UNIVERSITY OF CONNECTICUT
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Department of Economics
ECON 1202-1: PRINCIPLES OF MACROECONOMICS
Spring 2016
Instructor: Owen Svalestad
Office Hours: TTh 12:30 – 1:20 PM
REQUIRED TEXT
Hubbard and O’Brien, Macroeconomics 5th Ed
Please see the instructions in Blackboard for My Econ Lab. This is a requirement.
COURSE DESCRIPTION
Economics is the study of how individuals and societies allocate their limited resources in attempting to satisfy their unlimited wants. Macroeconomics is the study of how an entire national economy functions and interacts with other economies. It seeks to determine the conditions under which the available resources of a nation can be utilized to maximize the economic well-being of its people. Inevitably, it deals with analyzing and predicting the effectiveness of government policies and actions intended to promote stable economic growth and prosperity. It attempts to explain the causes of such economic diseases as unemployment, inflation, government deficits, recessions, and fluctuations in financial markets, and to predict the consequences of policies aimed at alleviating these conditions. Macroeconomics is concerned with such questions as: Is the U. S. economy self-regulating or is government intervention needed to maintain stable growth? What would be the consequences of an increase (or decrease) in federal taxes? Is it possible to achieve full employment without high inflation? Why do business executives and political leaders analyze every word spoken by Ben Bernanke, Chairman of the Federal Reserve? Would U. S. workers be better off or worse off if all barriers to free trade with the rest of the world were eliminated? Why is much of what we eat, wear, drive and play with imported from abroad, and is this a problem?
This semester you have the opportunity to study the underlying principles of macroeconomics at a time when the US economy is experiencing a slow recovery from the worst recession since WWII. Economic output has slowed to a 1% annual rate, and the national unemployment rate, which peaked at 10.7% during the recession, has decreased to 5%. The most urgent need is jobs, job, jobs. The real estate market is severely depressed due to the sub-prime lending crisis. Consumer debt is dangerously high, income and job growth are stagnant; consumers are not spending, ,homeowners are defaulting on mortgages, mortgage brokers are going bankrupt and a few banks are failing. Business profits are mixed, with rebounds for some and missed targets for many. The Obama fiscal stimulus package has run its course. The Federal Reserve Board has been keeping short-term interest rates below 1%, but can do little more to stimulate the economy. . Are we headed for a double-dip recession? If so, can government do anything about it? Will it? Should it? How
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These and other economic issues that may arise during the semester will be discussed and analyzed.
COURSE FORMAT
It is important for you to attend class, take good notes and participate in discussion. It is expected that you will read the scheduled material before it is discussed in class. We will follow the sequence of topics as presented in the text book. The primary focus will be on basic Macro theory and how it may apply to the existing economy and its many issues. My class format is lecture based at the same time encouraging participation and discussion. The goal is to understand basic economic theory and how it can explain our economy today. If you have to miss class it is important that you get the notes from either me or a classmate. Mutual respect is the name of the game. I will treat everyone with respect and I expect the same. Please no leaving class early, no disruptive activity and please do not use cell phones and the like during class. Exam questions will primarily be multiple choice based.
GRADING
Your final grade will be determined in the following manner: Subject to change
1) Chapter Quizs- 1/3 of grade
2) Midterm 1/3 of grade
3) Final 1/3 of grade
PLEASE NOTE- Each quiz will have a due date that will be strictly enforced. Resets are done for only significant reasons. There will be about 14 quizzes, the two lowest scores will be droped. The two semester exams will be given in class during Midterm and Final exam times respectively.
ACADEMIC HONESTY
Studying with a classmate or a small group or tutoring is encouraged. Any student caught cheating on an exam or otherwise submitting graded work that is not entirely their own will receive a grade of zero for the offending activity and the offense will be reported to the Department Chair and the Dean's office. The University policy on academic misconduct applies and you are advised to read that policy, which is posted on Course Compass under Course Materials.
HOW TO GET HELP
You are assigned to an instructor who will meet with you and a smaller group. My Econ Lab will have many sources of information that will be helpful.
OUTLINE OF TOPICS- Subject to change
I. Introduction
Chapter 1- Economics: Foundations and Models – Quiz 1
Chapter 2- Tradeoffs, Comparative Advantage and the market- Quiz 2
Chapter 3- Where Prices Come From: The Market- Quiz 3
Chapter 4- Economic Efficiency: Government Involvement- Quiz 4
ll. Macroeconomic Foundations and Long-Run Growth
Chapter 8- Measuring GDPTotal Income and Production- Quiz 5
Chapter 9- Unemployment and Inflation- Quiz 6
Chapter 10-EconomicGrowth, Financial System and Business
Cycles-
Quiz 7
MIDTERM EXAM 1
Chapter 11- Long Run Economic growth: Sources and Policies- Quiz 8
lII. Short Run Fluctuations
Chapter 13- Aggregate Demand and Supply- Quiz 9
IV. Monetary and Fiscal Policy-
Chapter 14- Money, Banks and the Fed- Quiz 10
Chapter 15- Monetary policy- Quiz 11
Chapter 16- Fiscal Policy- Quiz 12
Chapter 17- Inflation, Unemployment and Fed Policy- Quiz 13
Chapter 18- Macroeconomics in an Open Economy- Quiz 14
Final EXAM 2
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