Course Overview

Introduction to Principles of Macroeconomics

This course introduces students to the general principles of macroeconomics, focusing on the determination of aggregate production and income, employment, output, price levels, and the role of money in the economy. It also covers monetary and fiscal policy, inflation, unemployment, economic growth, and international economics.

• Credit Hours: 3.00

• Course Code: ECONO2021-NET03

• Prerequisite: Reading Placement Category One

Core Objectives

Learning Outcomes

Upon completion of this course, students will be able to:

1. Define the definition and scope of economics.

2. Describe different economic systems.

3. Demonstrate changes in the equilibrium price and quantity using the supply/demand model.

4. Explain how the overall level of economic activity is measured.

5. Describe the causes and effects of economic growth and development.

6. Describe basic concepts and the causes of inflation, cyclical unemployment, and unemployment.

7. Explain the functions of money and how money is created in the U.S. economy.

8. Describe the functions of the Federal Reserve System and the methods used to control the money supply.

9. Analyze fiscal policy, the federal budget, and the national debt.

10. Explain international trade and exchange rate systems.

Main Topics

1. Basic Economic Concepts

This topic covers the foundational principles of economics, including scarcity, choice, and opportunity cost.

• Scarcity: The fundamental economic problem of having limited resources to meet unlimited wants.

• Opportunity Cost: The value of the next best alternative foregone when making a choice.

• Production Possibilities Curve (PPC): Illustrates the trade-offs between two goods or services that can be produced given fixed resources.

2. Economic Systems

Different societies organize their economies in various ways to answer the basic economic questions of what, how, and for whom to produce.

• Market Economy: Decisions are made by individuals and firms interacting in markets.

• Command Economy: The government makes all economic decisions.

• Mixed Economy: Combines elements of both market and command economies.

3. Supply and Demand

The supply and demand model is used to determine equilibrium price and quantity in a market.

• Law of Demand: As price decreases, quantity demanded increases, ceteris paribus.

• Law of Supply: As price increases, quantity supplied increases, ceteris paribus.

• Equilibrium: The point where quantity demanded equals quantity supplied.

Formula:

Example: If the price of coffee rises, the quantity demanded falls, but the quantity supplied rises until a new equilibrium is reached.

4. Measuring Economic Output

Economic output is measured using Gross Domestic Product (GDP), which represents the total value of all final goods and services produced within a country in a given period.

• GDP Formula:

• C: Consumption

• I: Investment

• G: Government Spending

• X: Exports

• M: Imports

5. Economic Fluctuations and the Business Cycle

The business cycle refers to the fluctuations in economic activity over time, including periods of expansion and contraction.

• Expansion: A period of increasing economic activity and growth.

• Recession: A period of declining economic activity.

• Peak: The highest point of economic activity before a downturn.

• Trough: The lowest point before recovery begins.

6. Unemployment and Inflation

Unemployment and inflation are key indicators of economic health.

• Unemployment Rate Formula:

• Types of Unemployment: Frictional, structural, cyclical, and seasonal.

• Inflation: The general increase in prices over time, measured by the Consumer Price Index (CPI).

• Inflation Rate Formula:

7. Money, Banking, and the Federal Reserve System

This topic explores the role of money, how banks operate, and the functions of the Federal Reserve System (the central bank of the U.S.).

• Functions of Money: Medium of exchange, unit of account, store of value.

• Money Supply: The total amount of money in circulation, often measured as M1 or M2.

• Federal Reserve Functions: Conducts monetary policy, regulates banks, provides financial services.

8. Monetary and Fiscal Policy

Monetary and fiscal policies are tools used to influence the economy.

• Monetary Policy: Managed by the Federal Reserve, involves changing the money supply and interest rates to influence economic activity.

• Fiscal Policy: Involves government spending and taxation decisions to influence the economy.

• Budget Deficit: Occurs when government spending exceeds revenue.

• National Debt: The total amount owed by the federal government.

9. International Trade and Exchange Rates

This topic covers the benefits and challenges of international trade and how exchange rates are determined.

• Comparative Advantage: The ability of a country to produce a good at a lower opportunity cost than another country.

• Exchange Rate: The price of one currency in terms of another.

• Trade Balance: The difference between a country's exports and imports.

Grading and Assessment

Grading Scale

The following table shows the grading scale used in the course:

Grading Components

Additional info: The total points in the table sum to 785, but the grading scale is based on 950 points. This suggests there may be additional assignments or extra credit not listed in the table.

Course Policies and Academic Integrity

Attendance and Participation

• Asynchronous format: No set meeting times, but regular participation and timely submission of assignments are required.

• Students are expected to check announcements and complete all assigned readings and assessments.

Academic Integrity

• Plagiarism, cheating, and use of unauthorized materials are strictly prohibited.

• Use of Artificial Intelligence (AI) to complete assignments is not allowed.

• Consequences for academic dishonesty include failing grades and possible suspension or expulsion.

Classroom Etiquette

• Use clear, concise, and professional language in all communications.

• Respect classmates and instructors in all interactions.

• Follow netiquette guidelines for online learning.

Required Materials

• Textbook: MyLab Economics with Pearson eText Access Code for Macroeconomics (Custom), 9th Edition, by Hubbard.

• Publisher: Pearson Learning Solutions

• ISBN-13: 9780135206451

Summary Table: Key Macroeconomic Concepts