Economics 202 Principles of Macroeconomics Winter 2008 8 and 9 a.m. Instructor: D.W. Hedrick Office: Shaw-Smyser 424 Telephone: 963-2426 Office Hours: M and F 10:00-11:00 a.m. and T and TH 1:30- 3:00 and by appointment. Web Page: www.cwu.edu/~dhedrick/ COURSE DESCRIPTION: This course provides an introduction to the organization of the U.S. economy, long-run economic growth and short-run economic fluctuation, the structure and role of the monetary system, the problems of unemployment and inflation, and the overall impact of government spending and taxation on the macroeconomy. COURSE OBJECTIVES: The principal objectives of the course are to provide students with an understanding of the macroeconomy. Students will become familiar with basic forces behind economic growth and short-run fluctuations in market economies and the basic techniques of modeling overall economic activity. They will develop an appreciation for the challenges economists and policymakers face in using monetary and fiscal policies to alter short-run economic performance and to create policies to help foster long-run economic growth. Students will also be introduced to the importance and the impacts of international trade and finance in modern market economies. TEXTBOOK: The textbook and homework assignments are available online through Aplia. See instructions below for registration and payment Click Here. Required: (1) On-line Mankiw, N. Gregory, Principles of Macroeconomics Economics, 4rd Edition, Thomson – SouthWestern, c2004, or Mankiw, N. Gregory, Principles of Macroeconomics, 3rd Edition, Thomson – SouthWestern, c2004 (2) Aplia – An internet-based tutorial and homework problem that will be used for the required homework. Course Key: AU3Z-UGPC-QL5R (3) Hakes, David , Study Guide to Accompany Principles of Economics. Suggested Reading: The Wall Street Journal and the Economist LEARNING OUTCOMES:1. Apply graphing skills to analyze macroeconomic models. These skills include an understanding of slope and its computation, curve shifts and movements along a curve, and the ability to draw inference from graphs. 2. Utilize quantitative techniques in the analysis of macroeconomic models. These techniques include manipulating and solving simple linear systems of equations, and computing growth rates. 3. Apply economic theory to contemporary macroeconomic policy issues. 4. Identify, explain trends in, and explain the relationships between the following macroeconomic variables: GDP (real and nominal) Sources of economic growth (including capital accumulation, technological innovation, and productivity growth) Inflation Unemployment Fiscal policy (including government spending, taxation, budget deficits, and national debt) Monetary policy (including money supply, interest rates, and the structure of the U.S. banking system) Consumption spending, saving, wealth, and investment Exchange rates, exports, and imports COURSE OUTLINE: Topic Text Chapter(s) I. Introduction to Macroeconomics and Brief Review Split Of Microeconomics Circular Flow 10 Review of Micro 1-8 II. The Data of Macroeconomics National Income 10 Cost of Living 11 III. The Real Economy: Long-Run Analysis Production and Growth 12 Saving and Investment 13 Basic Tools of Finance 14 Unemployment and Its Natural Rate 15 IV. Money and Prices: Long-Run The Monetary System 16 Money Growth and Inflation 17 V. The Macroeconomics of Open Economies Basic of Open-Market Macroeconomies 18 Theory of Open Economies 19 VI. Short-run Fluctuations Aggregate Demand and Supply 20 Monetary and Fiscal Policy 21 Inflation and Unemployment: Short-run 22VII. Controversy in Macroeconomic Policy Debates about Macroeconomic Policy 23 RECOMMENDED STUDY HABITS: Economics is a challenging subject for most and requires significant study to successfully master and apply economic concepts. I suggest that you read, or at least skim, the chapters in the text before they are covered in class. As soon after class as possible, I recommend you retire to a quiet place and reread the text and recopy the lecture notes. This will help reinforce what you have learned and point out areas that you need clarified. Feel free to ask questions in class. Remember, “There is no such thing as a dumb question.” Also, please make use of office hours, particularly when you need a bit more help understanding the material. ASSESSMENT AND EVALUATION: Satisfactory performance on these assessment tools entails graphical, qualitative, and quantitative analyses of contemporary macroeconomic policy issues, as well as an understanding of the variables listed in outcome #4. Grades will be based on twice-weekly online homework assignments, weekly quizzes, three mid-term examinations, and an optional comprehensive final examination. Important: No makeup quizzes will be given for any reason. Makeup midterms and finals will only be given for emergencies and require a note signed by a physician or a senior officer in Student Affairs. Satisfactory performance on these assessment tools entails graphical, qualitative, and quantitative analyses of contemporary macroeconomic policy issues, as