Module Title: Macroeconomics
I
Programme: BA
Economics +, BA (Hon) Economics
Module Code: MAC 101
Credit Value: 12
Module Tutor: Miss Sonam Cheki
General Objectives:
The aim of the module is to
familiarize the student with the tools of macroeconomic analysis and show how
these tools can be applied in macro-policy issues and provide Foundation for
the next module on Macro Economics in the later semester.
Learning Outcomes
At the end of this module, the
students are expected to be able to:
·
Apply
analytical reasoning
·
Evaluate
critically alternative macroeconomic policies
·
Formulate
arguments in the realm of introductory macroeconomics and related policy issues
·
Present
material in a graphical and mathematical form using economic terminology in a
clear and concise manner
·
Use
these forms and way of thinking to solve economic problems
·
Demonstrate
and understand the key concepts and principles of economics
·
Explain
the demand for money
Learning and teaching approach:
Lectures (60 hours in 15 weeks)
Tutorials (15 hours in 15 weeks)
Discussions (10 hours in 15 weeks)
Assignments (20 hours in 15 weeks)
Video and IT for modeling (5 hours
in 15 weeks)
Assessment:
Semester end examination (60%)
Assignments (20%)
Project work (20%)
Subject Matter
1. Introduction (5 hours)
Circular flow of income,
National
Income Accounting, Production boundary concept, Domestic and national product,
National product at market price and at factor cost. Flow of funds account,
national wealth and balance sheet.
2. Income and Spending (35
hours)
Keynesian Model:
Aggregate Demand and Equilibrium Income. Consumption and Aggregate Demand. The
Multiplier. Government Sector and Budget. Money Interest and Income: Goods
Market and IS Curve. Money Market and LM Curve. Simultaneous Equilibrium.
Efficacy of Monetary and Fiscal Policy and Policy Mix. Derivation of Aggregate
demand Schedule. Aggregate Demand and Aggregate Supply Analysis, Multiplier
using Aggregate Supply and Aggregate demand.
3. Behavioral Functions: (20
hours)
Consumption and Saving,
Investment and demand for Money. Long Term theories of Consumption: Fisher’s
Inter-temporal consumption Decision model, Life Cycle and Permanent Income
Theory. Consumption under Uncertainty and liquidity Constraint. Investment
Spending: Capital Stock Adjustment Model and Accelerator Principle. Tobin’s q
theory. Discounted Cash Flow Model. Residential and Inventory Investment.
Demand for Money: Components of Money Stock. Quantity theory of Money.
Functions of Money. Demand for Money, Income Velocity of Money. Money
Multiplier. Instruments of Monetary policy.
Reading list
Essential Reading:
1. Dornbusch, R., Fischer,
S. and Startz, R. (2010); Macroeconomics. (11th Edition),
Tata McGraw Hills Publication.
2. Dequech, D. (1997). Post
keynesian economics: Debt, distribution and the macro economy. Journal of
Economic Issues, 31(3), 872-875.
Suggested reading:
1. Blanchard, O. (2002). Macroeconomics
(3rd edition), Prentice Hall.
2. Mankiw, N. G. (2010). Macroeconomics
(7th edition), Worth Publishers.
3. Krugman, P. R., &
Wells, R. (2013). Macroeconomics. New York, NY: Worth.
4. Hubbard, R. G., &
O'Brien, A. P. (2006). Macroeconomics. Upper Saddle River, N.J: Pearson
Prentice Hall.
5. http://www.hoffmanmarcom.com/marketing-communications/case-studies.php
6. http://economics.about.com/od/economics-basics/u/Macroeconomics-101.htm
7. http://global.oup.com/uk/orc/busecon/economics/gillespiebusiness/01student/cases/
(Updated
June, 2013)