ECO102: PRINCIPLES OF MACROECONOMICS
COURSE OUTLINE
SEMESTER: SPRING 2013
FACULTY MEMBER’S DETAILS
NAME:
OFFICE HOURS:
EMAIL:
WEB SITE:
Mr. Marios Demetriades
By Appointment
marios_demetriades@hotmail.com
http://www.cdacollege.ac.cy/site/travel-ll/index.htm
PREREQUISITE (S): ECO 101 Principles of Microeconomics
DESCRIPTION:
The course is an introduction to the principles of macroeconomics. It exposes students
to the theory of national income accounting, aggregate supply and demand, income
and spending, money and banking, economic growth and economic fluctuations,
inflation and unemployment, fiscal and monetary policy and international linkages.
OBJECTIVES:
By the end of the course, students are expected to:
- Justify the importance of a model-based approach to macroeconomic analysis
as well as how the various models are connected
- Evaluate the action policy makers undertake, when the economy fails to
function effectively on its own
- Analyse current economic issues, in the context of an economic frame
- Distinguish the important links connecting different economies
- Demonstrate an ability, to explain and test macroeconomic theory by using
real-world data.
MAIN BOOK(S)
Title:
Economics
Author(s):
Samuelson, P.A., Nordhaus, W.
Edition/Year: Eighteenth / 2005
Title:
Economics
Author(s):
C.R. McConnel, S.L. Brue,
Edition/Year: 16th ed./2005
Title:
Principles of Economics
Author(s):
Mankiw G.N.
Edition/Year: Fourth / 2006
Title:
Macroeconomics
Author(s):
Mankiw G.N.
Edition/Year: Sixth / 2007
ADDITIONAL READING AND OTHER LEARNING RESOURCES
Websites


Library of Economics Homepage: www.econlib.org
Economics About Homepage: economics.about.com
Journals



American Economic Review
Quarterly Journal of Economics
Journal of Macroeconomics
Periodicals


Financial Times
The Economist
SCHEDULE
WEEKS TOPICS
1
The Fundamentals of Macroeconomics
Overview of Macroeconomics: Aggregate Supply and
Demand; Macroeconomic Issues; Objectives and
Instruments. Measure National output: the Yardstick of
An Economy; Performance; Details of the National
Accounts.
ACTIVITIES
Discussion,
Questions,
Applications
and Examples
2
Consumption and Investment
Discussion,
Consumption and saving: Marginal propensities; the Questions,
Instability of Investment.
Applications
and Examples
3
Theory of Output Determination
The Theory of Output Determination: Classical and
Keynesian Approaches to Output Determination; the
Multiplier Model; the Paradox of Thrift; the Making of
Fiscal Policy.
Discussion,
Questions,
Applications
and Examples.
4
Business Cycles and Aggregate Supply and Demand
Aggregate Supply and Business Cycles: Determinants of
Aggregate Supply: Okuns Law; Supply – Side
Economics; Business Cycles Theories; Forecasting
Business Cycles.
Discussion,
Questions,
Applications
and Examples
5
Unemployment
Analyze Unemployment: Importance of Unemployment;
Measuring Unemployment; Economic Interpretation of
Unemployment.
Discussion,
Questions,
Applications
and Examples
Revision of Mid Term material
6
7
8
Mid-Term Examination
Inflation
Inflation: Definitions and Costs; Causes and Cures;
What is Inflation; the Impact of Inflation; Analysis of Discussion,
Inflation’s Costs; Alternative Sources of Inflation; the Questions,
Philips Curve; Open Issues; Incomes Policy.
Applications
and Examples
Money, Commercial Banking and Monetary Policy
Discussion,
Money and Commercial Banking; Central Bank and Questions,
Monetary Policy, History of Money and Banks, Banking Applications
as Business; the Process of Creation of Bank Deposits; and Examples
How Monetary Policy Works to Control Spending; How
Control Banking Works; the Nuts and Bolls of
Monetary Policy.
9
Policies for Growth and Stability
Monetarism and the Demand for Money: the Demand
for Money: How Money Affects Output; MonetarismModern Monetarism; the Rational Expectations
Postulates.
The Fiscal-Monetary Mix and Government Deficits:
Modern Public Finance; the Fiscal Monetary Mix; Do
Deficits Crowd of Investment; Measuring and History
of Government Debts.
10
The economic role of the government- The process of Discussion,
economic growth and development
Questions,
Applications
Economic Role of Government: the Growth and and Examples
Functions of Government; Public Choice; Government
Expenditures; Principles of Taxation: the Theory
Problem of Tax Incidence. The Theory of Economic
Growth; the Trends and Sources of Economic Growth;
The Economics of Developing Countries; Population
Economic
Condition;
Theories
of
Economic
Development.
International Trade
Discussion,
International Trade and the Theory of Comparative Questions,
Advantage; the Gains from Trade and the Law of Applications
Comparative Advantage; the Balance of International and Examples
Payments.
11
Discussion,
Questions,
Applications
and Examples
12
13
Economics of Protectionism
Protective Tariffs: Quotas and Free Trade; Supply and
Demand Analysis of Trade and Tariffs; the Economics
of Protectionism.
Discussion,
Questions,
Applications
and Examples
Exchange Rates and the International Financial Submission of
System
Assignment,
Discussion,
Exchange Rates and the International Financial System; Questions,
Mechanisms of Foreign Exchange and Trade; Three Applications
Major Exchange Rate Systems; Macroeconomics of and Examples
Open Economies; Breakdown and Reconstruction of
The International System.
Revision
Estimated Student workload:
Activity
Class attendance
Independent Study
Mid – Term Exam
Preparation, Assignment
Preparation, Test Preparation,
Exercises Preparation
Final Exam and Final Exam
Preparation
Total
Hours
42
39
33
36
150
ASSESSMENT
Class Participation/Tests and assignments: 25%
Mid-term examination:
25%
Final examination:
50%
In evaluating the quality of your class participation, I will consider:
1st your attitude towards the course material;
2nd how well you prepare your homework assignments;
3rd how often you participate in the debate and class activities
Assignments: Assignments may be given at the end of each class. Additionally an
assignment will be given after the mid-term examination, concerning the chapters of
supply and demand to be delivered by the date of the final examination.
Mid-term examination: The mid-term examination will be of two hours. It will
mostly be essay questions and/or multiple-choice questions.
Final Examination: The final examination will be of two and a half hours. It will be
comprehensive and it will test the students on the material covered during the
semester.
The exams will consist of a section of identifications - in which you will write brief
definitions and describe the relevance of key concepts, theories, etc. -, a section with
simple calculus and an essay section. The first two sections may contain multiplechoice or True/False questions.
NOTES:
 Class attendance and participation in class discussion is expected and absences
will affect your final grade.
 The due dates for assignments are non-negotiable and late work will be
penalized.
 All assignments are to be professional in appearance and type.
B.A in Travel and Tourism Management Grading System:
%
Grade
Grade
90-100
80-89
75-79
65-74
60-64
55-59
50-54
Below 50
A
B+
B
C+
C
D+
D
F
Grade Meaning Grade
Points per
Credit
Excellent
4.00
Very Good
3.50
Good
3.00
Above Average 2.50
Average
2.00
Below Average 1.50
Poor
1.00
Failure
0.00
OTHER INFORMATION
Class attendance: Students must maintain a 70% attendance throughout the semester.
Humane matters: Students should inform their faculty member for any unforeseen
matters that may occur, which may prevent them from fulfilling what is expected in
the frame of the course.
Library: The students are advised to visit the library of the College on a regular basis
and read articles published in academic journals. It is recommended that the expertise
of the College’s librarian is exploited by the students by enquiring for help, so as to
become fully aware of the facilities and search techniques offered by the library and
how these can be utilised by the students in a fruitful way. It is recommended that
study of articles published in international journals as well as financial newspapers
and magazines is regularly undertaken.