ECON 202-00: PRINCIPLES OF MACROECONOMICS
Fall 12-week, 2008
INSTRUCTOR:
Dr. Uğur Aker
(To remember the first name, think of SEWER and drop the “S”; to
pronounce the second name, say “I CARE” with a southern accent!)
TIME and PLACE:
MWF 9:30 – 10:50
Hinsdale 201
OFFICE:
113 Hinsdale
OFFICE HOURS:
T 2:00 - 5:00; and by appointment.
If it is important, please make an appointment. Please feel free to stop by my
office to clarify concepts, argue against my opinion, glorify or condemn
economics, etc.
PHONE:
569-5142 office
569-3494 home (Please no calls after 10 PM)
INTERACTION:
My e-mail is: akerus@hiram.edu. This syllabus and lecture notes will be posted
in my web site: http://home.hiram.edu/www/econ. If you forget the address,
you can still get to it from the internal Hiram College web page
(home.hiram.edu) by clicking on Economics under Academic Departments on
the left hand side.
The textbook has its own web site; I expect you to use these web sites extensively.
http://highered.mcgraw-hill.com/sites/0073193976/student_view0/index.html
I communicate through e-mail. If you don’t check your e-mail, make sure your friends convey to
you any important messages, for example change of a test date. Have a network that transmits
information. “I didn’t check my e-mail is not a legitimate excuse!”
I. COURSE DESCRIPTION:
Macroeconomics takes the whole country as a unit and evaluates variables that affect everyone.
Typically a country is where people use the same currency, and there is free movement of goods,
services, people and capital. Ever since the dawn of economics that unit has been sovereign
countries. In the future, as more countries unite the way European Union has, we will use
common currency areas as the unit of scrutiny. In fact, more and more international organizations
take the whole world economy as a single unit.
For a country as a whole, there are some economic variables that influence everyone. Inflation,
unemployment rate, interest rates, exchange rates, recessions, economic growth, laws that regulate
wealth creation and distribution of income are examples of nationwide variables. This course will
provide a framework for understanding how the national economy performs, government's role in
it and what kinds of general policy options are available.
Since we will be concerned for the well being of a whole nation, we will not be interested in
profits. We will not worry about a single person or a single firm or a single industry. Those are
concerns dealt with in microeconomics. In macroeconomics, we are interested in the total output a
country produces; the higher the output, the better off the citizens will be, barring some
overskewed distribution.
ECON 202 Syllabus
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Dr. Ugur Aker
II. GOALS AND OBJECTIVES
This course is a requirement for Economics majors and minors, Accounting majors, and
Management majors.
Principles of Macroeconomics course will provide a basic understanding to comprehend the
economic news that bombards us everyday in all kinds of media. The better we can evaluate the
news, the more enlightened choices we can make as responsible citizens for ourselves, our
families, our communities, our fellow humans and other living organisms.
In this introductory course, one will get a taste of national and international economic forces that
affect businesses and individuals. These include the mechanics of economic growth that creates
wealth, the meaning, creation, and impact of money on the economy, the use of government
budget as a tool, the importance of exchange rates, etc.
At the end of this semester, one should be able to define macroeconomic terms like GDP, interest
rates, exchange rates, budget deficit, trade deficit, etc., and the cause and effect relationships
between these variables. For example, one should be able to trace the decision to increase
government expenditures for security on GDP, interest rates, unemployment, investment, inflation,
exchange rates, and trade balance. Because there are feedback connections between most
macroeconomic variables, cause and effect connections can become very confusing. Hopefully,
one will learn how to delineate the connections by always spelling out the initial conditions. I also
hope that people will also realize the complexity of economic policies.
University of Wisconsin – Madison economist W. Lee Hansen has delineated economics
proficiencies an economics major should have at the end of her undergraduate education (W. Lee
Hansen. "Expected Proficiencies for Undergraduate Economic Majors," Journal of Economic
Education, Summer 2001, pp. 231-242). The article can be summarized as follows:
How To Access Existing Knowledge
Retrieve information on issues
Micro
Macro
Locate published research
Micro
Macro
Track down economic data
Micro
Macro
Find data sources
Micro
Macro
Find information on generation, construction and meaning of data
Micro
Macro
Explain key economic concepts
Micro
Macro
Write a summary of a published article
Micro
Macro
Displaying Command of Existing Knowledge
Macro
Current condition of the economic outlook
Summarize principal ideas of a prominent economist
Micro
Macro
Elaborate a recent controversy in the literature
Micro
Macro
State dimensions of a current policy issue
Micro
Macro
Micro
Macro
Micro
Macro
Interpret Existing Knowledge
What economic concepts are used in the media presentations?
Interpret and Manipulate Economic Data
Interpret Tables
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Dr. Ugur Aker
Identify patterns
Micro
Macro
Construct tables
Micro
Macro
Describe the relationship between three economic variables
Micro
Macro
Perform and interpret a regression analysis
Micro
Macro
Analysis of a current economic problem (5 pp)
Micro
Macro
Prepare a memorandum (2 pp) that recommends action on a policy issue
Micro
Macro
Costs and benefits of a policy issue (4 pp)
Micro
Macro
Formulate questions that illuminate an issue that needs to be researched
Micro
Macro
Prepare a proposal (4-6 pp) for a research project
Micro
Macro
Conduct a research study (20-40 pp)
Micro
Macro
Conduct a group research project with a report
Micro
Macro
Apply Existing Knowledge
Create New Knowledge
This course aims to fulfill some of these proficiencies; assignments and tests will require
accessing, displaying, and interpreting the existing knowledge. However, as an extra credit for the
ambitious, you can prepare a term project and the more proficiencies you display in the project the
more credit you will get. See below for more information.
III. COURSE EXPECTATIONS
1.
TEXTS:
Frank, Robert H. and Ben S. Bernanke, Principles of Macroeconomics, Third edition.
(McGraw-Hill Irwin: Boston, 2007). Required.
2.
ASSESSMENT:
There will be quizzes, assignments and tests. Most of the quizzes and assignments will utilize
the web site of the book. There will be no term paper except for those who wish to do extra
credit (See IV.6). I have scheduled a test roughly every other week covering 2-4 chapters.
The six tests will carry equal weight, Final counting as two tests.
3.
ATTENDANCE:
You are required to attend all classes. If you miss a class, your grade for the course is reduced
by 0.33%. Three absences would lower your grade, say, from 87 to 86, or, from B+ to B!
Knowing that some -- maybe all -- absences can be the consequence of unforeseen
circumstances, I do allow you to make-up absences. Convocations, lectures, symposiums,
articles about macroeconomics, unassigned questions at the end of the chapter may be ways of
writing a page to erase an absence. You will have a week to erase the absence.
Remember, College is not just going to classes and doing the assignments. Please utilize as many
opportunities available for you here as you can. Once you are out of college and working and raising a
family your options for grabbing opportunities will be severely curtailed. Go to as many convocations,
concerts, plays, etc. as you can. Some of the happenings during the Spring Semester are listed under
Calendar in Hiram College's home page.
IV. ASSESMENT AND EVALUATION
ECON 202 Syllabus
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Dr. Ugur Aker
1. GRADE DISTRIBUTION:
95 - 100 A
87 - 90 B+
79 - 80 B71 - 74 C
63 - 66 D+
55 - 58 D-
91 - 94
83 - 86
75 - 78
67 - 70
59 - 60
0 - 54
AB
C+
CD
F
2. TESTS
There are six tests scheduled including the Final. Each test will carry equal weight, except the
Final counts as two tests. The total points of the Tests will add up to 90% of your grade.
3.
HOMEWORK ASSIGNMENTS
For each question answered, you will get a check. To fully get the 10% of the grade, you
have to turn in at least 75 questions/problems. The extras will serve as extra credit.
Homework assignments are best tackled collectively. I do encourage you to work in a group
and discuss the problem. However, plagiarism is a very serious offence and academic
honesty is the basis of our trust for knowledge. Therefore, you should work together but
should not submit the same answer, format, and language in your assignment. After
discussing the problem and the way to answer it, I want each person, individually, to write it
in their own words.
4.
QUIZZES
There may be occasional quizzes if we decide collectively that it would serve a positive
purpose.
5.
ATTENDANCE
Attendance is mandatory. Each absence will cost you 0.33% of your final grade. See III3
above.
6.
EXTRA CREDIT
I am told that some people “hate” economics or find economic reasoning “unintelligible.” I
am willing to concede this possibility but economics, like all other sciences, uses logic to
build the models that capture reality. Logic (and its formal sister mathematics) have served
humanity well in terms of understanding the universe – both cosmic and minute. If for some
reason, my tests do not capture your understanding and commitment to this course, or you
want to do more, I will allow you to engage in a project that will earn you extra credit. I have
to approve the project before you start it. The more proficiencies (See II) you demonstrate in
the project, the more extra credit you will get. Make sure to read the Academic Honesty
section in this syllabus before you do your project.
V. ASSIGNMENTS
The assignment for each chapter is due two days after I finish covering a chapter. You will get
credit for turning the assignment in.
Ch. 1: Review Questions – 1-4. Problems – 1-6, 10.
Ch. 2: Review Questions – 1-4. Problems – 1, 4-10.
Ch. 3: Review Questions – 1-3. Problems – 2-14.
Ch. 4: Review Questions – 1, 3, 7. Problems – 1-5.
Ch. 5: Review Questions – 1-7. Problems – 2-5, 9.
Ch. 6: Review Questions – 2-8. Problems – 1-7.
Ch. 7: Review Questions – 1-7. Problems – 1-8.
Ch. 8: Review Questions – 2-7. Problems – 2-8.
Ch. 9: Review Questions – 1, 3-6. Problems – 1-5, 9.
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Dr. Ugur Aker
Ch. 10: Review Questions – 1-6. Problems – 1, 2, 4-8.
Ch. 11: Review Questions – 1-8. Problems – 1-3, 6, 7.
Ch. 12: Review Questions – 3-5, 7, 8. Problems – 2, 4, 5.
Ch. 13: Review Questions – 1, 2, 5-10. Problems – 1-8.
Ch. 14: Review Questions – 1-7. Problems – 1-8.
Ch. 15: Review Questions – 1-9. Problems – 1-8.
Ch. 16: Review Questions – 1-4, 7-9. Problems – 1-7.
Ch. 17: Review Questions – 1-5. Problems – 1-10.
Ch. 18: Review Questions – 2-4, 6-8. Problems – 2-4, 8, 9, 11.
VI. RESOURCES
1.
TEACHING ASSISTANTS
There will be a couple of Economics majors who can help you with the subject.
2. INTERNET
Here are some web sites related to economics. Your best bet is to go to
http://library.hiram.edu/sub_econ.htm (there is a _ between sub and econ) and browse the economics links.
Federal Reserve sites:
http://www.federalreserve.gov/
http://www.stls.frb.org/fred/
http://www.frbsf.org/
http://www.phil.frb.org/
http://www.bos.frb.org/
http://www.dallasfed.org/
http://www.frbatlanta.org/
http://www.rich.frb.org/
http://www.clev.frb.org/
http://www.kc.frb.org/
http://www.chicagofed.org/
http://www.kc.frb.org/fed101/
http://www.newyorkfed.org/
http://woodrow.mpls.frb.fed.us/econed/class/econsite.html
US Government sites:
http://www.bea.doc.gov/
http://www.govspot.com/
http://stats.bls.gov/eag/eag.us.htm?H1
http://www.fedstats.gov
http://www.census.gov
http://stats.bls.gov/blshome.html
http://www.irs.ustreas.gov/prod/tax_stats/index.html
http://gopher.cbo.gov:7100/1/reports/online
http://www.access.gpo:gov/su_docs/budget98/maindown.html
http://www.whitwhouse.gov/fsbr/esbr.html
World Bank:
http://www.worldbank.org/poverty/wdrpoverty/
http://www.worldbank.org/
http://www.worldbank.org/research/growth/ http://rsqe.econ.lsa.umich.edu/
Private informational:
http://economics.miningco.com/
http://www.economics.ltsn.ac.uk/interneteconomist/index.htm
http://www.economist.com/markets/
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Dr. Ugur Aker
http://www.economist.com/
http://www.swcollege.com/bef/mceachern/economist.html
http://www.fool.com/index.htm
http://econlinks.com/
http://www.marietta.edu/~delemeeg/expernom.html
http://www.economagic.com/
http://www.economicsearch.com/
http://www.globalexposure.com
http://fairmodel.econ.yale.edu
http://netec.wustl.edu/JokEc.html
http://wconwpa.wustl.edu/econFAQ.html
http://www.orst.edu/Dept/pol_sci/sahr/
http://www.NewsEngin.com/neFreeTools.nsf/CPIcalc
http://www.oecd.org
http://www.oanda.com/cgi-bin/ncc
http://govinfo.kerr.orst.edu/cffr_stateis.html
http://garnet.berkeley.edu:3333/budget/budget.html
Government web pages provide a wealth of information. You can access those related to economics and
business by going to the library web page from Hiram's web site and clicking on
the Government documents and scrolling down to "Economics/Business."
VII. SCHEDULE:
WEEK
Aug 25-29
Sep 1-5
Sep 8-12
Sep 15-19
Sep 22-26
Sep 29 Oct 3
Oct 6-10
Oct 13-17
Oct 20-24
Oct 27-31
Nov 3-7
Nov 9-13
Nov 16-20
MONDAY
Labor Day
Ch. 3
Ch. 4
Ch. 6
Ch. 7
Ch. 8
Test Ch. 7-9
Ch. 11
Ch. 12
Ch. 13
Ch. 14
Ch. 15
WEDNESDAY
Ch. 2
Ch. 4
Ch. 5
Ch. 6
Ch. 7
Ch 9
Ch. 10
Ch. 11
Ch. 12
Ch. 13
Ch. 15
Ch. 16
FRIDAY
Getting acquainted. Ch. 1
Ch. 3
Test Ch. 1-3
Ch. 5
Test Ch. 4-6
Ch. 8
Ch. 9
Ch. 10
Fall Weekend
Test Ch. 10-12
Ch. 14
Test Ch. 13-14
Ch.16
FINAL: Monday, November 24, 2008 at 6:00 PM: Chapters 15-16 and AP Test.
AP MACROECONOMICS EXAMINATION CONTENT SPECIFICATIONS
I. Basic Economic Concepts
(8 - 12%)
A.Scarcity, choice, and opportunity costs
B.Production possibilities curve
C.Comparative advantage, specialization, and exchange
D.Demand, supply, and market equilibrium
E. Macroeconomic issues: business cycle, unemployment, inflation, growth
II. Measurement of Economic Performance
A.National income accounts
1. Circular flow
2. Gross domestic product
3. Components of gross domestic product
4. Real versus nominal gross domestic product
B.Inflation measurement and adjustment
1. Price indices
(12 - 16%)
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Dr. Ugur Aker
C.
2. Nominal and real values
3. Costs of inflation
Unemployment
1. Definition and measurement
2. Types of unemployment
3. Natural rate of unemployment
III.
National Income and Price Determination
A.Aggregate demand
1. Determinants of aggregate demand
2. Multiplier and crowding-out effects
B.Aggregate supply
1. Short-run and long-run analyses
2. Sticky versus flexible wages and prices
3. Determinants of aggregate supply
C. Macroeconomic equilibrium
1. Real output and price level
2. Short and long run
3. Actual versus full-employment output
4. Economic fluctuations
(10-15%)
IV.
Financial Sector
(15-20%)
A.Money, banking, and financial markets
1. Definition of financial assets: money, stocks, bonds
2. Time value of money (present and future value)
3. Measures of money supply
4. Banks and creation of money
5. Money demand
6. Money market
7. Loanable funds market
B.Central bank and control of the money supply
1. Tools of central bank policy
2. Quantity theory of money
3. Real versus nominal interest rates
V. Inflation, Unemployment, and Stabilization Policies
(20-30%)
A. Fiscal and monetary policies
1. Demand-side effects
2. Supply-side effects
3. Policy mix
4. Government deficits and debt
B. Inflation and unemployment
1. Types of inflation
a) Demand-pull inflation
b) Cost-push inflation
2. The Phillips curve: short run versus long run
3. Role of expectations
VIII. DISCLAIMER
Plans are wishes. Not all wishes do come true. Those with the wisdom of ages warn us about the
curse of wishes that do come true. We may change parts of this syllabus as we see fit in the course
of the semester. For the sake of participatory democracy, I promise to include the class in the
decision-making before I make any changes.
ACADEMIC HONESTY (Hiram College Catalog, October 29, 2002)
Hiram College believes that the development of intellectual honesty is at the heart of a college education. The
process of education is severely compromised if we cannot depend on the academic integrity of each member of the
community. Moreover, the principles of academic honesty are aligned closely with the principles of good scholarship
and research, principles of critical thinking and reasoning, and the standards of professional ethics. Thus, students who
fail to practice academic honestly not only risk losing the trust of the academic community; they also fail to develop the
most essential skills and abilities that characterize a college graduate.
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Dr. Ugur Aker
Any student who violates the integrity of the academic process will be subject to punishment, including
possible dismissal from the College. There are many forms of academic dishonesty including the giving or receiving of
help in any form on an examination, the sale or purchase of papers and test materials, the abuse of computer privileges
and regulations, the misuse or abuse of library resources, and any other action which debases the soundness of the
educational process. Faculty members and librarians are expected to report all instances of academic dishonesty to the
Associate Dean of the College who will provide advice on an appropriate action.
Plagiarism
The most common form of academic dishonesty is plagiarism. An essay or term paper is designed to develop
a student’s own ability to think clearly and critically about a subject and to express ideas fluently. Similarly, a
laboratory report is designed to develop a student’s capacity to record observed phenomena and to interpret them
correctly. A creative work in the arts is intended to demonstrate the student’s own creative abilities. If a student
corrupts these purposes by receiving unacknowledged assistance from a written source, he or she is guilty of
plagiarism.
To avoid any suspicion of plagiarism, students should acknowledge any work not their own; in other words,
any language, illustration, information, or diagram which is not original must be documented. Students are urged to
visit the Writing Center for help in understanding these guidelines.
Hiram College expects students to develop a thorough understanding of what constitutes plagiarism and to
avoid it in all forms of campus communication. When plagiarism occurs in work submitted for a grade in a course, it is
particularly serious and becomes a reportable offense. There are two categories of such offenses. Category I includes
instances of plagiarism in which there is clear intent to falsify, mislead, or misrepresent another’s work as one’s own.
An obvious example would be an attempt to hide the source of plagiarized material by not even including it in the
paper’s bibliography. Category II includes instances in which there is not clear intent. Instead, there is evidence that the
student made a simple mistake in citation, or did not fully understand what constitutes plagiarism.
The process for dealing with cases of plagiarism is intended to facilitate the development of the student as a
scholar who practices academic honestly. First offenses usually involve some penalty, depending on severity. Students
are expected to learn from these mistakes and, therefore, there is less tolerance for subsequent offenses.
Cases of plagiarism are handled in the following ways:
• The course instructor judges whether the offense is Category I or II.
• All cases of plagiarism are reported to the Associate Dean of the College who will maintain a database of plagiarism
cases.
• For first-offense, Category II cases involving an underclass (not senior) student, the course instructor has the option of
allowing a makeup of the paper or assignment, or a penalty. These cases do not require a conference with the Associate
Dean and the student. All other cases require a conference with the Associate Dean.
• Category I cases, even if first offense, may result in an F in the course.
• A pattern of Category II offenses, or any second-offense, will usually result in a suspension from the College.
• Records of plagiarism are kept by the Associate Dean. The student’s advisor (for traditional students) or the Weekend
College Dean (for WEC students) is informed of the results of plagiarism cases.
• Appeals of plagiarism case decisions may be made to the Dean of the College.
Special Note on Collaborative Work
Students must assume that collaboration in completion of assignments is prohibited unless explicitly
specified by the instructor. Students must acknowledge any collaboration and its extent in all submitted work. This
applies to collaboration on editing as well as collaboration on substance. (This statement is not intended, however, to
discourage students from forming study groups.)
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