CXC Math Grade I, II or III (Grade II Pre 1998), O'Level Math Grade C or EC08A Colin Bullock 876-512-3012 SAMB E208 Monday 3-5 p.m.

ECON1002 : Introduction to Macroeconomics

Course Description This course introduces students to basic macroeconomic  principles. It familiarizes students with the  tools and methods of macroeconomic analysis. Economics is about the efficient  use of resources. This course will teach students how to think like a macroeconomist. That is, it teaches students how to efficiently analyze aggregate economic issues such as growth, inflation and unemployment.  Emphasis will be placed on the analysis of these issues in a Caribbean context.   At the end of the course students should be able to: 1. Define economics 2. Explain the difference between Microeconomics and Macroeconomics 3. Summarize the basic economic tools and principles 4. Define and explain the main macroeconomic indicators in an economy 5. Explain how equilibrium output is determined in the basic macroeconomic model 6. Illustrate and explain the relationship between aggregate demand and aggregate supply 7. Describe the role of the government in the economy 8. Illustrate and explain equilibrium in an open economy Prescribed Texts Bernanke, B.S. and Frank, R.H., Principles of Economics, McGraw-Hill, 4th edition, 2009.(BF) Baumol, W. and Blinder A.S., Economics Principles and Policies, Thomson Southwestern, International Student Edition (BB) Case, K.E., Fair R.C. and Oster S.M., Principles of Economics, Prentice Hall 9th Edition, 2009 (CFO) Course Outline 1. Basic Economic Principles and Tools 1.1 Introduction to Economics 1.2 Macroeconomics vs. Microeconomics 1.3 Normative vs Positive Economics 1.4 Basic Concepts and Tools 1.5 The Fundamental Economic Problem 1.6 Market Equilibrium 1.7 The Building Blocks of Macroeconomic Analysis Readings: BF 1 (with appendix) ,2, and 3; BB 1 (with appendix), 2, 3, 4, 22; CFO 1,2,3.   2. The Three Main Macroeconomic Indicators 2.1 Output and Economic Growth 2.2 Unemployment 2.3 Inflation Readings: BF 17-19; bb 22-24; CFO 20-22.     3. The Basic Macroeconomic Model 3.1 Components of Aggregate Expenditure 3.2 Determining Equilibrium Output (Short Run) 3.3 Aggregate Demand (Related to the Price Level) 3.4 Aggregate Supply (Related to the Price Level) 3.4 Equilibrium of AD and AS (Output, Prices, Interst rates and Employment) Readings: BF 22,23; BB 25-27; CFO 23,27,28   4. The Role of the Government in the Economy 4.1 Introduction to the Role of Government 4.2 Fiscal Policy 4.2 Monetary Policy 4.3 Expansionary and Contractionary Policy Effects Readings: BF24-26; BB 28-32; CFO 24-26.   5. International Macroeconomics 5.1 The Economic Basis for International Trade 5.2 Barriers to International Trade 5.3 Fixed vs. Flexible Exchange Rates 5.4 Equilibrium Output in an Open Economy with Fixed Exchange Rates 5.5 Exchange Rate Determination in a Free Market 5.6 The Balance of Payments Readings: BF 2,27,28; BB 34-36, CFO 34,35.   Additional Readings 1. CARICOM Secretariat, Caribbean Trade and Investment Report 2000, Ian Randle Publishers, 2000 (CTIR) 2. UNDP, Human Development Report 2001, Oxford University Press, 2000 3. PIOJ and UNDP, Jamaica Human Development Report 2000, PIOJ, 2000 Highly Recommended Texts (can be used in addition to the prescribed text): Baumol, William J and Blinder, Alan:Economics Principles and Policy.Thompson South Western, ISE. Cawe, K.E., Fair, R.C. Principles of Economics, Prentice Hall, 8th Edition. Course Assessment   Final Exam                              50% Mid-term Exam                       40% Graded Tutorials                     10%