Izmir University of Economics
ECON 102
Spring 2008
Office Hours: W 13.30-15.00 F 10.30-12.00
Gül Ertan Özgüzer
Office:821
Phone: 488 84 82
e-mail: gul.ertan@ieu.edu.tr
webpage: http://homes.ieu.edu.tr/~gertan
PRINCIPLES OF MACROECONOMICS
Objectives: This course is intended to introduce the students to some basic macroeconomic
concepts, with special emphasis on determinants of the level of national income, prices and
employment. Current problems of inflation and unemployment are explored with the aid of
such analysis, and alternative views of the effectiveness of fiscal, monetary, and other
governmental policies are analyzed.
Textbook: Case&Fair; Principles of Economics, Pearson – Prentice Hall, Seventh Edition
The Companion Web site is an ideal complement to the textbook. By visiting the Web site at
www.prenhall.com/casefair students can explore a collection of resources correlated to the
book’s table of contents, including Internet Applications, Readings, and Power Point
Presentations.
Grading
First Midterm: 20%
Second Midterm: 20%
Final: 40%
Attendance, Homeworks, Class Performance: 20%
Course Outline
1. Introduction to Macroeconomics
2. Measuring National Output and National Income
3. Long-run and Short-run Concerns: Growth, Productivity and Inflation
4. Aggregate Expenditure and Equilibrium Output
5. The Government and Fiscal Policy
6. FIRST MIDTERM EXAM
7. The Money Supply and Federal Reserve System
8. Money Demand, the Equilibrium Interest Rate and Monetary Policy
9. SECOND MIDTERM EXAM
10. Money, Interest Rate and Output: Analysis and Policy
11. Aggregate Demand, Aggregate Supply and Inflation
12. FINAL EXAM
Assignments
Students have two types of assignments: Article Assignments and Cyber problems.
a) Newspaper Articles: Students are supposed to discuss and summarize an article that
released in one of the newspapers, which are showed below, within the week.




Financial Times
The Wall Street Journal
Dünya Gazetesi
Referans
b) Cyber problems:
1) Compare the main economic and social indicators of Turkey (such as GDP per capita, external
debt, life expectancy at birth) with the world and with the other countries you wondered.
http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20535
285~menuPK:1390200~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html .
2) Read
the
foreign
direct
investment
report
of
Turkey.
http://www.hazine.gov.tr/guncelduyuru/20070613_UDYatirim_Rapor.pdf . Which sectors had
the highest level of FDI in 2006? Compare these trends with the world trends? Explain the
reforms for the improvement of the FDI environment in Turkey?
3) Go to: http://www.businessweek.com/careers/content/jan1990/b3653163.htm And answer the
following questions:
a. How does your textbook define the terms: (i) Demand-pull inflation, (ii) Cost-push
inflation, and (iii) The natural rate of unemployment?
b. In 1999, when this article was written, there was a concern that the U.S.
unemployment rate could be too low. Explain this concern, making use of the
concepts you defined in part (a)
c. In the article, the relationship between inflation and unemployment is discussed, and
two alternative points of view are given. Briefly, explain these two points of view.
4) You will find the Monetary and Exchange Rate Policy of TCMB for 2008 on
http://www.tcmb.gov.tr/yeni/eng/. What does the terms “Uncertainty Band”, “Transmission
Mechanism” mean? Explain the role of public sector in inflation targeting strategy.
5) During the semester you have learned a lot about the main macroeconomic indicators of an
economy. Log on to http://www.muhasebat.gov.tr/ekogosterge/2007WEB/teg/teg.htm .
Evaluate the changes between 2000-2008 with respect to the indicators of the economy
between the given years by considering the crises years.