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Outline in Word Format
EASTERN MEDITERRANEAN
UNIVERSITY FACULTY OF BUSINESS AND ECONOMICS
DEPARTMENT OF ECONOMICS
2008 –
2009 SPRING SEMESTER
COURSE CODE: ECON 202 COURSE LEVEL: 4th semester / 2nd year
COURSE TITLE: Intermediate Macroeconomics
COURSE TYPE: Area Core
LECTURERS: Mehmet Balcılar, Office: BE 276 Tel: 1548
CREDIT VALUE: (3, 0, 1) 3 ECTS VALUE 6
PREREQUISITES: ECON 102
COREQUISITES: None
DURATION OF COURSE: One semester
WEB LINK http://www.emu.edu.tr/mbalcilar (Teaching/ECON 202)
OFFICE HOURS: Monday 14.30-15:30, Tuesday 11:00-1200
ASSISTANT: Kemal Bağzıbaglı
CATALOGUE DESCRIPTION
Determinants of the level of aggregate demand. General
equilibrium of product, money, and labor markets. International
macroeconomic relationships. Fundamentals of the economic growth
process and income distribution.
AIMS & OBJECTIVES
The objective of the course is to help students understand the
importance of a model-based approach to macroeconomic analysis
as well as how the various models are connected. In addition,
the course aims at with a tutorial and a newspaper\magazine
reading hour, to produce students who have the capacity to
analyze current economic issues.
GENERAL LEARNING OUTCOMES (COMPETENCES)
On successful completion of this course, all students will have
developed knowledge and understanding of:
- Income determination, unemployment, IS-LM Model,
- Business cycle, the effects of monetary and fiscal policy,
government budget
- International trade, the market for exchange rates and
exchange rate systems, capital mobility
- Aggregate demand, aggregate supply, self-correcting economy,
Keynesian revolution
On successful completion of this course, all students will have
developed their skills in:
- Macroeconomic analysis of real world cases
- Open economy perspective
- Understanding the link between exchange rates, interest rates,
net exports, capital mobility and
Mundell-Flemming version of the IS-LM analysis
- Stabilization policies
On successful completion of this course, all students will have
developed their appreciation of and respect for values and
attitudes regarding the issues of:
- Unemployment, inflation and productivity
- Saving, investment, real economic wealth
- Macroeconomic stability and policies in the short-run
- Macroeconomic stability and policies in the long-run
RELATIONSHIP WITH OTHER COURSES
As an intermediate level course, ECON202 builds upon ECON102 and
prepares the student for specialized courses such as ECON 321
(International Economics) and ECON 428 (Labor Economics, ECON315
(Mathematical Economics). It is also a foundation course for
econometrics and quantitative method courses.
LEARNING / TEACHING METHOD
The course will be taught through 3 hours of classroom teaching
and 1 tutorial hour will cover application exercises.
METHOD OF ASSESSMENT
The final course grade will be comprised of the following
components:
Quizzes : 20% (3 best out of 4) *
Midterm : 30%
Final exam : 40%
Homework : 5%
Class participation : 5%
ATTENDANCE
Attendance is compulsory by school regulations. Students are
strongly advised not to miss lecture hours since success is
closely related with attendance. Absence over 20% will be
penalized with an NG.
TEXTBOOK
Robert J. Gordon, MACROECONOMICS (Tenth Edition)
(available in Bookstore)
CONTENT & SCHEDULE
Lectures will be held on
Tuesday 12:30 - 14:20, RD 306
wednesday 08:30 - 10:20, RD CL220
SEMETER OFFERED
2008-2009 Fall
The lecture topics within the semester are as in the following
schedule:
Week Dates Chapter Subject Topics
1
6-10 Oct.
1 What Is Macroeconomics? 1.2 Defining Macroeconomics
1.1 How Macroeconomics Affects Our Everyday Lives
1.3 Actual and Natural Real GDP
Macroeconomics in the Short Run and Long Run
2 & 3
13-24 Oct.
2 The Measurement of Income, Prices and Unemployment 2.1 Why We
Care About Income
2.2 The Circular Flow of Income and Expenditure
2.3 What Transactions Should Be Included in Income and
Expenditure?
2.4 Components of Expenditure
2.5 A Summary of Types of Spending
2.6 How Much Income Flows from Business Firms to Households?
2.7 Nominal GDP, Real GDP and the GDP Deflator
2.8 How Nominal GDP Is Split Between Inflation and Changes in
Real GDP
2.9 Measuring Unemployment
4 & 5
27 Oct.-7 Nov.
3 The Simple Keynesian Theory of Income Determination
3.1 Business Cycles, Unemployment and Income Determination
3.2 Planned Expenditure
3.4 The Economy In and Out of Equilibrium
3.5 The Multiplier Effect
3.6 Fiscal Policy
6, 7
10-21 Nov.
4 The IS-LM Model 4.1 Introduction
4.2 Interest Rates and Rates of Return
4.3 The Relation of Autonomous Planned Spending to the Interest
Rate
4.4 The IS Curve
4.5 Why People Use Money
4.6 Income, the Interest Rate and the Demand for Money
4.7 The LM Curve
4.8 The IS Curve Meets the LM Curve
4.9 Monetary Policy in Action
4.10 How Fiscal Expansion Can “Crowd Out” Investment
8 24-27 Nov.
5 Monetary Policy, Fiscal Policy and the Government Budget 5.1
Introduction
5.2 Strong and Weak Effects of Monetary Policy
5.3 Strong and Weak Effects of Fiscal Policy
5.4 Using Fiscal and Monetary Policy Together
9 28 Nov.-6 Dec.
Midterm Examination
10, 11,
12
15 Dec.-Jan 2
6 International Trade, Exchange Rates and Macroeconomic Policy
6.1 Introduction
6.2 Foreign Trade, the Balance of Payments and International
Indebtedness
6.3 Exchange Rates
6.4 The Market for Foreign Exchange
6.5 Nominal and Real Exchange Rates in the Long Run
6.6 Exchange Rate Systems
6.8 Determinants of Net Exports
6.9 The Real Exchange Rate and Interest Rate
6.10 The IS-LM Model in a Small Open Economy
6.11 Capital Mobility and Exchange Rates in a Large Open Economy
6.12 Conclusion: Economic Policy in the Open Economy
13, 14,
15
5-23 Jan.
7 Aggregate Demand, Aggregate Supply and the Self-Correcting
Economy 7.2 Flexible Prices and the AD Curve
7.3 Shifting the Aggregate Demand Curve with Monetary and Fiscal
Policy
7.4 Alternative Shapes of the Short-Run Aggregate Supply Curve
7.5 The Aggregate Supply Curve When the Nominal Wage Rate Is
Constant
7.6 How the Wage Rate Is Set
7.7 Fiscal and Monetary Expansion in the Short and Long Run
7.8 Classical Macroeconomics: The Quantity Theory of Money and
the Self-Correcting Economy
7.9 The Keynasian Revolution: The Failure of Self-Correction
26 Jan.-Feb. 10
FINAL EXAM
TUTORIAL PROBLEMS:
Week 2
Chapter 1: What is Macroeconomics
Q.2,3,5,7,8 Problem 1
Week 3,4
Chapter 2: The Measurement of Income, Prices amd Unemployment
Q. 2, 4,7,12 Problems 1, 2 5, 6,7
Week 4,5
Chapter 3: The Simple Keynesian Theory of Income Determination
Q. 6,7 ,10 Problems 1, 2,4,7
Week 6,7
Chapter 4: The IS-LM Model
Q. 10,11 Problems, 1,3,5
Week 9
Chapter 5: Monetary Policy, Fiscal Policy and the Government
Budget
Q. .2.6,9 Problems ,2,3
Week 10,11,12
Chapter 6: International Trade, Exchange Rates, and
Macroeconomic Policy
Q. 3,6 Problems 2,6,7
Week 13,14,15
Chapter 7:Aggregate Demand, Aggregate Supply and the
Self-Correcting Economy
Q. 3,6 Problems 1,2
MAKE-UP EXAMS
Students who have valid excuses, will be allowed to take make-up
examinations for mid-term and final exams. No make-up exams for
quiz.
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