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Macroeconomics – Econ 2
Mark McNeil
Spring 2019

WELCOME: Economics 2, macroeconomics is the second semester of the principles of economics course. In microeconomics, the first semester, we concern ourselves with the behavior of individual economic units. In this course, we deal with the economic units taken as a whole. The major points of study in this course are: inflation, recession, unemployment, the role of the government in the economy (fiscal policy), money and banking, the role of the Federal Reserve in the economy (monetary policy), international trade and finance, and issues related to long run economic growth.

TEXT AND READINGS: The text used in this course will be Macroeconomics, by Timothy Tregarthen & Libby Rittenberg. This book can be obtained for purchase at:
http://www.flatworldknowledge.com. Look for the "Find My Class" button at the top of the page, or,
http://students.flatworldknowledge.com/course?cid=1359417&bid=695502 . This link takes you to the correct page.
Also, this book is available free at: http://open.lib.umn.edu/macroeconomics It is also available to read online here:   http://catalog.flatworldknowledge.com/books/30437/read

To sign up for the Wall Street Journal receiving the student subscription rate: www.wsj.com/studentoffer
There will be additional readings assigned as the term progresses.

GRADING:  There will be 3 midterm examinations (150 points total), a series of quizzes, homework assignments (100 points total), and a comprehensive final examination (100 points). The mid-term examinations and the final examination will be part multiple choice questions and part short essays and problems. The quizzes will be multiple choice only. For every test or quiz you will need to bring a Scantron form (one that has 5 possible answers, a-e) and a simple calculator. You may not use cell phones, PDA’s, or fancy calculators.  When I calculate the grade, I drop the lowest 50 point test score.  Final grades will be assigned as follows: 90% or more of the total points, A; 80% of the total points, B; 70%, C; etc.  The diagram below will help you keep track of your grades.  Please keep all returned tests, quizzes and homework for your records.
 
YOU ARE ENCOURAGED TO: 
1.     Attend. You need to attend class because you are responsible for what happens in the class – if a test or quiz is announced or if something is handed out; because you need a complete set of notes to study for tests or the final exam; because listening to the lectures is very helpful in learning the material; and because the instructor gets lonely and feels rejected when students do not attend the lecture.
2.     Be Optimistic and Do the Work. Hard work and perseverance are rewarded. There is no substitute for spending the time to do the work.  Success in an economics class is almost always the result of hard work and a positive attitude.  This material is manageable - I promise. Stick with it.
3.     Ask questions. If you have questions or difficulties, ask.  Ask questions in class, ask other students, ask me, or go to the tutoring center in the library.
4.     Relate the course material to the real world. Since an economics course will help you understand your world much better, feel free to raise questions about economic events that are taking place during the semester.
5.     Enjoy the process. Learning involves work and is sometimes difficult, but it is also very satisfying and, in some strange way, fun. Make it a positive experience.


STUDENT LEARNING OUTCOMES:
1. Define and explain the fundamental economic problem of scarcity and its consequences - choice, cost, and economizing.
2. Use a production possibilities diagram to show and explain the concepts of limits, choice, cost, efficiency, and economic growth.
3. Construct a supply and demand model and use it to explain how prices are determined in markets.
4. Employ supply and demand diagrams to evaluate the consequences of legally imposed prices (ceiling and floor prices).
5. Calculate the elasticity coefficient for supply or demand in a market and interpret the result.
6. Differentiate the alternative definitions of profit, implicit and explicit costs; and use them to calculate profit given the appropriate data.
7. Apply the law of diminishing returns to show, calculate, and explain costs in the short run.
8. Define, explain and evaluate the different market structures.
9. Determine a firm's profit maximizing (or loss minimizing) quantity and the price given cost and revenue data, for each of the market types.
10. Critically evaluate the efficiency differences between purely competitive industries and monopolies.
11. Assess and interpret the market factors that determine the prices and quantities in resource markets.

SLO 1, Policies using AS-AD: Use the aggregate demand and supply model to assess and interpret the effects of fiscal and monetary policy on output, price and unemployment.
SLO 2, Calculate Aggregates: Define and calculate real GDP, the inflation rate, the unemployment rate, and the economic growth rate; interpret changes in these variables.
SLO 3, Foreign Exchange: Determine the effects of the foreign sector and exchange rates on the macro economy.


WEB SITES AND IMPORTANT DATES:
The McNeil, Microeconomics web page address http://www.mcneilecon.com

The McNeil, Microeconomics YouTube address(for the tutorial videos) is:
http://mcneilecon.com/videopage.html

Please be aware of the following dates:
Martin Luther King, Jr. Holiday: Jan. 21
Last day to drop without a “W”:  Feb. 3
Lincoln/President's Day Holiday: Feb. 15-18
Spring Break: Mar.17-23
Last day to drop:  Apr. 10
Final Exams: May 16-22
Commencement: May 24


OFFICE HOURS:
Office number: BSTIC 201H-- Telephone: (949) 451-5313 -- e-mail: mmcneil@ivc.edu
Office Hours (please note that these are subject to change):
Monday, Tuesday, Wednesday: 2 - 3
Thursday: 10 - 11


This is a grid that will help you keep track of your grade in the course:

Grade Grid


ACADEMIC HONESTY:
a. It is a fundamental requirement of the course that you do your own work and abide by the academic honesty policy. If you cannot do this, you cannot pass the course.
b. Any work you turn in must be your own. If you study and do your homework with other students, you may work out the answers to the problems together, but when you write your answers on the homework paper, it must be in your own words.
c. The penalties for any type of cheating are very severe. Please be sure to do your own work.


FINAL MATTERS:
a. Mobile phones must be turned off. No exceptions.
b. If you want to make audio recordings of the class or use computers in class, please discuss this with me first.
c. The information on this syllabus is subject to change over the course of the semester. Information about any changes will be discussed with and provided to the class.
d. Please forward your student email account to your home account so that I can communicate with you should the need arise. (You can do this on MySite.)
e. All materials for this course are copyrighted. They may not be disseminated or used for anything other than your personal, private, study purposes unless you first recieve my written permission.
e. If you have any disability that impairs your ability to complete this class, please see the people at our DSPS office. They are very helpful.


COURSE OUTLINE AND ASSIGNMENT SCHEDULE

LESSON 1 Introduction

a. Introduction to macroeconomics and the administrative details - humdrum but necessary.
b. Functional relationships
c. The economics - the study of making choices; necessitated by scarcity
d. Opportunity costs and production possibilities
e. Comparative Advantage, and the wealth that is created by specializing and trading
Reading assignment: Chapters 1 & 2, Tregarthen/Rittenberg
Lesson 1: Lecture Outline, Study Questions

LESSON 2 Markets - the Fundamentals

a. Exchanges, markets, information and Mother Teresa
b. Supply and demand - of course.
c. Surplus and shortage, ceiling and floor
d. Applications: rent controls, agricultural policy, health care
Reading assignment: Chapter 3 & 4, Tregarthen/Rittenberg
Lesson 2: Lecture Outline, Study Questions
Test 1, Chapters 1 - 4

LESSON 3 Macroeconomics - The Introduction
a. Business cycles - the wheels of commerce sometimes go flat
b. Nominal vs. real - the issue of price indexes
c. Unemployment - what's natural?
d. The circular flow revisited
e. National income accounting - keeping the books
f. Problems with GDP
Reading assignment: Chapters 5, & 6, Tregarthen /Rittenberg
Lesson 3: Lecture Outline, Study Questions
LESSON 4 The Macro Model and Economic Growth

a. Aggregate demand
b. Aggregate supply - the long and the short (run) of it
c. The issue of gaps and approaches to dealing with them
d. Economic growth, its causes and effects
Reading assignment: Chapters 7, & 8, Tregarthen /Rittenberg
Lesson 4 Lecture Outline, Study Questions
Test 2, Chapters 5 - 8

LESSON 5 Money, Banks, and the Banking System

a. Money honey - making lovely sounds.
b. The Federal Reserve System - making money the easy way.
c. Money creation - the first bank (of Luigi).
d. The banking system.
e. Monetary policy - ruling the world?
f. The markets for bonds and foreign exchange
g. Money demand - count me in!
h. Money market equilibrium.
i. The effects of monetary policy on interest rates and economic activity.
Reading assignment: Chapters 9, & 10 Tregarthen /Rittenberg
Lesson 5: Lecture Outline, Study Questions

LESSON 6 Monetary and Fiscal Policies

a. Monetary policy - targets and tools b. Janet, how does it all work?
c. Problems with monetary policy
d. Fiscal policy - the government mucking about
e. How fiscal policy affects aggregate demand
e. Problems with fiscal policy f. Issues with the national debt
Reading assignment: Chapters 11, & 12 Tregarthen /Rittenberg
Lesson 6: Lecture Outline, Study Questions
Test 3, Chapters 9 - 12

LESSON 7 Consumption and Investment

a. Consumption and the consumption function
b. The aggregate expenditures model
c. Determining the level of investment in the economy
d. Investment demand, aggregate demand, and economic growth

Reading assignment: Chapters 13, & 14 Tregarthen /Rittenberg
Lesson 7: Lecture Outline, Study Questions
LESSON 8 International Trade and Finance
a. The introduction - the value and effects of trade on the macro economy.
b. The balance of trade and payments - keeping the books.
c. The foreign exchange markets.
d. Exchange rate regimes - dirty floats?
Reading assignment: Chapter 15, Tregarthen /Rittenberg
Lesson 8: Lecture Outline, Study Questions
LESSON 9 Other Macroeconomic Issues
 
a. Inflation and unemployment - is there a trade-off?
b. A macroeconomic history of the twentieth century
c. Economic growth - sources and significance.
Reading assignment: Chapters 16 & 17 Tregarthen/Rittenberg
Lesson 9: Lecture Outline, Study Questions
Final Examination

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