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Department of Economics
East West University
Semester: Fall 2016
Course outline
ECO 102: Introduction to Macroeconomics (Section-3)
Credit: 3
Pre-requisite: ECO101
Course Teacher:Farzana Islam, Senior Lecturer, Department of Economics
Room # 327
Contact # 01732337702
E-mail:[email protected]
Class hour:Sunday &Thursday
Time: 11:50 – 01:30
Room # 212
Office Consultancy Hours
Make an appointment via email or in person before walking-in. Walk-ins are also welcome but
make sure you have your problem topics ready beforehand so not to waste other students
time. Be advised that consultancy hours are for strictly academic purposes. Irrelevant
discussions unrelated to course topics will not be entertained.
Day
Timing
Sunday
(10:00 – 11:50) & (03:00-03:30)
Monday
(10:00 – 11:50) & (03:00-03:30)
Tuesday
(1:00 – 3:30)
Wednesday
(10:00 – 11:50) & (03:00-03:30)
Thursday
(10:00 – 11:50) & (03:00-03:30)
Marks Distribution:
Attendance ,assignments and quizzes
25%
1st Mid Term Exam
25%
2nd Mid Term Exam
25%
Term Final Exam
25%
Grading Policy:University grading and Performance evaluation policy will be followed.
Course Rules & Guidelines:
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Attending the classes regularly and timely is highly desirable.
No make up exams and make up quizzes except for serious compelling reasons.
Assignments, Term Papers will not be accepted after deadline.
Mobile Phones should be turned off or be silenced during classes and exams.
No comprehensive exams. Each exam will consist of its own respective part.
Course description:
This course introduces the basic principles and tools of Macroeconomics. Macroeconomics is
the policy oriented part of economics. This course will deal with the concepts and
measurements of national income, inflation, unemployment, with an attempt to reveal how
macro-economic variables such as national income, unemployment, inflation can be
manipulated by government policies. The course will also introduce the macroeconomic models
using graphical approach: consumption function, investment theory, equilibrium and
disequilibrium models of macro economy- classical and Keynesian theory. The focus of the
discussion will be to acquaint students of macroeconomic fundamentals of an economy with
special emphasis on the economy of Bangladesh.
Recommended Text: Macroeconomics (Latest Edition) by Paul Krugman & Robin Wells
Course contents:
o Basic Concepts: Gross domestic product, calculation of Gross domestic products,
exclusion of GDP, difference between GDP and GNP, Nominal GDP, Real GDP,
Construction of CPI index, measurement of inflation, difference between GDP deflator
and CPI Inflation
o Economy in the long run: economic performance and economic growth, production
function and national income distribution among factors, implication of factor’s share.
o Business Cycle: relationship between GDP growth, inflation and unemployment, sources
of the economic growth, convergence in the economy: East Asian Miracle.
o Real Sector Economy: consumption function, consumption and savings relationship,
paradox of thrift, investment function and interest sensitivity, household choice of
income and consumption.
o Money Market: money demand and money supply, quantity theory of money,
Keynesian money demand function, money supply and inflation, money multiplier and
money creation, money market equilibrium and monetary policy.
o Income determination: Keynesian cross, aggregate demand function, multiplier process,
impact of fiscal and monetary policies, recessionary & inflationary gap, effectiveness of
fiscal and monetary policies.
o Unemployment: Calculation of unemployment, Okun’s law, equilibrium in the labor
market, impact of union on the labor market and employment, unemployment and
aggregate supply function.
o Macroeconomic Equilibrium: Aggregate demand and supply model, determination of
price level, causes of inflation, inflation fiscal and monetary policies.
o Open Economy: linkage between closed and open economy, when trade will occur, capital flow
and balance of payment equilibrium, exchange rate determination, fiscal and monetary policies
under fixed and flexible exchange rates.
Learning Outcomes:
Upon successful completion of the course, the student will be able to:
 Discuss key macroeconomic concerns, including national income accounting, saving and
investment, and market forces.
 Describe the determinants of the total output and the ways to measure nominal Gross
D0mestic Product (GDP) as well as real GDP.
 Compare and contrast definitions of total employment and unemployment, the three
forms of unemployment, and inflation.
 Explain the model of aggregate demand and aggregate supply.
 Analyze the government’s role in the economy and examine how it uses its fiscal policy
and monetary policy to influence macroeconomic variables in order to enable macro
and micro economic stability.
 Describe the mechanics of money supply in detail. Specifically, the student will be able
to identify different types of money; explain the money creation process, the money
multiplier, the money multiplier, and the process of interest rate determination; and
discuss the role of the Central Bank and its tools of monetary policy.
 Identify and analyze major theories of Economic growth.
 Present the concepts behind international trade.
Exam Schedule:
Midterm I
Midterm II
Final Exam
20 October 2016
17 November 2016
15th December 2016
Lecture Schedule
First Week
A First Look at Macroeconomics
GDP Calculation
Second Week
Economic Growth
Business Cycle, Jobs and Price Level
Third Week
Aggregate Supply and Demand
Fourth Week
Unemployment and Inflation
Review for the Midterm I
Fifth Week
Expenditure Multipliers
Sixth Week
Fiscal Policy
Money, Banking and Interest Rates
Seventh Week
Exchange rate
Eighth Week
Inflation
Review for the Midterm II
Ninth Week
Monetary Policy
Tenth Week
Fiscal and Monetary Interaction
Eleventh Week
International Trade
Twelfth Week
Review for the final
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