syllabus11

Principles of Macroeconomics Economics 11A

Professor Woolf Spring 2005

www.uvm.edu/~awoolf

General Information:

Phone: 656-0190

Office: 339 Old Mill

email: awoolf@zoo.uvm.edu

website: http://www.uvm.edu/~awoolf/classes/spring2005/ec11/ec11.html or go to www.uvm.edu/~awoolf and follow the links

Class meeting time: Monday, Wednesday, Friday 1:25 – 2:15 301 Williams

Office Hours: Monday, Wednesday, Friday 2:30 – 4:00 pm. You don’t need to make an appointment at those times, but if you can’t make those hours and want to schedule a meeting at some other time, we can arrange that.

Texts:

Mankiw, Principles of Macroeconomics (3^rd edition), 2002, South-Western

Hakes, Study Guide for Mankiw

Also recommended is homeworkexpress, bundled with the text. Homeworkexpress is an on line study aid. The URL for it is http://homeworkxpress.swlearning.com/

The Course:

Economics 11 is a survey course in macroeconomics, the study of how the overall economy behaves. The course has three parts. Part 1is a general overview of what economics is all about. Part 2 is a survey of microeconomics, which is the study of how individual actors in the economy (consumers and firms) behave, including demand and supply analysis. Part 3 is an analysis of the macroeconomy, which looks at the determination of broad economic aggregates, including the level of output and income, the growth rate of the economy, and the problems of unemployment and inflation.

The course has three basic goals: (1) to introduce you to the tools and concepts of economic reasoning; (2) to give you an understanding of basic economic theories; and (3) to use these theories to explain and understand the workings of our economic system. We will do that by explaining the behavior of the four important macroeconomic variables: output, economic growth, unemployment, and inflation.

You will also be required to use computers in this course. This will involve using email, posting to and reading from discussion lists, and accessing data and articles on the internet. Most of this will take the form of homework assignments. In fact, this syllabus can be found through my home page on the internet at http://www.uvm.edu/~awoolf. If you lose this syllabus, you can print another one from that web site. Homework and reading assignments and other handouts will also be posted on the website. You are encouraged to engage in discussion with fellow students (and me) on the discussion list (listserv) that I have set up for this class. Your first homework assignment will guide you through the process of enrolling in the listserv.

Economics 11 covers a great deal of material; it is like learning a new language or learning to use new tools. You should expect to at least one hour, and probably two hours, outside of class for each hour you spend in the classroom. A word to the wise: read each chapter before the lecture on that chapter. If you let yourself fall behind, it will be very difficult to catch up. Each lecture and each topic in economics builds on previous concepts.

By the end of the course you should be able to read and understand economics articles in The Wall Street Journal and other publications and have an intelligent conversation about questions like:

· What are the causes of economic growth? Why are some nations more developed than others? Fifty years ago, Argentina was richer than South Korea, and South Korea was about as poor as most African nations today. Why has South Korea, and many other nations of Southeast Asia, grown faster than countries in Latin America? And why are African nations so poor? What are the benefits of economic growth? What is economic growth, anyway?

· The U.S., Mexico, and Canada signed the North American Free Trade Agreement (NAFTA) in 1996, which lowered barriers to trade and investment between the U.S., Canada, and Mexico. Who benefits from expanded international trade? Is free trade a good policy for the U.S.? What about developing countries?

· Why did the U.S. economy go into a recession in 2001?

· What determines the level of economic activity in a nation? What is GDP?

· Why are

· What does it mean to be poor in the U.S.? What can we do about it?

· What determines the level of unemployment in the nation? How much control does the government have over the unemployment rate? Should we be worried about unemployment? Why?

· What is inflation? What is deflation? Why are they both problems?

· Why is money important in an economy? What determines the value of a dollar?

· Why isn’t there enough gold in Fort Knox (or anywhere else) to pay off all the holders of dollar bills in gold?

· What economic role does the government play in an economy?

· What is the role of a stock market in an economy? Why did the stock market rise so much in the late 1990s and then tank in 2000 and 2001? Should you invest your money in the stock market?

· Who is Alan Greenspan?

· What is the Federal Reserve System and how do its policies affect the economy?

· In 2000, the federal government had a budget surplus of $240 billion. Last year, the federal government spent $422 billion more than it received in taxes, running a large deficit. What is a federal deficit anyway? Should we be concerned about it?

· The national debt is $7.6 trillion, or $7,600 billion. Is that a lot of money? What is the national debt and what effects does it have on our economy now and in the future? Should you be worried about it? Should your children?

Economics has been called the “dismal science.” If these kinds of questions are interesting to you, then you won’t find economics dismal.

Grading:

Exams: There will be two exams and a final in the course. Each exam will be worth 20% of your course grade and the cumulative final exam is worth 30%.

Homework: Regularly assigned homework problem sets will account for 10% of your grade. They will be due on the date assigned. They can be turned in early, but I will not accept late homeworks. If you do not turn in an assignment, you will receive a 0. If you turn in an assignment that shows you have not put in much effort into answering the questions, you will receive a 1. If you show effort and answer the questions, you will receive a 2. If you plan to be out of town or sick on the day a homework is due, hand it in early.

Quizzes: There will also be unannounced quizzes during the semester. The quizzes will be brief and will cover any material that we have recently discusses in class, in lectures, readings and any materials distributed in class or posted on the web. The quizzes will account for 15% of your final grade. There are no make ups, but you will be allowed to drop the two lowest quiz grades (this includes quizzes that you miss). If you come to class after the quiz has been handed out, you will not be allowed to take it.

Stock Market: You will be playing a stock market simulation called the Stock Market Game Program between February and April. Each of you will be responsible for investing $100,000 in the stock market. You will be required to participate and write a short paper about the Stock Market Game experience that will be worth 5% of your grade. Whoever gets the highest return on their initial investment will receive 10 extra points on their 100 point final exam grade for the course. The second place student will receive 8 extra points, the third place winner 6 extra points, and the fourth place winner will receive 4 extra points.

Your course grade will be based on your knowledge of the material, not based on how hard you work or how much you study. The grading standard is as follows:

A Understands the material in a comprehensive manner; understands subtle distinctions and clearly comprehends the concepts and applications discussed in class.

B Has a good grasp of the material covered; generally understands most of the concepts discussed and covered in class and readings.

C Shows an average comprehension of the material but cannot explain basic concepts well or apply concepts to slightly different cases.

D Understands some of the material, but does not have a grasp of basic concepts or issues we have discussed.

F Does not show an understanding of the basic material in the course.

Please note the dates of the exams on the syllabus. All exams will be in the classroom unless I tell you otherwise. If you have any exam conflicts, you must let me know in writing or via email one week before the scheduled date of the exam.

Course Schedule:

The following is a timetable for the course. I expect you to do the assigned readings before the class period. All chapter assignments refer to Mankiw. Other readings will be assigned during the semester and will be available either on the class website or via email.

Week 1 Introduction to Economics Ch 1,2

I, Pencil

Week 2 Trade and Comparative Advantage Ch 3

Bastiat, a Petition (1845)

Week 3 How Societies Deal With Scarcity Ch 4

Week 4 Applications for Supply and Demand Ch 6

Ticket Scalping at the Super Bowl

EXAM 1 Feb 18

Week 5, 6 Introduction to Macroeconomics Ch 10, 11, 15

Mark Twain, 16^th Century Political Economy, Ch 33 in A Connecticut Yankee in King Arthur’s Court (available as an ebook at Bailey Howe)

Week 7 Growth and Productivity: Why They Matter Ch 12

Week 8 Financial Markets Ch 13