PRINCIPLES
OF MACROECONOMICS
ECONOMICS 111
Instructor: R.W. Hafer
Office: Alumni
Hall 3136
Phone: 618-650-2747
Email: rhafer@siue.edu
Course Objective
How would you answer the
following questions? Will I have reduced
opportunities—a lower income level—relative to my parents? Can I skip lectures and still pass this
course? Is free trade good? What is inflation, what causes it, and why
should I care? Should President Bush
lower taxes? Should Greenspan raise
interest rates? Do I have to take
economics?
My objective is to provide
you with a framework—economics—that enables you to answer the questions posed
above. Will everyone have the same
answer? No. But if we all start with the same framework,
then why we get different responses can be better understood. If I do my job, you will be able to refute
silly notions that you often times read in the newspaper or hear on television.
There are two themes to this
course. As an introductory course, one
is to introduce you to some basic economic concepts. You’ll learn new terminology, such as
opportunity cost, comparative advantage, and how it is used. You’ll see how the demand and supply model is
a powerful tool that can be used in analyzing every day events as well as
government policies.
The other theme focuses on
how the economy operates. We will
explore various ideas that economists have come up with to explain why there
are recessions and whether we can avoid them, or why some countries are better
off than others. Our focus will be on
the policy side, since the government is such a dominant player in determining
the behavior of the economy.
Text/ Study Guide
John B. Taylor, Economics, 3rd Ed,
2001 with CD-ROM. This book is available
from Textbook Rental. The Study Guide, by John B. Taylor, is specifically
written for use with the text. You are
encouraged to purchase
and use the study guide.
It can be purchased at the University Bookstore located in the
University Center.
Office
hours are 2:00-4:30, Monday, Tuesday, Thursday and Friday, and by
appointment. Most days I am in the
office, so call ahead if you wish to set up an appointment. Please adhere to these times as I cannot
guarantee I will be available if you just stop by.
Grading
Your grade in this class is determined by your
performance on 5 in-class exams, periodic assignments and quizzes, and a series
of short papers. The relative weight
assigned to each component is:
Examinations: 5 @ 15% each
Homework,
etc. 10%
Papers 15%
Exam Policy
The exams will be taken in class at the assigned
times. The tests are a combination of
multiple choice, short answer and problem solving questions. If you cannot make it to an exam and fail to
notify me within two hours of the exam (no later than 2:15 p.m.), I will assume
that you are not taking that test. If
you are unable to take the exam, whether you call or not, you must
provide sufficient documentation explaining your absence (tow truck receipt,
hospital admission form, note from boss, etc.)
Only until such documentation is provided will I consider a make-up
exam. In addition, the make-up exam will
not be identical to the one taken by the class. In order to pass this course
you must take all five of the exams.
Homework, quizzes, etc.
It is your responsibility to complete and hand in
homework or any other assignment.
Assignments will be made on a regular basis throughout the
semester. I will announce the assignment
in class and post it on the class homepage and/or email it to the class. You are responsible for accessing the
assignments. If you are absent the day
an assignment is made, it is your responsibility to get it from me, or someone
in class. Unannounced quizzes, if
missed, cannot be retaken. Homework is
due at the beginning of class on the assigned date: there will be no late homework accepted. Homework constitutes a whole letter grade
so, please, do not ignore it.
Papers
You are required to write several papers in this
class. The topics and specific
guidelines for the paper assignments will be provided as the semester
progress. The papers will require you to
apply economics to an issue that is relevant for today. In order to pass this class, you must take
complete all of the paper assignments.
Papers written for this
class are graded subject to the
1. Each different word misspelled,
2. Each sentence fragment,
3. Each run-on sentence or comma
splice,
4. Each mistake in capitalization,
5. Each serious error in
punctuation that obscures meaning,
6. Each error in verb tense or
subject/verb agreement,
7. Lack of conformity with
assignment format, and
8. Each improper citation, or lack
of citation, where one is needed.
One way of avoiding some of these errors is
to use the spelling and grammar software available
in the computer and writing labs. These
software packages will identify many, but not all, errors
for you so that you may correct them. If
you are not sure how to correct them, seek advice from
the
staff in the
A paper with more than three fatal
errors marked on any one page, or more than ten in the entire document is
unacceptable. I will stop reading when either figure is exceeded and will
return the paper to you without a grade. If a paper is returned to you because of
fatal errors, you must correct it and return it to me by the next class
meeting. Grades on all papers that are returned because of Fatal Errors will be
reduced by one letter. It is, therefore, in your interest to use available help
before you submit the paper the first time. A paper that still has fatal errors
after it is resubmitted will receive a grade no higher than a D. Still, you must do all paper assignments in
this course in order to pass.
Student/Faculty Rights and Responsibilities
I
believe in contracts between parties.
Thus, I propose the following “contract” between you and me.
I
will work to provide a rigorous and useful learning experience. To this end, I will present assigned material
in as clear and organized fashion as I
can.
I
will treat students fairly. I encourage
outstanding student performance and will reward those students who have
achieved such levels with the highest grades.
Students who submit work of lower quality will receive lower
grades. Grades are based on student
performance: students are ultimately
responsible for earning their grades.
I
will treat you with respect and expect similar treatment from you. I also expect you to treat your fellow
students with respect. The classroom is
an environment to promote student learning, and this entails discussion and
disagreement. To that end I expect and
will endeavor to create and environment of intellectual freedom and diversity
of thought.
You
are accountable for your actions. You
are responsible for, among other things, meeting deadlines, adhering to an
acceptable code of conduct and treating both me and your fellow students with
respect.
Academic
dishonesty is not permitted. As stated
in the SIUE undergraduate catalogue:
“The University gives high priority to matters of academic ethics and
abhors all types of cheating, including plagiarism. Plagiarism is the act of
representing the work of another as one's own and may consist of copying or
otherwise using written or oral work of another without proper acknowledgement
of the source. Instructors may impose sanctions for academic cheating in
accordance with the Student Academic Code. The minimum penalty for academic
misconduct beyond failure for an assignment and/or for a course is disciplinary
probation.”
Dropping the Class
If
you decide to withdraw from the class, please be aware of the following
dates. The last day to withdraw from the
class without receiving a grade is September 5.
The last day to withdraw without permission of your adviser and
instructor is October 31. Last day to
withdraw from class with permission of adviser and instructor is November 21.
The following schedule is tentative and may be adjusted
to reflect the instructional needs of the class. An HOUR exam follows each major section. The final exam is comprehensive.
Section
I. An Introduction to Economics
A. The Nature and Method of Economics (Chapter 1, plus Advanced Topic A)
1. Scarcity and Choice
2. Opportunity Cost
3. Production Possibilities
4. Comparative Advantage and Exchange (Chapter
29, pp. 650-62)
5. How Markets Work
B. Explaining the Economy (Chapter 2)
1. Measuring the Economy’s Output
2. Connections Between Variables of Interest
3. The Circular Flow Model
C. Supply and Demand (Chapter 3)
1. Demand and Supply
2. Market Equilibrium: Finding Price and Output
SECTION II. Principles of Macroeconomics
A. The Main Variables (Chapter 17)
1. Real GDP
2. Unemployment and Inflation
3. Theory and Policy
B. Measuring the Output and Income of an Economy
(Chapter 18)
1. The Concept of Gross Domestic Product (GDP)
2. Concepts of Equilibrium (Savings =
Investment)
3. Real and Nominal Measures
4. Price
Indexes and Inflation
SECTION III. Explaining Long-run Economic Relations
A.
Growth (Chapter 21)
1. Production with Labor and Capital
2. Technology
3. Growth Accounting
4. The Role of Policy in Promoting Growth
B.
Money and Inflation (Chapter 22)
1. Money is what money does
2. The Fed and Banks
3. Controlling the Money Supply
4. Money and Inflation
SECTION IV. Explaining Economic Fluctuations
A. Causes of
Economic Fluctuations (Chapter 23)
1. Changes in Aggregate Demand Curve and
Production
2. Consumption and Income
3. Forecasting the Economy
B.
The Fluctuations Model (Chapter 24)
1. Aggregate Demand and the Role of Interest
Rates
2. The Policy Rule
3. Inflation Adjustment Line
4. Equilibrium Inflation and Real GDP
C.
Using the Model (Chapter 25)
1. Affects of Government Purchases
2. Affects of Monetary Policy
3. Price Shocks
SECTION V. Macroeconomic Policy
A. Fiscal
Policy (Chapter 26)
1. Federal Budget
2. Countercyclical Fiscal Policy
3. Structural vs
Cyclical Deficits
B. Monetary Policy (Chapter 27)
1. Central Bank Behavior
2. U.S. Policy Actions
3. Money Supply or Interest Rates?
COMPREHENSIVE FINAL EXAM
10:00-