ECON 141: Macroeconomics Course Syllabus Summer Semester 2008/09

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1 UNIVERSITY OF BAHRAIN COLLEGE OF BUSINESS ADMINISTRATION DEPARTMENT OF ECONOMICS AND FINANCE ECON 141: Macroeconomics Course Syllabus Summer Semester 2008/09 Instructor: Dr. Mohammed A. Alwosabi Office : Office Phone: E mail: mwosabi@gmail.com Web page: Go to Academic Staff at the UOB website and follow the directions Office Hours: UTH Course Credit Hours: 3 credit hours Course Pre requisite: ECON 140 Course Level : Program(s) to which it contributes: Modes of Attendance offered: Educational Resources: a. Main Text and Material: 1 st year, 2 nd semester BSc in: Banking and Finance, Accounting, Management, Marketing, and IS Day time class I. ECONOMICS, Michael Parkin, 8 th edition, Pearson II. In class handouts and online notes b. Additional Learning Aids: I. Study Guide for Macroeconomics by Mark Rush, 8 th edition II. My EconLab with E book Student Access Kit Course Description: (Course Purpose, aims/goals) This course focuses on the main issues and problems facing the economy as a whole, and discusses the general way in which economists analyze them. It aims to introduce and familiarize students with topics such as determination and measurement of macroeconomics aggregates such as GDP, economic growth, price level, unemployment and inflation, business cycle, aggregate demand and supply, expenditure multiplier, the role of money and banking. In addition, it will study how macroeconomic policies such as fiscal and monetary policies affect the economic aggregates. Some focus will be on the international trade and finance. Throughout our studies we will seek to apply what we are learning to contemporary issues. Page 1 of 7

2 Specifically, this course aims to: 1. Develop an understanding of basic macroeconomic principles, theories and concepts, and of the methods of analysis used by economists; 2. Prepare students to use the tools of economic reasoning to explain, analyze and resolve macroeconomic issues, and evaluate policy decisions; 3. Enhance the habit of reading critically, from a variety of sources, to gain information about the changing economic activities and policies in the real world; 4. Produce learners who are aware of and able to critically and reflectively engage in ethical issues regarding the roles of various economic agents; 5. Preparing students to understand more sophisticated economic issues and to answer raised questions in a systematic way. Intended Learning outcomes: Upon successful completion of this course, students should be able to: 1. Measure and analyze macroeconomics concepts such as GDP, price level, business cycles, growth, unemployment, inflation, 2. Understand the basic national income identity and how it is used to understand the various methods of national income accounting. 3. Comprehend the meaning of unemployment and its types and rates in the Bahrain economy. 4. Recognize the different phases of business cycle and understand how business cycle fluctuations affect people and government planning and policies 5. Define aggregate demand and aggregate supply and determine factors affecting them in the short and long runs; and determine macroeconomic equilibrium graphically and mathematically. Use these tools to conduct and predict the impact of fiscal and monetary policies. 6. Recognize inflation, its causes and consequences, and trends in Bahrain economy. 7. Explain the ways in which government and the central bank can influence the economy and the markets through fiscal and monetary policies. 8. Develop the skills to use theories, models, and graphs to analyze macroeconomic issues. 9. Acquire the ability to get data, internet sources to evaluate economic policies. 10. Relate the information discussed in the course to current economic issues. Delivery and Teaching Methods: It is intended to use a combination of the following methods: 1. Lectures and discussions 2. Problem Solving 3. Case studies 4. Research project 5. Exercises and Assignments 6. Quizzes and Exams Skills to be developed: This course helps students in developing the following skills: 1. Communication (Oral & Written): Through discussion and class participation 2. Analytical: Through discussion, raising questions, exams, and assignments; and through relating what have studied to real world issues 3. Creative Thinking: Through encouraging students to use creative thinking techniques such as evolution, synthesis, revolution reapplication, changing direction, 4. Team work through encouraging study groups and group assignments 5. Adaptability to changes: Through observation of new changes in the world economy. Page 2 of 7

3 Other Related Activities: A class visit to the library to learn how to allocate references inside the library and how to search for references online ASSESSMENT AND GRADING: Your performance in this class will be evaluated as follows: Attendance and Participation 05 Assignments 05 Test 1 20 (Thursday, July 19) Test 2 20 (Thursday, Aug 13) Final Exam 50 (Tuesday, Aug Total 100 Tests and Exams Exams will be designed to test the students understanding of the course material and issues, not memorization. Students who receive excused absences for one of the tests will not be given a make up exam. Instead, they will be given a special comprehensive final examination that includes any material on which they were not previously tested. Students who arrive late for any exam, for any reason, will not be given additional time. Plan ahead to arrive early Bring your stationary with you. Sharing of stationery and calculators is not permitted during exams. Instructor will answer no questions during any of the exams. Mobile phones must be switched off. Attendance and class participation: There is a positive relationship between class attendance and performance in the course. Thus, attendance is an expectation for all students. Hence, come on time, switch off your mobile, and be a good participant in the class activities rather than drifting off somewhere. Students who are absent for 15 % of the total course hours will receive a warning letter. Students who are absent for 25 % of the total course will be withdrawn from the course with a WF and will not be permitted to take the final examination. A WF is treated as a failing grade for calculation of the GPA. It is expected that all students present on a given day be attentive, polite, and not a source of disturbance. Questions and comments are always encouraged. If you miss a class it is your responsibility to find out what material or assignments were presented in class. Office hours are devoted only to clarify unclear points not to repeat class lectures. Please go over the material to be covered in a particular lecture before coming to class. It is very important that you keep up with the material and take part in class discussion. I want this to be a semester long dialogue between us. Assignments: Assignments may include solving text problems, analyzing cases, and/or searching the Internet. Late work will not be accepted, so please plan in advance! Studying in groups is highly recommended, as long as each member of the group pulls his or her own weight, and you each remain responsible for learning the material. It is OK to discuss homework with your classmates, but copying somebody else's answers is cheating. Page 3 of 7

4 Academic Honesty: Plagiarism and Academic Dishonesty are not tolerated. Cheating on exams will not be tolerated. During any exam, communication of any kind between students is expressly forbidden. Students caught discussing answers, using prohibited materials, or assisting others during exams will be referred to the College Disciplinary Board. Note that academic dishonesty includes not only cheating, fabrication, and plagiarism, but also includes helping other students commit acts of academic dishonesty by allowing them to obtain copies of your work. Responsibilities: I believe the main purpose of education is to teach students to think effectively. As you interact with the course contents, you should learn general intellectual skills, such as observing, classifying, analyzing, and synthesizing. I see my primary responsibility to guide, and motivate you as a group of committed and dedicated students in this learning process, and to determine the extent to which you have mastered the material covered in this course. I am committed to this task. By signing up for this course, you have accepted the responsibility of being an active learner and of participating in the classroom discussion. If you are not committed expect your grade to reflect this. However, I want to see everyone does well. Thus, I will do my best to help you understand the topics and do well on the exams. I realize that many of you face some difficulties in their English language and in getting in enough time to study. I expect you to work hard in this class and every class. That s part of the reason why you are here. Don't miss an exam. Do your homework. Study! Use the materials: read the assigned chapter before you do the homework, and solve the problems of study guide. Don't cram all your studying in the night before the exam, for you will not only be too tired to think, you will not be able to process all the information. Disclaimer: This syllabus may be subject to pre announced changes. Page 4 of 7

5 COURSE OUTLINE Week Chapters / References / Topics Covered Introduction What is Macroeconomics? Chapter 21: Measuring GDP and Economic Growth o GDP Defined o Gross and Net Domestic Product o Measuring GDP The Expenditure Approach The Income Approach o Real GDP and the Price Level Calculating Real GDP Calculating the Price Level o The uses and limitation of RGDP Economic Welfare Comparisons over time Economic Welfare Comparisons across countries Business Cycle Forecasts Instructor Notes: Business Cycle o Business Cycle Definition o Phases of Business Cycle Expansion Recession Peak Trough Chapter 22: Monitoring Jobs, and the Price Level o Jobs and Wages Population Survey Three Labor Market Indicators Aggregate Hours Real Wage Rate o Unemployment and Full Employment The Anatomy of Unemployment Types of Unemployment Full Employment Real GDP and Unemployment Over the Cycle o The Consumer Price Index Reading the CPI Numbers Constructing The CPI Measuring Inflation Chapter 27: Aggregate Supply and Aggregate Demand o The Macroeconomic Long Run and Short Run o Aggregate Supply Long run Aggregate Supply Short run Aggregate Supply Movements Along the LAS and SAS Curves Changes in Aggregate Supply Page 5 of 7

6 o Aggregate Demand The Aggregate Demand Curve Changes in Aggregate Demand o Macroeconomic Equilibrium Short run Macroeconomic Equilibrium Long run Macroeconomic Equilibrium Economic Growth and Inflation The Business Cycle Fluctuations in Aggregate Demand Fluctuations in Aggregate Supply Chapter 23: The Economy at Full Employment o Investment, Saving, and the Interest Rate Investment Decisions Investment Demand Saving Decisions Saving Supply Equilibrium in the Capital Market Chapter 25: Money and Banks o What is Money Medium of Exchange Unit of Account Store of Value Official Measure of Money (M1 & M2) o Commercial Banks o How Banks Create Money Reserves: Actual and Required Creating Deposits by Making Loans o The Central Bank Policy Tools Required Reserve Ratio Discount Rate Open Market Operations o Controlling the Quantity of Money How required Reserve ratios Work How the Discount Rate Works How an Open Market Operations Work Chapter 29: Inflation o Inflation and The Price Level o Demand Pull Inflation Initial Effect of an Increase in Aggregate Demand Money Wage Rate Response A Demand Pull Inflation Processes o Cost Push Inflation Initial Effect of a Decrease in Aggregate Supply Aggregate Demand Response A Cost Push Inflation Processes o Effects of Inflation Unanticipated Inflation in the Labor Market Unanticipated Inflation in the Financial Market o Inflation and Unemployment: The Philips Curve The Short run Philips Curve Page 6 of 7

7 Chapter 28: Expenditure Multiplier o Fixed Prices and Expenditure Plan Expenditure Plans Consumption Function and Saving Function Marginal Propensities to Consume and Save Consumption as a Function of Real GDP Import Function o Real GDP and Fixed Price Level Aggregate Planned Expenditure and Real GDP Actual Expenditure, Planned Expenditure & real GDP Equilibrium Expenditure Convergence to Equilibrium o The Multiplier The basic Idea of the Multiplier The Multiplier Effect Why Is the Multiplier Greater Than 1? The Size of the Multiplier The Multiplier and the MPC & MPS o The Multiplier and The Price Level Aggregate Expenditure and Aggregate Demand Aggregate Expenditure and the Price Level Equilibrium Real GDP and The Price Level Chapter 30: Fiscal Policy o Surplus, Deficit and Balanced Budget o Stabilizing the Business Cycle The Government Purchases Multiplier The Tax Multiplier The Balanced Budget multiplier Discretionary Fiscal Stabilization Page 7 of 7

ECON 442: Economic Development Course Syllabus Second Semester 2009/2010

UNIVERSITY OF BAHRAIN COLLEGE OF BUSINESS ADMINISTRATION DEPARTMENT OF ECONOMICS AND FINANCE ECON 442: Economic Development Course Syllabus Second Semester 2009/2010 Dr. Mohammed A. Alwosabi Course Coordinator