Villanova University
School of Business
Introduction to Macroeconomics
Summer 2009
Mary Kelly, Ph.D.
Class Meetings in Bartley 2074:
MTWTF 10:30 AM to 12:30 PM
How to contact me:
Office: Bartley 2016
Office phone: 9-6445
Office Hours: After class or by appointment
Email: [email protected]
Course Description:
This course is an introduction to the study of how economic forces and policies affect the
working of the economy as a whole. Topics addressed include the determination of national
income and output, unemployment and inflation, monetary and fiscal policies, and international
trade and policies.
Course Objective:
At the conclusion of this course, students should be able to evaluate and discuss macroeconomic
issues and the consequences of various policy actions.
Lecture and Discussion
Required Textbook:
Macroeconomics by Campbell R. McConnell, Stanley L. Brue, and Sean
L. Flynn, 18th edition
Other readings:
Selected chapters from the Economic Report of the President – Available
online at
Articles pertaining to macroeconomic issues from the Wall Street Journal
The Wall Street Journal is available for free throughout Bartley Hall.
Articles from quarterly/monthly journals published by regional Federal
Reserve Banks. These articles will be distributed via email or in class.
You should be prepared for class. This includes reading the chapter and any corresponding
material from assigned readings prior to coming to class.
International Assignment
Class Attendance/Participation
(including WSJ discussions and
mini assignments)
I (Chapters 1,2,3,5,6)
II (Chapters 6 through 11)
III (Chapters 12 through 15)
FINAL (All Chapters)
July 06
July 13
July 20
July 27
Total Points
100-94 (188+points)
90-93 (180-186 points)
87-89 (174-178 points)
84-86 (168-172 points)
80-83 (160-166 points)
77-79 (154-158 points)
Points Due Date(s)
74-76 (148-152 points)
70-73 (140-146 points)
67-69 (134-138 points)
64-66 (128-132 points)
60-63 (120-126 points)
Below 60 (120- points)
Grading is determined based on the above criteria. There is NO EXTRA CREDIT offered in
this course. Rounding up or down is based on attendance and class participation.
International Economics Assignment:
Each student will be asked to prepare an economic analysis on a country other than the United
States. The analysis should include an assessment of current macroeconomic conditions of that
country and an historical examination of economic data [GDP and GDP/capita, unemployment
and inflation, trade policies, major exports and imports, recent fiscal and monetary policy
actions, and significant socioeconomic issues]. Students will prepare a 20 minute presentation
using Microsoft PowerPoint or other computerized visual aids and present their findings to the
class. Students are required to submit a full bibliography listing all sources. The presentations
should be informative and entertaining.
Possible websites for information
Market Insight (S&P) is available through the Falvey library
website ( Access the “business databases” and then
select “Market Insight (Standard and Poor’s).” Once there, select a country from the
pull-down menu. Access the DRI report available from the left-hand margin of that page.
Class Attendance/Participation:
There are 20 points for class attendance/participation. Points are earned based on the quantity
and quality of contribution to class discussions. Students who do not attend class or do not
participate in discussions can expect to earn a significantly lower grade for the course.
Wall Street Journal Discussions:
At the beginning of each class, two students will be asked to lead a brief discussion of
the top 4 to 5 macroeconomic topics appearing in the Wall Street Journal during the
previous few days. Exams will include at least one current macroeconomic topic
discussed in class.
It is expected that students will display courtesy and respect for each other during class.
Students are expected to arrive on time and to remain until the class ends. Unless it is an
emergency, bathroom breaks should be taken before or after class. Please turn off all cell
phones prior to the start of class. The computer is for coursework only. Please do not surf the
web, check Facebook, or answer emails during class.
There are four exams during the term, including a cumulative final. Exams must be taken on the
scheduled dates. There will be no make-up exams. NO EXCEPTIONS!
Integrity Policy:
The Code of Academic Integrity of Villanova University addresses cheating, fabrication of
submitted work, plagiarism, handing in work completed for another course without instructor’s
approval, and other forms of dishonesty. For the first offense, a student who violates the Code of
Villanova University will receive 0 points for the assignment. The violation will be reported by
the instructor to the Dean’s Office and recorded in the student’s file. In addition, the student will
be expected to complete an educational program. For the second offense, the student will be
dismissed from the University and the reason noted on the student’s official transcript.
Disability Statement:
It is the policy of Villanova to make reasonable academic accommodations for qualified
individuals with disabilities. If you are a person with a disability, please contact me after
class or during office hours and make arrangements to register with the Learning Support
Office by contacting 610-519-5636 or [email protected] as soon as possible.
Registration is needed in order to receive accommodations.
Course Outline:
Introduction to Economics
Economic perspective
The economizing problem
Production possibility curve
Economic systems
The circular flow model introduced
Articles from Economic Letter, Federal Reserve Bank of Dallas
Understanding Markets
Law of demand and supply
Non-price determinants of demand and supply
Market equilibrium
Articles from Economic Letter, Federal Reserve Bank of Dallas
The U.S. Economy and the World
Private Sector – Consumer and Firms
Public Sector
Intro to International Trade
Intro to Macro and Exam I review
EXAM I (Chapters 1 through 6, except 4)
Measuring Domestic Output (GDP)
Access GDP data (
Calculating GDP
Nominal versus real GDP
Economic Growth, Unemployment and Inflation
Access business cycle data (
Access unemployment and inflation data (
Economic growth (defined and measured)
Labor productivity
The business cycle
Unemployment (defined and measured)
Inflation (defined and measured)
Relationships between Income and Consumption and Income and Savings
Average propensity to consume and save
Marginal propensity to consume and save
Non-income determinants of consumption and savings
The multiplier effect
The Aggregate Expenditure Model (C+I+G+Xn)
Equilibrium in the AE model
Recessionary and inflationary gaps
Exam II review
EXAM II (Chapters 7 through 11)
Aggregate Demand and Supply
Economic Report of the President
Relationship between price and real GDP
Non-price determinants of AD and AS
Equilibrium in the AD-AS model
Fiscal Policy
Economic Report of the President
Legislative mandates
Expansionary and contractionary fiscal policy
Built-in stabilizers
Problems with fiscal policy
Money and Banking – Supply and Demand for Money
Functions of money
Money supply definitions
Money and Prices
Recent developments in money and banking
The Federal Reserve System
The Banking System – Multiple Deposit Expansion
How individual banks create money
Money creation within the banking system
EXAM III (Chapters 12 through 15)
Monetary Policy and the Role of the Federal Reserve
Minutes from the most recent FOMC meeting
Objectives of monetary policy
Monetary policy tools
Effectiveness of monetary policy
Extended AD-AS Model
SR versus LR aggregate supply
Demand-pull and cost-push inflation
Phillips Curve (SR versus LR)
Current Issues in Macro Theory and Policy
Classical versus Keynesian
Pulling it all together: Review/Analyze current U.S. macro conditions and
how we got here.
International Presentations and Semester Review
FINAL EXAM (Chapters 1 through 20)