8 week classes

School of Business

ECON102 Macroeconomics

3 Credit Hours 8-Weeks

Prerequisite(s): None

Please see the Lessons area in the classroom for additional course specific information

Table of Contents

Course Description Course Scope Course Materials

Course Objectives Course Outline Course Delivery Method

Academic Services Policies Turnitin.com

Course Description (Catalog)

This course is an introduction to the principles and tools of macroeconomic analysis. Macroeconomics investigates the main topics of the overall economy including Gross Domestic Product, inflation, unemployment, economic growth, recession, monetary policy and fiscal policy. We use these theories and concepts to examine the role of the government in our economy and how government makes choices.

Course Scope

Macroeconomics is concerned with the study of the structure of an aggregate economy and its basic sub-divisions such as government, households and businesses and the relationship between these major components. It addresses the issues of economic growth, recession, unemployment, inflation, international trade, and the role of government and its policies for stabilizing the economy including monetary policy and fiscal policy.

Course Materials

Course Companion Website: http://www.saylor.org/courses/econ102/

The required readings from this text are conveniently located within your course lessons. To access the required readings in this course, please go to "Required Readings" within the "Lesson" for the corresponding week and click the links. They will open up the readings. You can also search the above website.

ECON102 E-book Links

Adobe Reader is required to view these files. If you do not have this software, please log onto

www.adobe.com to download the free reader. You will need to log-in to each link with your student/faculty ID and password. You must be logged in to your campus page before you can access the links. Troubleshooting tips are available in the Online Library in the Course Materials & Bookstore section, and also in the HELP/FAQs section.

Multiple troubleshooting tips are available in the following links: http://apus.libanswers.com/a.php?qid=10718 and http://apus.libanswers.com/a.php?qid=9349 Please report any issues to [email protected].

Copyright Alert

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Course Objectives

CO1: Define economics in general terms.

CO2: Explain how economists use the scientific method to formulate economic principles.

CO3: Differentiate between microeconomics and macroeconomics.

CO4: Explain the economic problem faced by society when scarce economic resources are allocated in

an effort to satisfy society’s unlimited wants.

CO5: Define Gross Domestic Product.

CO6: Distinguish Gross Domestic Product from Gross National Product.

CO7: Define economic growth and describe the determinants of economic growth.

CO8: Identify the economic costs of unemployment.

CO9: Identify the economic costs of inflation.

CO10: Identify the processes, tools, and limitations of fiscal policy.

CO11: Explain the role of built-in stabilizers in dampening business cycles.

CO12: Identify the functions and responsibilities of the Federal Reserve.

CO13: Identify the functions of money.

CO14: Explain the importance of international trade.

CO 16: Describe Adam Smith’s theory of absolute advantage.

CO17: Describe the Ricardian model of trade and analyze its implications for trade.

CO18: Describe the Heckscher-Ohlin model of trade and analyze its implications for trade.

CO19: Identify tariffs and quotas in international trade.

CO20: Analyze the effects of tariffs and quotas.

Course Outline

Week Topic(s) Learning Objective(s)

1

Introduction to

Macroeconomics

 Describe the characteristics of demand and supply, and apply the demand and supply model.

 Define real gross domestic product and identify the phases of a business cycle.

 Define inflation and deflation, and explain how each affects the price and economic growth of an economy.

 Articulate why the price-level changes and how it can affect economic stability.

 Explain how unemployment is calculated and measured in the United States.

 Demonstrate an understanding of the role of the government in the economy.

 Identify the components of the macroeconomy and relate them to the circular flow diagram. Describe the characteristics of

demand and supply, and apply the demand and supply model.

2 Measuring Aggregate Output  Describe the measurement of GDP using the expenditure approach and the income approach.

 Explain the other measures of output and income and learn their distinction from one another.

 Distinguish between the real and nominal values.

 Analyze the problems associated with using GDP as a measure of well-being.

 Describe the neo-classical theory of national income.

3 Unemployment and Inflation  Define the unemployment rate.

 Identify and distinguish between the different forms of unemployment.

 Analyze the problems associated with the unemployment rate.

 Define, interpret, and calculate inflation rate and the consumer price index.

 Describe the problems and biases associated with the consumer price index.

 Explain the Phillips curve and the relationship between inflation and unemployment.

4 Aggregate Demand and

Supply  Define aggregate demand, graphically represent a hypothetical

aggregate demand curve, and identify the reasons for the

negative slope of the demand curve.

 Distinguish between a change in the aggregate quantity of goods and services demanded and a change in aggregate

demand.

 Define “multiplier” and explain how to calculate it.

 Graphically represent a hypothetical long-run aggregate supply curve and explain the underlying connotations for

natural levels of employment and output at various price

levels, given changes in aggregate demand.

 Graphically represent a hypothetical short-run aggregate supply curve, explain why it slopes upward, and explain why

it may shift.

 Discuss various explanations for wage and price stickiness.

 Explain and illustrate what is meant by equilibrium in the short run and relate the equilibrium to potential output.

 Explain and graphically represent the consumption function and the saving function, explain the slopes of their respective

curves, and explain their relationship to each other.

 Compare the current income hypothesis with the permanent income hypothesis.

 Discuss two factors that can cause the consumption function to shift upward or downward.

5 Government and Fiscal Policy  Demonstrate an understanding of the major components of U.S. government spending and sources of government

revenues.

 Define the terms budget surplus, budget deficit, balanced budget, and national debt, and discuss their trends over time in

the United States.

 Compute Government Spending Multiplier, the Tax Multiplier, and the Balanced Budget Multiplier.

 Define automatic stabilizers and explain how they work.

 Explain and graphically illustrate how discretionary fiscal policy works and compare the changes in aggregate demand

that result from changes in government purchases, income

taxes, and transfer payments.

 Explain how the various kinds of lags influence the effectiveness of discretionary fiscal policy.

 Explain and graphically illustrate how crowding out (and its reverse) influence the impact of expansionary or

contractionary fiscal policy.

 Discuss the controversy concerning which types of fiscal policies to use, including the arguments from supply-side

economics.

6 The Money Supply and the

Monetary Policy  Define money and discuss its three basic functions.

 Distinguish between the types of money, i.e. between commodity money and fiat money, giving examples of each.

 Define money supply and the related definitions of it (M1 and M2).

 Explain the functions of a bank and describe a bank’s balance sheet.

 Describe the process of money creation (destruction) using the concept of the deposit multiplier.

 Explain the primary functions of the central bank and describe the tools used by the Fed for money market operations.

 Explain and illustrate how the bond market works and discuss the relationship between the price of a bond and that bond’s

interest rate.

 Explain and illustrate the relationship between a change in demand for or supply of bonds and macroeconomic activity.

 Explain and illustrate how the foreign exchange market works and how a change in demand for a country’s currency or a

change in its supply affects macroeconomic activity.

 Draw a money demand curve and explain how changes in other variables may lead to shifts in the money demand curve.

 Use graphs to explain how changes in money demand or money supply are related to changes in the bond market, in

interest rates, in aggregate demand, and in real GDP and the

price level.

7 Economic Growth  Define economic growth and describe the determinants of economic growth.

 Distinguish between, describe, and analyze the classical, neoclassical, and endogenous theories of economic growth.

 Learn the closed economy Solow model.

 Explain how a country’s standard of living depends on its saving and population growth rates.

 Apply the “Golden Rule” to find the optimal savings rate and capital stock.

8 International Trade  Explain the importance of studying trade.

 Describe Adam Smith’s theory of absolute advantage and explain how it is calculated.

 Describe the Ricardian model of trade and analyze its implications for trade.

 Describe the Heckscher-Ohlin model of trade and analyze its implications for trade.

 Identify tariffs and quotas in international trade.

 Analyze the effects of tariffs and quotas.

Course Delivery Method

This course delivered via distance learning will enable students to complete academic work in a flexible manner, completely online. Course materials and access to an online learning management system will be made available to each student. Online assignments are due by Sunday evening of the week as noted and include Forum questions (accomplished in groups through a threaded forum), examination, and individual assignments submitted for review by the Faculty Member). Assigned faculty will support the students throughout this eight-week course.

Policies

Please see the Student Handbook to reference all University policies. Quick links to frequently asked question about policies are listed below.

Drop/Withdrawal Policy Plagiarism Policy Extension Process and Policy Disability Accommodations

Grading Scale Please see the Student Handbook to reference the University’s grading scale. Citation and Reference Style Attention Please: Students will follow the APA Format as the sole citation and reference style used in written work submitted as part of coursework to the University. Assignments completed in a narrative essay or composition format must follow the citation style cited in the APA Format. Late Assignments Students are expected to submit classroom assignments by the posted due date and to complete the course according to the published class schedule. The due date for each assignment is listed under each Assignment. As adults, students, and working professionals, I understand you must manage competing demands on your time. We all know that “life happens” but it is important to adhere as closely to the deadlines in the class as possible. Should you need additional time to complete an assignment, please contact me before the due date so we can discuss the situation and determine an acceptable resolution. If arrangements are not made in advance, a late penalty of 10% will be assessed for any assignment submitted 1-7 days past the due date. Assignments will not be accepted after the 7th day. No work will be accepted past the final day of class. Netiquette Online universities promote the advancement of knowledge through positive and constructive debate – both inside and outside the classroom. Forums on the Internet, however, can occasionally degenerate into needless insults and “flaming.” Such activity and the loss of good manners are not acceptable in a university setting – basic academic rules of good behavior and proper “Netiquette” must persist. Remember that you are in a place for the rewards and excitement of learning which does not include descent to personal attacks or student attempts to stifle the Forum of others.

 Technology Limitations: While you should feel free to explore the full-range of creative composition in your formal papers, keep e-mail layouts simple. The Sakai classroom may not fully support MIME or HTML encoded messages, which means that bold face, italics, underlining, and a variety of color-coding or other visual effects will not translate in your e-mail messages.

 Humor Note: Despite the best of intentions, jokes and especially satire can easily get lost or taken seriously. If you feel the need for humor, you may wish to add “emoticons” to help alert your readers: ;-), : ), 

Disclaimer Statement Course content may vary from the outline to meet the needs of this particular group.

Academic Services

The Online Library is available to enrolled students and faculty from inside the electronic campus. This is your starting point for access to online books, subscription periodicals, and Web resources that are designed to support your classes and generally not available through search engines on the open Web. In addition, the Online Library provides access to special learning resources, which the University has contracted to assist with your studies. Questions can be directed to [email protected].

 Charles Town Library and Inter Library Loan: The University maintains a special library with a limited number of supporting volumes, collection of our professors’ publication, and services to search and borrow research books and articles from other libraries.

 Electronic Books: You can use the online library to uncover and download over 50,000 titles, which have been scanned and made available in electronic format.

 Electronic Journals: The University provides access to over 12,000 journals, which are available in electronic form and only through limited subscription services.

 Tutor.com: AMU and APU Civilian & Coast Guard students are eligible for 10 free hours of tutoring provided by APUS. Tutor.com connects you with a professional tutor online 24/7 to provide help with assignments, studying, test prep, resume writing, and more. Tutor.com is tutoring the way it was meant to be. You get expert tutoring whenever you need help, and you work one-to-one with your tutor in your online classroom on your specific problem until it is done.

 Disability Accommodations: Students are encouraged email [email protected] to discuss potential academic accommodations and begin the review process.

Request a Library Guide for your course (http://apus.libguides.com/index.php) The AMU/APU Library Guides provide access to collections of trusted sites on the Open Web and licensed resources on the Deep Web. The following are specially tailored for academic research at APUS:

 Program Portals contain topical and methodological resources to help launch general research in the degree program. To locate, search by department name, or navigate by school.

 Course Lib-Guides narrow the focus to relevant resources for the corresponding course. To locate, search by class code (e.g., SOCI111), or class name.

If a guide you need is not available yet, please email the APUS Library: [email protected].

Turnitin.com

Faculty may require assignments be submitted to Turnitin.com. Turnitin.com will analyze a paper and report instances of potential plagiarism for the student to edit before submitting it for a grade. In some cases professors may require students to use Turnitin.com. This is automatically processed through the Assignments area of the course.