    Patricia Plackett - MPP
Main academic disciplines
  • Economics, macro economics and managerial economics
Last updated on 20-05-2014
Learning objectives
By the end of the course students should be able to:
  • Fully explain the basic concepts, models, theories and tools used in this macroeconomics course and use them to analyze economic decisions by individuals and by firms.
  • Identify the foundational assumptions used in their own economic analysis and in the economics analysis of others.
  • Predict the effects of supply and demand changes on the direction of market price and quantity using the tools of consumer and producer surplus to identify the gains form exchange and the gains from the ability to manipulate price or quantity (e.g., the effects of barriers to entry, market power, monopolization, price controls, taxes, subsidies, and quotas.)
  • Articulate and explain the systematic nature of economic analysis and address likely secondary effects of particular policies and institutional frameworks.
  • Analyze economic outcomes in terms of their contribution to recognition of scarcity and efficiency.
  • Communicate, discuss, and present sound logical conclusions from personal analyses of economic incentives.
Course prerequisites
It is recommended that students have successfully completed a course in basic algebra. No other prerequisites are required.
Prerequisites for registering for the exam
Number of mandatory activities: 1
Compulsory assignments (assessed approved/not approved)
Mandatory Mid-term Assignment: The assignment will be an examination similar to the Final examination. The format will be a take-home based on questions drawn from the test bank which accompanies your textbook. These questions require analytical thinking and the use of the models.
Examination
4 hour written exam:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Summer Term
Aids allowed to bring to the exam Limited aids, see the list below and the exam plan/guidelines for further information:
  • Allowed calculators
  • Allowed dictionaries
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Course content and structure

The Principles of Macroeconomics is the introductory, foundational course that gives students a comprehensive overview of macroeconomic theory. It provides the framework for subsequent intermediate macroeconomic theory courses and is any student's introduction to the analysis of economies at the aggregated (national or state) level.
 
Macroeconomics is the study of the behavior of an entire economy aggregated across all of the individual decision-making units. It deals primarily with those factors affecting production, employment, and price levels. Topics which we will cover include: economic growth, business cycles, the national debt, interest rates, government spending, the measurement of economic aggregates, monetary policy, and fiscal policy. We will also introduce international economics and polciies along with international finance. 
 
There is relatively-wide agreement on the goals of macroeconomic policy: growth in real output, full employment, and price stability. However, macroeconomic theory is marked by diverse perspectives concerning the appropriate policy actions required to achieve these goals. A number of alternative schools of thought exist including Keynesianism, Monetarism, and Rational Expectations. Each stresses different paths and perspectives on the proper path(s) to achieving the goals of macroeconomic success.
 
Students are encouraged to follow the economic and financial news over the period of the course – the course will provide the background necessary for formulating informed opinions on the workings of a macroeconomy.
 
For the Preliminary Assignment students are required to complete a specified reading and prepare a short report in response to several questions for discussion in Class 3. For the Mandatory Mid-term Assignment students will be assigned an article and required to read and analyze it in order to produce a short paper that analyzes a news article pertaining to a change in supply, a change in demand, or the effects of some price control on markets. Papers must include a graphical analysis accompanied by a solid explanation of the issue, the assumptions, the change that is being modelled and the observed or expected effects of the change. Papers are to be submitted in Class 5.

Class Schedule
 

Class Topic
Class 1 Introduction
Introductory Discussion of The Price of Everything: A Parable of Possibility and Prosperity,
1. The Big Ideas in Economics
2. The Power of Trade and Comparative Advantage
Class 2  Supply and Demand, Price Controls
3. Supply and Demand
4. Equilibrium: How Supply and Demand Determine Prices 
5. Price Ceilings and Price Floors
Class 3 Economic Growth, National Income Accounting
6. GDP and The Measurement of Progress
7. The Wealth of Nations and Economic Growth
Appendix: The Magic of Compound Growth: Using a Spreadsheet
Preliminary Assignment due
Class 4 Economic Growth and Productivity
8. Growth, Capital Accumulation and the Economics of Ideas: Catching Up vs. The Cutting Edge
Appendix: Excellent Growth
9. Savings, Investment, and the Financial System
Appendix: Bond Pricing and Arbitrage
Class 5 Personal Finance, Political Economy and Public Choice
10. Stock Markets and Personal Finance
21. Political Economy and Public Choice
Mandatory Mid-term Assignmentdue
Class 6 Business Fluctuations, Employment, Money, and Inflation
11. Unemployment and Labor Force Participation
12. Inflation and the Quantity Theory of Money
Appendix: Get Real! An Excellent Adventure
Class 7 Business Fluctuations, Aggregate Demand and Aggregate Supply, the  Transmission of Policy

13. Business Fluctuations: Aggregate Demand and Supply 
14. Transmission and Amplification Mechanisms
Class 8 Macroeconomic Policy and Institutions - Monetary Policy and the Fed
15. The Federal Reserve System and Open Market Operations
Appendix: The Money Multiplier Process in Detail
16. Monetary Policy
Class 9 Macroeconomic Policy and Institutions - Fiscal Policy and Congress
17. The Federal Budget: Taxes and Spending
18. Fiscal Policy
Class 10 International Economics - Trade, Finance, and Exchange Rates
19. International Trade 
20. International Finance
Class 11 Comprehensive Review
Analysis of Current Economic Conditions and Policies in Europe or America
This exercise is designed to incorporate the materials that have been developed throughout the course. Your inquiry should be within the framework of what you have learned in this course.
Teaching methods
The course is primarily lecture-based. The short case studies included in the textbook will be covered in class. Periodically, there will be in-class group work focused on a specific short project such an analyzing a case or an article. These sessions are designed to encourage critical thinking and analytical skills. All such exercises will be debriefed with the entire class to ensure that students are internalising the major points of macroeconomic relevance.
Further Information
Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 3 in order to 'jump-start' the learning process.
Expected literature

Modern Principles: Macroeconomics, 2nd Edition, 2012, 481 pages.
Authors: Tyler Cowen and Alex Tabarrok
Publisher: Worth Publishers
ISBN-13: 978-1-4292-3998-1 
 
Preliminary Assignment
1)      Radford, R.A. 1945. “The Economic Organisation of a P.O.W. Camp.” Economica, 12(48): 189-201.
Last updated on 20-05-2014
 



Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Course period Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Course instructor - Dr. Brad Hobbs, Florida Gulf Coast University
    Patricia Plackett - MPP
Main academic disciplines
  • Economics, macro economics and managerial economics
Last updated on 20-05-2014