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Syllabus

Economics 104 – Spring 2004 (Tuesday Evenings)

Principles of Macroeconomics

INSTRUCTOR: Wayne Carroll

OFFICE: Schneider 471

PHONE: 8363388

E-MAIL: carrolwd

OFFICE HOURS: 11:00-12:00 MTuWTh, 5:30-6:00 Tu, and other times when I’m in the office.

This course provides an intensive introduction to the tools and concepts of macroeconomics. At the end of this course you should understand current debates concerning macroeconomic policies and should be able to anticipate some future macroeconomic problems.

Lectures Since most of the material in this course will be presented in the lectures, it is essential that you attend class regularly. While class attendance will not be taken into account directly in the determination of your course grade, it is likely to be reflected in your performance on exams. If you miss a lecture, you should obtain that day's notes from someone else in class, and then ask me about any remaining questions you have.

Readings The text for this course is Principles of Economics by N. Gregory Mankiw (3rd edition). Reading assignments from the text are listed in the course outline that follows. The Study Guide accompanying the Mankiw text is available in the bookstore.

Outside Reading Requirement - As we go through the semester you will be expected to follow current macroeconomic news. By the end of the course you should be able to understand discussions of macroeconomic issues in sources such as The Wall Street Journal or New York Times. You can sign up for a free online subscription to the New York Times at www.nytimes.com, and you can find both newspapers in the library

Grading Your grade in this course will be based on your performance on three exams during the semester, a comprehensive final exam, and several quizzes. Each of the four exams will carry an equal weight in your grade, and the quizzes together probably will count about as much as one exam. Tentative dates for the exams are:

First exam: 24 February

Second exam: 6 April

Third exam: 4 May

Final exam: 18 May

Makeup exams You may take a makeup exam only if you contact me before the regularly scheduled exam is given. Makeup exams will be harder than the regularly scheduled exams. Credit will be given for late quizzes only within one week of the due date.

Relationship of this course to the goals of the University’s Baccalaureate program – The following are the goals of UWEC’s undergraduate program.

The baccalaureate experience shall develop for students an:

·  understanding of a liberal education.

·  appreciation of the University as a learning community.

·  ability to inquire, think, analyze.

·  ability to write, read, speak, listen.

·  understanding of numerical data.

·  historical consciousness.

·  international and intercultural experience.

·  understanding of science and the scientific methods.

·  appreciation of the arts.

·  understanding of values.

·  understanding of human behavior and human institutions.

Keep these goals in mind during the semester. We will try to address them whenever possible during the course.


Tentative Schedule of Topics

All readings listed below are from Mankiw. Each reading assignment listed in the schedule is to be completed before the next class meeting.

27 January /

Week 1

/

Introduction

Ten Principles of Economics
Current Macroeconomic Issues

Production Possibilities and Economic Growth

Read Chapters 1, 2, and 4.
3 February
(6 February is the last day to drop.) / Week 2 / Supply and Demand
·  Demand
·  Supply
·  Market Equilibrium
/ Applications of Supply and Demand Curves
/
More Applications of Supply and Demand Curves

Read Chapters 23, 24.

10 February /

Week 3

/

Measuring National Output: GDP

·  Definition
·  What’s included in GDP?
·  National output = national income
/ ·  Real GDP

·  Using GDP and real GDP to make comparisons over time: some examples

Measures of the Price Level

·  The yardstick problem
·  Measures of the price level
·  Calculating the price level
·  Calculating real variables
Read Chapter 25
17 February /
Week 4
/ ·  Examples of real and nominal variables
·  Real and nominal interest rates
/

Production and Growth

·  International Comparisons
·  Productivity
/

·  Economic growth and public policy

Read Chapter 26

24 February / Week 5 /

Review

/

Exam #1

/

Saving, Investment, and the Financial System

·  Structure of the financial system
Read Chapter 28
2 March /

Week 6

/ ·  Savings and investment
·  The market for loanable funds
·  Determinants of interest rates
/ ·  Deficits
/ Unemployment·  Measuring unemployment and employment
·  Short-run determinants of unemployment
Read Chapter 29
9 March /
Week 7
/ ·  Unemployment in the long run: the natural rate of unemployment
/

Money, Banking, and the Federal Reserve System

·  Money
·  Banks and their role in the supply of money
·  The Federal Reserve System
Read Chapter 30
16 March /

Week 8

/

·  Monetary policy tools

/

·  More on money, banking, or central banking

Inflation

·  Money and inflation
·  The quantity equation

·  The classical dichotomy and money neutrality

Read Chapter 31

Spring Break
30 March / Week 9 / ·  Welfare effects of inflation

·  The Wizard of Oz

International Economics: Basic Concepts

·  International flows of goods: net imports
·  International capital flows: net foreign investment
·  International trade balance
/ ·  Exchange rates
·  Purchasing Power Parity
·  Foreign Exchange Markets
Read Chapter 33
6 April /
Week 10
/

Review

Exam #2
/

Aggregate Supply and Aggregate Demand

·  Business cycles
Read Chapter 34
13 April
(last day to drop a course with a W) /

Week 11

/ Pass back Exam #2
Review
·  The aggregate demand curve
·  Effects of macro policies on aggregate demand
·  The aggregate supply curve
·  Aggregate supply in the long run: supply-side shocks and economic growth
20 April /

Week 12

/ ·  Aggregate supply in the short run

·  Applications of aggregate demand and supply analysis

/

Monetary and Fiscal Policy

·  Effects of fiscal policy (and budget deficits) on aggregate demand
·  Money, interest rates, and aggregate demand
Read Chapter 35
27 April /

Week 13

/

The Phillips Curve

·  The empirical evidence

·  The birth, death, and rebirth of the Phillips Curve

·  The Phillips Curve in the short run and the long run
·  The Phillips Curve and the natural rate of unemployment
·  Implications for government policy
Read Chapter 36
4 May / Week 14 /

Review

Exam #3

Current Macroeconomic Issues
11 May / Week 15 / Current Macroeconomic Issues
Review
18 May / Final Exam: 7:00 in the usual room