Principles of Macroeconomics
Students examine how the economy behaves at the aggregate level and how national income is measured and determined. Topics include an overview of macroeconomics; measuring gross domestic product, inflation and unemployment; demand including the multiplier process; supply, business cycles, long-term growth; money, banking and monetary policy; inflation; interest rates; stagflation; deficits and fiscal policy; exchange rates and balance of payments; exchange rate policy; purchasing power and interest rate parity.
Completion of one of Principles of Math 12, Foundations of Math 12, or Pre-calculus Math 12 highly recommended.
B or better in Foundations of Math 11 or Pre-calculus Math 11 (BC graduates of 2013 onward); or C+ minimum in Principles of Math 11 or Applications of Math 12 or equivalent (BC graduates prior to 2013); or MATH 0523 or equivalent is recommended.
- Understand the forces determining macroeconomic variables such as inflation, unemployment, interest rates, and the exchange rate;
- Formulate and assess macroeconomic policy suggestions;
- Define macroeconomic terminology, such as the multiplier, monetarism, the natural level of unemployment, and fiscal policy;
- Interpret and evaluate media reports on the macroeconomy.
Module 1: Background and Overview
- Street Smarts
- Microeconomic Basics
- Macroeconomic Overview
Module 2: Macroeconomic Basics
Unit 1: Measurement
- Measuring Gross Domestic Product
- Measuring Inflation
- Measuring Unemployment
Unit 2: The Aggregate Demand Side
- The Multiplier Process
Unit 3: The Aggregate Supply Side
- Explaining Business Cycles
- Long-Run Growth
Module 3: The Monetary Sector
Unit 1: Money and Banking
- Crowding Out
- Defining Money
- Fractional Reserve Banking
Unit 2: Inflation
- The Quantity Theory
- The Monetarist Rule
Unit 3: The Interest Rate
- Interest Rates and the Price of Bonds
- Monetary Policy and Interest Rates
- Real versus Nominal Interest Rates
Module 4: Stagflation and Deficits
Unit 1: Stagflation
- The Phillips Curve
- The Real Cause of Inflation
Unit 2: Deficits
- Fiscal versus Monetary Policy
- The Structural Deficit
- Burdening Future Generations
Module 5: The International Sector
Unit 1: The Exchange Rate and the Balance of Payments
- The Exchange Rate
- The Balance of Payments
- The Twin Deficits
- The Law of Comparative Advantage
Unit 2: Policy in an Open Economy
- Influence of Openness on Policy Efficacy
- Monetary Policy under a Fixed Exchange Rate
- Fixed versus Flexible Exchange Rate
Unit 3: Purchasing Power Parity and Interest Rate Parity
- Purchasing Power Parity (PPP)
- The PPP Exchange Rate
- Interest Rate Parity
Maximum Completion30 weeks.
Required Text and Materials
Kennedy, P. Macroeconomic essentials: Understanding economics in the news. 3rd ed. Cambridge, MA: MIT Press, 2010.
Type: Textbook. ISBN: 978-0-262-51480-4
Computer with Internet is required for this course.
Open Learning Faculty Member Information
An Open Learning Faculty Member is available to assist students. Primary communication is through the Learning Environment's "Mail" tool or by phone. Students will receive the necessary contact information at the start of the course.
In order to successfully complete this course, students must obtain at least 50% on the final mandatory examination and 50% on the course overall.
|Final exam *||60%|