Lahore University of Management Sciences. MECO 121 Principles of Macroeconomics Spring Semester 2018

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1 MECO 121 Principles of Macroeconomics Spring Semester 2018 Instructor Dr. Fahd Rehman Room No. 322 Office Hours Tuesday and Thursday (12.30 pm to 2.15 pm) Other times by appointment only Telephone TBA Secretary/TA Sec: Muhammad Rehman TA Office Hours TBA Course URL (if any) COURSE BASICS Credit Hours 3 Lecture(s) Nbr of Lec(s) Per Week Duration Recitation/Lab (per week) Nbr of Lec(s) Per Week Duration Tutorial (per week) Nbr of Lec(s) Per Week Duration COURSE DISTRIBUTION Core Elective Open for Student Category Close for Student Category COURSE DESCRIPTION To provide the students with an introduction to the basic macroeconomic principles; to enable students to appreciate the workings of real and asset/money markets and the nature of equilibrium in each market; to emphasize the role of macroeconomic policies that affect internal and external deficits, inflation and growth of per capita income. Throughout the course a focus will be on analyzing macroeconomic problems. COURSE PREREQUISITE(S) MECO 111 OR ECON 111 Principles of Microeconomics COURSE LEARNING OBJECTIVES Upon successful completion of the course, students should be able to: 1. Develop an understanding of basic macroeconomic concepts and their application to real world situations. 2. Identify core macroeconomic issues related to global and Pakistan s economy 3. Enable students to understand the macroeconomic linkages with Finance, Management and Marketing. Moreover, students should also learn to: 4. Work independently and in teams (for group project) 5. Evaluate critically and apply economic models to solve real world problems.

2 UNDERGRADUATE PROGRAM LEARNING GOALS & OBJECTIVES General Learning Goals & Objectives Goal 1 Effective Written and Oral Communication Objective: Students will demonstrate effective writing and oral communication skills Goal 2 Ethical Understanding and Reasoning Objective: Students will demonstrate that they are able to identify and address ethical issues in an organizational context. Goal 3 Analytical Thinking and Problem Solving Skills Objective: Students will demonstrate that they are able to identify key problems and generate viable solutions. Goal 4 Application of Information Technology Objective: Students will demonstrate that they are able to use current technologies in business and management context. Goal 5 Teamwork in Diverse and Multicultural Environments Objective: Students will demonstrate that they are able to work effectively in diverse environments. Goal 6 Understanding Organizational Ecosystems Objective: Students will demonstrate that they have an understanding of Economic, Political, Regulatory, Legal, Technological, and Social environment of organizations. Major Specific Learning Goals & Objectives Goal 7 (a) Discipline Specific Knowledge and Understanding Objective: Students will demonstrate knowledge of key business disciplines and how they interact including application to real world situations (Including subject knowledge). Goal 7 (b) Understanding the science behind the decision making process (for MGS Majors) Objective: Students will demonstrate ability to analyze a business problem, design and apply appropriate decision support tools, interpret results and make meaningful recommendations to support the decision maker Indicate below how the course learning objectives specifically relate to any program learning goals and objectives. PROGRAM LEARNING GOALS AND COURSE LEARNING OBJECTIVES (CLO) COURSE ASSESSMENT ITEM OBJECTIVES Goal 1 Effective Written and Oral Minor goal: Operationalized through class CP,Project write up & presentation Communication participation and group project (CLO#4) Goal 2 Ethical Understanding and Reasoning Goal 3 Analytical Thinking and Problem Solving Skills Minor goal: Application of microeconomic principles in real world scenario (CLO # 1,2 & 5) Quizzes and exams Goal 4 Application of Information Technology Goal 5 Teamwork in Diverse and Multicultural Environments Goal 6 Understanding Organizational Ecosystems Goal 7 (a) Program Specific Knowledge and Understanding Minor goal: Operationalized through preparation of group project reports and presentations (CLO#4) Minor Goal: Students have to work in random groups for project (CLO#4) Major Goal: Comprehensive coverage of topics in microeconomics (CLO# 1 5) Project write up and presentation Group project CP, quizzes and exams Goal 7 (b) Understanding the science behind the decision making process NA

3 GRADING BREAKUP AND POLICY Quiz(s) 20% (4 quizzes: 2 will be unannounced) CP and Attendance 10% Midterm Examination: 30% Final Examination: 40% Late comers will be marked absent. Regular attendance and class participation is vital for better understanding of course. There will be no penalty for first three absences. However, up to five absences, there will be 2% reduction in CP. After 8 absences, your possibility of continuing the course will be reconsidered. EXAMINATION DETAIL Midterm Exam Final Exam COURSE OVERVIEW WEEK/ LECTURE/ TOPICS MODULE A first look at Macroeconomics RECOMMENDED READINGS General Overview and Chapter 24 SESSION OUTCOME(S) (STUDENTS WILL BE ABLE TO ) Demonstrate and review the Basic macroeconomic concepts and their measurements National Income Accounts Chapter 24 Understand the concepts of National Income and difference between Real versus Nominal GDP Measuring the cost of living Chapter 25 Understand the measurement of cost of living i.e CPI and how it is measured? Measuring the cost of living Chapter 25 Why the CPI is an imperfect measure of cost of living Production and Economic Growth Chapter 26 Understand the Determinants of productivity and growth Production and Economic Growth Chapter 26 Understand the Determinants of productivity and growth Saving, Investment and Financial System Saving, Investment and Financial System Chapter 27 Chapter 27 Understanding of Financial Institutions, market for loanable funds and analysis of different policy actions on market for loanable funds Understanding of Financial Institutions, market for loanable funds and analysis of basic tools of finance Labor Markets and Unemployment Chapter 28 Comprehend the different labor market indicators and different types of unemployment rate

4 Labor Markets and Unemployment Chapter 28 To comprehend the different labor market 10. indicators and different types of unemployment rate 11. The Monetary System Chapter 29 To understand different kinds of money and functions of money. Central bank and Monetary Control Chapter 29 Demonstration of the role of Central bank and 12. Money Supply and analysis of different tools of monetary control 13. Inflation: Causes and Costs Chapter 30 Demonstration of Quantity Theory of Money along with the concepts of money neutrality 14. Review Session Pre Mid 15. Mid Term 16. Inflation: Causes and Costs Chapter 30 Understand the concept of inflation and deflation. Different types of inflation and cures of inflation. Balance of Payment Chapter 31 To show the concept of International flows of 17. goods and financial resources and familiarity with Balance of Payment Accounting Exchange Rates Chapter 31 Explain the basic concepts i.e. nominal versus real 18. exchange rate, appreciation and depreciation and purchasing power parity Introduction to Business Cycles Chapter 31 To understand the business cycles and their 19. phases. Consequences of business cycles for firms and managers Aggregate Demand and Aggregate Supply Aggregate Demand and Aggregate Supply Fiscal Policy, Monetary Policy and Aggregate Demand Fiscal Policy, Monetary Policy and Aggregate Demand Chapter 33 Chapter 33 Chapter 34 Chapter 34 Evaluation of aggregate supply and aggregate demand concepts and factors responsible for shifts in AD and AS Evaluation of aggregate supply and aggregate demand concepts and factors responsible for shifts in AD and AS Implications of expansionary fiscal and monetary policies for aggregate demand and role of automatic stabilizers Implications of expansionary fiscal and monetary policies for aggregate demand and role of automatic stabilizers 24. Inflation and Unemployment Chapter 35 Implications of short run relationship between inflation and unemployment 25. Inflation and Unemployment Chapter 35 Implications of Short Run relationships between inflation and unemployment Pakistan Economy To be provided Evaluation of current state of Pakistan economy. 26. Problems faced by Pakistan economy and different approaches to reduce such problems. 27. Review Session

5 TEXTBOOK(S)/SUPPLEMENTARY READINGS Principles of Economics (5th Edition) by Gans, king, Stonecash and Mankiw Suggested Readings and Websites Economic Survey of Pakistan SBP Annual Reports Pakistan Bureau of Statistics