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University of Vermont Department of Economics Course Outline EC 11 ‐ C Professor Catalina Vizcarra Time: M/W/F 12:50 – 1:40 P.M. 332 Old Mill Room: Fleming 101 Phone Number: 6‐0694 Fall 2010 Office Hours: M/W 10:30 – 11:30 A.M. or by appointment [email protected] Principles of Macroeconomics The course is an introduction to the fundamental principles of market economies. In particular, it discusses a wide range of conceptual tools that will help students analyze macroeconomic events such as economic growth, inflation, and unemployment. By the end of the semester students should have a good understanding of the basic functioning of the overall economy and of the role that government has in influencing economic activity. Textbook Michael Parkin. Macroeconomics. 9th Edition, Addison Wesley, 2009. Mark Rush. Study Guide (textbook companion), Addison Wesley, 2009. The textbook is required and the study guide is highly recommended. There should be no unpleasant surprises on the tests for those students who regularly attend class, do their homework assignments and the required readings. Course Evaluation Your grade will be based on exams and homework assignments. Three in‐class exams will be worth 30 % each (you will be allowed to drop your lowest grade, so that the in‐
class exams grade will total 60% of your grade). The final exam is cumulative and will be worth 35%. Homework assignments will amount to 5 % of your grade. The dates of the in‐class exams will be announced in class two weeks in advance. The final exam will take place on Tuesday December 14th from 10:30 A.M. to 12:30 P.M. The grading scale will be as follows: A range: Score of 90% or above B range: Score between 80‐90% C range: Score between 70‐80% D range: Score between 60‐70% F: Score below 60% Tentative Course Outline 1. Introduction. What is economics? Scarcity and trade‐offs. Economics as a Social Science. Microeconomics and Macroeconomics ( Chapter 1. Also, review the appendix to Chapter 1: Graphs in Economics). 2. The Economic Problem. Opportunity Cost and the Production Possibilities Frontier. The PPF and Marginal Cost. Preferences and Marginal Benefit. Production Efficiency and Allocative Efficiency. The gains from trade and economic growth (Chapter 2). 3. Demand and Supply fundamentals. The laws of supply and demand. Market Equilibrium and market responses to shocks (Chapter 3). **Exam 1** 4. Measuring Economic Growth. Gross Domestic Product. Nominal and Real GDP. Limitations of Real GDP (Chapter 4). 5. Measuring Unemployment and the Price Level. The basic indicators of the state of the labor market. Unemployment and Full Employment. Types of Unemployment. The Consumer Price Index (CPI). Measuring Inflation (Chapter 5). 6. Economic Growth. Long term trends in economic growth around the world. Why are some countries rich and others poor? Theories of economic growth. Economic Development. (Chapter 6). **Exam 2** 2
7. The Aggregate Supply/Aggregate Demand Model. Aggregate Demand, Aggregate Supply, and Macroeconomic Equilibrium. Macroeconomic Schools of Thought (Chapter 10). 8. Finance, Saving and Investment. Financial Institutions and Financial Markets. The Market for Loanable Funds. The Origins of the 2007‐2008 Financial Crisis. The Global Loanable Funds market (Chapter 7). 9. Money, the Price Level and Inflation. What’s money. How banks create money. The Federal Reserve System. The Market for Money. The Quantity Theory of Money (Chapter 8). **Exam 3** 10. Fiscal Policy. The Federal Budget. Fiscal policy and the business cycle (discretionary vs. automatic stabilizers). The supply side effects of fiscal policy. Generational effects of fiscal policies. Social Security (Chapter 13). 11. Monetary Policy. Monetary Policy Objectives and Framework. The Conduct of Monetary Policy. Alternative Monetary Policy Strategies (Chapter 14). Supplemental Instruction Rebecca Bennett will be our course Teaching Assistant. She will hold supplemental instruction sessions and office hours to help you grasp the material. You can contact her by e‐mail at: [email protected]. The Supplemental Instruction sessions are an opportunity for all of the students to review the content material of the class and improve their understanding of course material, as well as improve their grades. These review sessions will also include learning study strategies, problem solving, and test preparation. Attendance at sessions in voluntary, but it is an important time to get together with people in your class to compare notes, discuss important concepts, practice problems, and prepare for examinations. At each session, Rebecca will guide you through the material and practice problems. Additionally, Rebecca will be available for drop‐in office hours. This means that you can show up any time during her office hours with questions about the class material. This is an opportunity for you to discuss the course material individually and to tackle individual problems you may have understanding the lecture or textbook. You are also free to set‐up an individual appointment to meet with Rebecca. 3
Important Policies: Please review the following codes of conduct: Code of Student Rights and Responsibilities http://www.uvm.edu/~uvmppq/ppq/student/studentcode.pdf Code of Academic Integrity http://www.uv.edu/~uvmppq/ppq/student/acadintegrity.pdf Note: It is the University policy to allow students to honor their religious holidays. Students should submit in writing by the end of the second full week of classes their documented religious holiday schedule for the semester so as to arrange for any necessary make up work in advance. 4