University of International Business and Economics
International Summer Session
ECO 120: Macroeconomics
Term: June 29-July 31, 2015
Instructor: Professor Yong Bao
Home Institution: Purdue University
Office hours: TBD
Email: ybao@purdue.edu
Class hours: Monday through Friday, 95 minutes each day (2375 minutes in total)
Discussion session: 2 hours each week (600 minutes in total)
Credit: 4
Total contact hours: 66 hours (45minutes each)
Course Description
This course focuses on the analysis of aggregate economic activity with respect to the level,
growth and stability of national income. We examine the major theories used by macro
economists to analyze both national economies and the international economy. Topics
include the measurement and explanation of aggregate economic performance, monetary
and fiscal policies, business cycles, international trade, capital flows, and exchange rates.
Students apply macroeconomic analysis to current policy-related topics such as
unemployment, inflation, budget deficits, and trade balances.
Course Goals
Upon successful completion of the course, the student should be able to:
 Understand that macroeconomics is a study of the national and international economic
aggregates.
 Demonstrate an understanding of the nature of macroeconomics as distinct from
microeconomics.
 Exhibit knowledge of the procedures and challenges inherent in measuring economic
growth with the help of GDP.
 Understand the basic concepts of inflation rate and unemployment rate as measures of
macroeconomic performance of an economy.
 Explain how Consumer Price Index (CPI) is computed and used as a primary measure of
cost of living.
 Understand the distinction between long term economic growth and short run
fluctuations in economic activity and the various policies that may affect them.
 Understand the nature of Saving, Investment, Money and Aggregate Price level as
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macroeconomic aggregates of great significance.
Analyze business cycle fluctuations using the Aggregate Demand-Aggregate Supply
model and understand the role of expenditure multipliers as policy tools.
Understand the nature of monetary as well as fiscal policies to affect the business cycle
fluctuations.
Learn about the small open economy version of the AD-AS model, real and nominal
exchange rates, and purchasing power parity.
Required Text
N. Gregory Mankiw, Brief Principles of Macroeconomics, 7th Edition, Cengage Learning,
2014, ISBN13: 9781285165929.
(E-book version available at http://www.coursesmart.com/9781285165929.)1
Exams
There will be a mid-term exam and a final exam, both will be closed-book, closed-notes
exams. While the use of non-programmable calculators will be allowed, computers, cell
phones, iPods or any such electronic device will not be permitted in the exam room. Also,
no make-ups will be given after the regularly scheduled exams.
Homework Assignments
Homework problems will be assigned regularly. The purpose of the homework is to
prepare students for the exams. The homework is a very important part of the course. No
matter how well you think you understand the material presented in class, you won't really
learn it until you do the problems. Some homework assignments will have due dates and
your regular and timely submission of these homework assignments will be an important
part of the assessment of your course grade. For homework assignments that do not have
due dates, students are strongly encouraged to try the questions before the instructor goes
over them in class.
1
A more comprehensive version of this book is: N. Gregory Mankiw, Principles of
Macroeconomics, 7th Edition, Cengage Learning, 2014, ISBN13: 9781285165912. (E-book
version available at http://www.coursesmart.com/9781285165912.) This book has additional
chapters that will not be covered, but may be of interest to you, especially if you are not taking
Microeconomics at the same time.
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Attendance
Summer school is very intense and to be successful, students need to attend every class.
Occasionally, due to illness or other unavoidable circumstance, a student may need to miss
a class. UIBE policy requires a medical certificate to be excused. Any unexcused absence
may affect the student's grade. Moreover, UIBE policy is that a student who has more than
1/3 of the class in unexcused absences will fail the course.
Grading Policy
Assignments and examinations will be graded according to the following grade scale:
A
90-100
A–
85-89
B+
82-84
B
78-81
B–
75-77
C+
72-74
C
68-71
C–
64-67
D
60-63
F
below 60
In this course, grading will be based on the following:
Class Participation/Attendance
Homework
Midterm Exam
Final Exam
10%
20%
30%, July 16, 2015
40%, July 31, 2015
Course Schedules
WEEK 1 (June 29 – July 3)
1. Fundamental Principles of Macroeconomics
Introduction: Ten Principles of Economics
Methodology of Macroeconomics
Supply and Demand
Assignment 1 on Chapters 1-4 due 07/07
2. The Data of Macroeconomics
Measuring a Nation's Income
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Chapter 1
Chapters 2, 3
Chapter 4
06/29
06/30,07/01
07/02
Chapter 5
07/03
WEEK 2 (July 6 – July 10)
Measuring the Cost of Living
Assignment 2 on Chapters 5-6 due 07/10
3. The Real Economy in the Long Run
Production and Growth
Saving, Investment, and the Financial System
The Basic Tools of Finance
Unemployment and Its Natural Rate
Assignment 3 on Chapters 7-10 due 07/14
WEEK 3 (July 13 – July 17)
4. Money and Prices in the Long Run
The Monetary System
Money Growth and Inflation
Assignment 4 on Chapters 11--12
Review
Midterm Exam
5. The Macroeconomics of Open Economies
Open-Economy Macroeconomics: Basic Concepts
Chapter 6
07/06
Chapter 7
Chapter 8
Chapter 9
Chapter 10
07/07
07/08
07/09
07/10
Chapter 11
Chapter 12
07/13
07/14
07/15
07/16
Chapter 13
07/17
Chapter 14
07/20
Chapter 15
07/21, 22
Chapter 16
07/23, 24
Chapter 17
07/27,28
Chapter 18
07/29
WEEK 4 (July 20 – July 24)
A Macroeconomic Theory of the Open Economy
6. Short-Run Economic Fluctuations
Aggregate Demand and Aggregate Supply
Assignment 5 on Chapters 13--15 due 07/27
The Influence of Monetary and Fiscal Policy on Aggregate Demand
WEEK 5 (July 27– July 31)
The Short-Run Trade-off between Inflation and Unemployment
7. Macroeconomic Debates
Debates over Macroeconomic Policy
Assignment 6 on Chapters 16-18
Review
Final Exam
07/30
07/31
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