2801: Principles of Macroeconomics
Eastern Illinois University
Course Syllabus, Spring 2002 ECN 2801, Sec.7: Principles of Macroeconomics
Class meets: 11:00-11:50am, MWF, Coleman 2781
Instructor: Mukti P. Upadhyay
Office: Coleman 2811
Off. Hrs: M-F 1:30-2:30, also by appointment
Phone: 581-3812; email: cfmpu@eiu.edu
Textbook: O'Sullivan and Sheffrin: Economics, 2001 edition, Prentice Hall.
Grading: You will have three midterms, the best two of them will count 25% each, and the worst will be
dropped. There will be no makeup for the midterms. Medical or other emergencies will allow you to skip one of the midterms without worrying about your grade. Since emergencies cannot be foreseen, please take each exam you can and prepare hard for it. The final exam will count 35%, and quizzes and classwork will count 15% toward your final grade.
Exams:
Midterm 1, February 15, Friday
Midterm 2, March 22, Friday
Midterm 3, April 24, Wednesday
Final Exam, May 1 W, 10:15am--12:15pm
GRADING EXAMS: All exams will follow the multiple-choice format. Questions will be taken from the lectures, class discussions, and the required text. The final exam will be comprehensive except for a few chapters that I will drop. The final letter grade for the course will perhaps follow the usual pattern, with the cutoffs at 90, 80, 70, and 60 percent for A, B, C, and D respectively. If this pattern leads, however, to a bad distribution of grades (e.g., no As or too many Ds), then I will curve the grades, for the benefit of the students. You will not be penalized for this possible modification of the grading procedure but may benefit from it.
ATTENDANCE: Attendance in class is not mandatory. But please understand that research has consistently shown that typical students will understand economics a lot better and score much higher in exams if they attend classes regularly. Further, in-class assignments and quizzes may be conducted on any given day. Thus, absence from class may directly hurt your grade as well. Finally, if you are right on the borderline of grades, you may be moved up if I find that you have attended the class regularly.
COURSE DESCRIPTION: This course will introduce you to the basic principles of how an economy works in the aggregate. We discuss briefly the key economic tools, such as demand and supply, that are more thoroughly examined in a course on Microeconomics. Our focus here will be on the aggregative behavior of the economy. Examples include what determines the level of national income and employment, and the rate of economic growth. Why do we see high unemployment of labor and capital at some times and full employment at others? What causes money supply to get out of hand that results in high inflation? Is there a problem about national debt? How is budget deficit related to the interest rate? Is Japan (and now China) a problem if the U.S. imports far more from them than it exports to them? And, most crucially, how do government policies affect income, employment, and inflation? By the end of the course, you should be able to analyze these questions with some confidence. Reading a good newspaper or magazine to think about some of the current socio-economic issues will help greatly.
PREREQUISITES AND EXERCISES: The emphasis in Econ 2801 is on learning to use basic economic principles, not on memorizing lots of facts. Because the only way to learn how to do something is to practice it, we will spend part of most classes on exercises, mainly in groups. I often use graphs and sometimes basic algebra to explain macroeconomics. To get the most out of class, you should bring in a calculator, a good ruler, and a set of colored pencils or pens. There are no formal prerequisites for this course. If you are going to be an econ major, you certainly need to be a bit comfortable with math, but at this principles stage you need not worry much about it yet.
OFFICE VISITS: This may turn out to be a difficult course to some students. If you feel overwhelmed by the material, come to my office at the first sign of trouble. Don't wait until a day or two before the exam. If you are not clear about a point or two in the day's lecture, it is perhaps best to come up and ask right in class at the end of the lecture when things are still fresh in your mind. But by all means, do visit my office with your questions, particularly after you have done the reading. If you cannot make it to my office for your needs, send me an email. I will try to do my best to answer students' questions on a daily basis.
DISABILITIES: If you have a documented disability, please contact me as soon as possible so we can make necessary accommodations.
COURSE OUTLINE:
Ch. 1, 2 Introduction and Key Principles
Ch. 4 Demand and Supply (plus parts of Ch.6)
Ch. 20 Measuring Gross Domestic Product
Ch. 21 Measuring Unemployment and Inflation
******Exam 1 about here******
Ch. 22 Classical Economics: The Economy at Full Employment
Ch. 24 Aggregate Demand and Aggregate Supply
Ch. 25 Keynesian Economics and Fiscal Policy
Ch. 26 Investment and Interest Rates
******Exam 2 about here******
Ch. 27 Money, Banking System, and the Federal Reserve
Ch. 28 Monetary Policy in the Short Run
Ch. 29 From the Short Run to the Long Run
Ch. 30 Dynamics of Inflation and Unemployment
******Exam 3 about here******
Final Exam Review
******Final Exam on 12/12 Tue, 2:45-4:45p******
To keep the course at manageable length, we will skip parts of the less important stuff in various chapters. Time permitting, however, we will study Ch. 31 as well.