EC225 Principles of Macroeconomics
SOUTHEAST MISSOURI STATE UNIVERSITY
Department of Economics and Finance
COURSE SYLLABUS, EC225, Principles of Macroeconomics
Revised in October 1989
I. Catalog Description and Credit Hours of Course
Economic concepts, institutions, theories and policies including study of national income, inflation unemployment, banking system, money, growth, and international economics.
II. Prerequisite(s)
MA134 College Algebra
EC215 Principles of Microeconomics
III. Purposes or Objectives of the Course
A. Create an awareness of society's basic macroeconomic problems, the theories designed to analyze these problems and the alternative policies to deal with these problems.
B. Enlarge the students' ability to reason analytically and objectively concerning economic subjects.
C. Instill in the students an interest and appreciation for the discipline of economics.
IV. Expectations of Students
Normal expectations, including two hours of time spent outside of class for each one hour of class.
V. Course Outline
Part I: Review of markets and introduction to macroeconomics
A. The nature of economics
1. Scarcity
2. Opportunity costs
3. Economic efficiency
B. Resolving
1. Basic economic questions
2. Production possibilities
3. Economic systems
C. Markets and prices
1. Demand
2. Supply
3. Market equilibrium
4. Markets and public policy
D. Economic institutions
1. Circular flow
2. Households
3. The business sector
4. The role of government
Part 2: Measuring Economic Performance
A. Unemployment and inflation
1. Aggregate demand and supply
2. Unemployment and its problems
3. Inflation and its problems
4. History of U.S. inflation
B. National income accounts
1. GNP and its measurement
2. Other accounts
3. Limitations of GNP accounting
4. GNP and social welfare
Part 3: Keynesian Macroeconomics
A. Before Keynes
1. Early business cycle theories
2. Classical theory
B. Aggregate expenditures
1. Consumption and saving
2. Investment
3. Government purchases
4. The foreign sector
C. Equilibrium level of output, employment and income
1. Aggregate expenditures approach
2. Saving = Investment approach
3. Multiplier effect
4. Potential versus equilibrium income
5. Equilibrium and the price level
D. Fiscal policy
1. Discretionary fiscal policy
2. Nondiscretionary fiscal policy
3. Full employment budget
4. Supply side economics
5. Ability to control government spending
Part 4: Money, Monetary Theory and Policy
A. Money and its creation
1. Functions and types of money
2. The supply of money
3. Banks and the creation of money
B. The Federal Reserve System and financial institutions
1. The Federal reserve organization
2. Tools of the Fed
3. Regulation of financial institutions
C. Monetary theory
1. Demand for money
2. Motives for holding money
3. Classical monetary theory
4. Keynesian monetary theory
5. Modern monetarism
D. Monetary and fiscal policy
1. Financing government
2. The public debt
3. Comparisons of monetary and fiscal policy
Part 5: Challenges to Policymaking
A. Aggregate demand and aggregate supply
1. Determinants
2. Supply side and demand side inflation
3. Stagflation
B. Policymaker's dilemma
1. Phillips curve
2. Supply side policies
3. Incomes policies
C. Limitations of stabilization policy
1. Lags
2. Financial insulation
3. Political dimensions
Part VI: International Economics, Economic Growth and Development
A. Theories of economic growth
B. Growth record of the United States
C. Growth issues in developed and developing countries
D. International economics
1. Exchange rates
2. Balances of payments and trade
3. Curing exchange rate disequilibrium
VI. Textbook(s) and/or Other Required Materials or Equipment
Macroeconomics: A Contemporary Introduction, William A. McEachern, Thomson, 1997
VII. Basis of Student Evaluation
The student's grade will be based on his performance on exams, including the regularly scheduled final. There will be a minimum of three exams. Some combination of homework assignments, quizzes, and written assignments may enter into the evaluation process as well.
