COURSE NUMBER: ECO 230


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ECO 230

I. TITLE: PRINCIPLES OF MACROECONOMICS

II. CATALOG DESCRIPTION:
An introduction to the application of the basic principles of supply and demand to issues in aggregate economics such as national income accounting, unemployment, growth, inflation, business cycles, and the role played by government through its fiscal and monetary policies.

III. PURPOSE:
It can be said that learning economics is learning to think like an economist. The study of economics instills in the student more than just knowledge of economic facts and principles; it is also learning how to learn. As such, it helps develop students who exhibit the characteristics of the Murray State Graduate in the following ways.
   The student will learn how economics employs the scientific method in deriving, testing and applying theories of human economic behavior within the context of differing economic and political systems in a world characterized by changing technologies and beliefs. The student will then use these theories to analyze and evaluate individual, business, and political decisions and policies. To do so, the student must employ logical and mathematical skills to derive results from economic models and then learn to analyze and communicate to others the implications of these results.
   In other words, memorization of economic facts and principles is not enough; sound reasoning requires knowing more than just "what happened" but also deriving what would have happened, other things remaining the same, and then testing these results to ascertain their validity. The student will also learn to apply basic economic standards of analysis, such as cost/benefit and marginal analysis, to real-world situations in order to obtain useful results. For example, the student will learn to apply tax changes to an economic model and uncover the resulting impact on the aggregate economy; also given multiple effects on important economic factors such as unemployment and inflation, the student will learn to weigh these effects to see which case best enhances the welfare of society.
   Thus, the student will learn techniques that will be helpful in later life. In so doing, the student will come to understand how economic knowledge and thinking is crucial to responsible citizenship in a democratic society; and understand the role economics and various economic systems play in providing analyses and solutions to complex economic, political, moral, and ethical issues.

IV. COURSE OBJECTIVES:
Objective 1: The student will develop an understanding of economic behavior given the constraints imposed by a changing environment. (Characteristics #2,4) *

Objective 2: The student will understand the function of economics in society and the roles played by other disciplines. (Characteristics #4,5,6,7) *

Objective 3: The student in this course will be exposed to the use of economic models as an analytical tool the understand the interrelation of the various sectors of the economy. Within the framework of economic models, the student should be able to explain how government and private actions affect economic outcomes and thus the income of society. (Characteristics #1,3,6,8) *

Objective 4: The student will learn to think critically and analytically about economic issues and problems. The student with learn to evaluate economic models on the basis of empirical evidence using the scientific method. (Characteristics #1,2,6,8) *

Objective 5: The student will demonstrate an ability to apply these principles to fresh economic issues and events, and to evaluate and describe the resulting impact upon the major factors that determine society's standard of living. (Characteristics #3,6,8) *

* These are the relevant "Characteristics of the MSU Graduate"

V. CONTENT OUTLINE:
1. Introduction

A. About Economics (ch. 1, and appendix)
B. Oppty. Cost, Production Possibilities. (ch. 2)
C. Supply, Demand and Markets (ch. 3)
E. Topics in the Market System (chs. 4,5)
a. Distribution of Income
b. Types of Business
c. Fundamental Questions
d. Role of Gov’t.
e. Circular Flow

2. Keynesian Macroeconomic Theory

A. National Income Accounts and Price Indices (ch. 7)
B. The Business Cycle, Unemployment and Inflation (ch. 8)
C. Aggregate Expenditure I - Consumption and Investment (ch. 9)
D. Aggregate Expenditure II - Gov't. and International Trade (ch. 10)
E. Aggregate Demand and Supply (ch. 11)
F. Fiscal Policy, Taxes, Deficits, and Automatic Stabilizers (ch. 12)

3. Money Creation and Policy

A. Money & Fin. Institutions (ch. 13)
B. Banks and Money Creation (ch. 14, and reading on Reserve)
C. Monetary Theory and Federal Reserve Policy (ch. 15)

4. More International Aspects

U.S. and the Global Economy (ch. 6)

5. More Policy

A. Non-Activism, Monetarism & Rational Expectations (ch. 16)
B. Long run vs. Short run perspectives (ch. 17)
C. Debt and Deficits (ch. 18)

6. More International Trade

A. Trade and Comparative Advantage (ch. 37)
B. Balance of Payments and Exchange Rates (ch. 38)

VI. INSTUCTIONAL ACTIVITIES:
The Socratic method will be integrated throughout the course to give the student practice in applying the current framework or model under study to current "real-world" problems such as deficit spending, economic growth, and how demographic changes affect society's economic welfare and lifestyle. This gives students exercise in critical thinking and speaking skills. Other activities include outside readings (beyond the textbook), either on reserve or to be researched, culminating in descriptive essays in out of class assignments.
Well written essays, summaries, and/or position papers will be a part of the graded material as written communication of analytical results are important in learning to disseminate ideas. These assignments or "problem sets" will also include mathematical and graphical analysis of economic questions. Small group learning activities will also be employed in selected sections initially for evaluation. In these sections, group communication will be an important part of the graded assignments. Additionally, the computer lab will be utilized to provide sample study questions and economic simulations. We are currently in the process of choosing a new text for the book. After we determine the quality of the software and simulations that accompany, we will determine the appropriate level of integration of these computer applications and their role in assessment.

VII. FIELD AND CLINICAL EXPERIENCES: N/A

VIII. RESOURCES:
The text, study guide, computerized study aid/simulation, a variety of outside readings and the internet will be made available.

IX. GRADING PROCEDURES:
There will be a two exams during the semester and, of course, a final exam. Each test contains a variety of questions, including problems and essays (approx. 50-60% of the test) . Exams will explicitly assess all five course objectives. The remaining part of the course evaluation will be in the form of:
a) homework problem sets, to be completed as group projects, due at the beginning of class on the due date announced when
    the problem set is handed out. Groups will be determined by the instructor with some student desired combinations allowed.
    Details will be announced in class. Problem sets will emphasize course objective 3.
b) in class quizzes (emphasizing course objectives 3, 4, and 5).
c) three writing assignments graded on both content and grammar. These assignments must be prepared utilizing computer
    word processing and will emphasize course objectives 1, 2, 4, and 5.

The course grade will be determined according to the following proportions:
Exams and Quizzes                         - 40%
Group Homework                          - 10%
Writing Project (3 assignments)       - 25%
Final Exam                                      - 25%

You will find that exceptionally high academic standards are maintained in this course. The Chronicle of Higher Education reports that grade inflation is one type of inflation that has not troubled economics departments nationwide. This is also true at Murray State University. In accordance with Murray State's grading policy, to receive an "A", the student must demonstrate an excellent level of knowledge and the demonstrated ability to apply the knowledge. Merely average work will earn no higher than a "C".

X. ATTENDANCE POLICY:
The attendance policy is left up to the individual instructor in this multi-section course. Note however, that economics is a cumulative subject, current material builds on past material; and thus a de facto attendance policy will always be in force. If you miss a series of classes you will easily get so far behind that your grade will suffer badly. It will be difficult to catch up. Don't let it happen! Also, as understanding (as opposed to memorization) is important in this course you will find it helpful to do the reading before class (as opposed to solely before the exam).
Students are encouraged to ask questions in class. The subject of economics lends itself to a multitude of differing viewpoints on the issues of the day, and questions about the basis for these views are natural. Don't hesitate to ask!

XI. ACADEMIC HONESTY POLICY
The University, College of B&PA, and this instructor do not tolerate academic dishonesty. The College's policy on dishonesty is posted in each classroom and every student is required read and understand this policy! Student groups are allowed to work together on problem sets, but all written work should be the students', copies of another's work is not allowed.

XII. TEXT AND REFERENCES:
ECONOMICS, Thirteenth Edition, McConnell and Brue (likely to be changed).

XIII. PREREQUISITES:
MAT 117, 120, 140, or 150; or an ACT math standard score of at least 23; or consent of instructor.

Last updated February 8, 2000. Designed and maintained by Kyosung Koo