Introduction to Macroeconomics

Spring 2011

"We are what we repeatedly do. Excellence, then, is not an act, but a habit.” Aristotle





Welcome to Introduction to Macroeconomic Principles. It is a wonderful time to be taking a macreconomics course and I am confident the course material will prove to be important far after the course is over. You should think of this course as I do, An Intelligent Citizen's Guide to Macroeconomics. At the end of the semester you should have a much better understanding of many important public policy issues we will face in the near future plus an insight into the heated debates over the economic stimulus package and the unprecedented efforts by the Federal Reserve to bail out the financial system. In fact, at the center of the course is the basic question: what is the proper role the government can play using monetary and fiscal policies to manage the economy? The role of the government is also a central question in microeconomics, but here you will note early on that macroeconomics, much more so than microeconomics, focuses on concepts that show up on the nightly news or in the daily papers - inflation and unemployment, economic growth and recessions, exchange rates, interest rates, budget deficits and trade deficits.


You also need to know this course is a General Education course where the three required skills are your ability to Read Complex Texts, Use of Quantitative Data, and Use of Information Technology. To succeed you will need to read articles from the "popular" press and "push" around some numbers - and you will be using IT to do it. 


If you are still with me, than you should review the course's goals to see what it is that you need to accomplish in the course, the structure of the course, and the method of evaluation since these are the "rules" for the semester - rules you need to understand if the experience is to be a rewarding and successful one.



The goals of the course are specified in terms of what you should be able to do when the course is over and not what we will do during the course. The course is designed to help you bridge the gap between "theory" and "reality," and along the way you will learn more about that "real" world into which you will be graduating. There are a few basic economic principles that will be valuable to you regardless of your major or career choice, and we'll start with them. Another feature of the course is its emphasis is on thinking critically and solving problems rather than memorizing. The good news is these are THE skills demanded in today's dynamic work force. The bad news is this is not easy. In fact it is quite difficult so you will need to practice at it, which is why there are many opportunities during the semester to practice. As for the goals, when this course is completed, you should be able to:  


effectively use interpret tables, graphs, and some simple equations


identify the 'economic logic' or 'economic principles' useful in interpreting current or historical events


describe the characteristics of alternative economic systems and the broad outlines of the major ideological views on economic systems


explain the "theoretical" justification for international trade and identify the pros and cons of free trade


demonstrate an understanding of the supply and demand model of prices


define the  important macroeconomic variables and describe their strengths, weaknesses, and track record


describe the evolution of economic theory and economic policy including the key roles played by the Great Depression, the Great Stagflation, and the Great Recession


utilize the AS-AD model to explain changes in macroeconomic performance and the impact of policy decisions


explain the role of a monetary system in a modern economy including the role of the Federal Reserve


explain the role of fiscal policy in a modern economy


explain the process of economic growth, identify economic growth successes and failures, and identify policies that could affect growth rates


better contribute to discussions on public policy and election issues




For most of you this course will be very different from what you are used to because all of the material is on-line, which will require a little adjustment in how you work during the semester. It will also require you to use Sakai, an interface between you and the material.

Once you are into Sakai you will find the following parts to the course that can be found behind icons appearing on the home page for the course. Each of these links is explained briefly below.  


The Schedule page should be monitored regularly because this is where you will find the daily schedule for lectures & readings, assignments, exams, extra credit opportunities and review problems. 

  • Lecture & Reading: Here you will find two sets of readings. The first are the equivalent of the textbook and they are available online. Also included are outside readings drawn from newspapers, magazine, and academic journals that will be posted on the Readings page.
  • Assignments: Here you will find the assignments and they appear on the date they are due. You are responsible for 4 assignments during the semester.
  • Practice questions: These we will discuss in weekly after-hours problem-solving sessions. You should try to make the sessions, and if you can't, at least try your hand at these sample questions. I suggest that after you take them you print out the results and then revisit the readings to see where you went wrong. You could also bring the sheet to office hours or the review sessions since this helps identify the material you need help with.


Course Outline is what it says - an outline of the entire course. Included there are most of the key concepts and I suggest you print this out as a study guide for your exam preparation.


On the Exams page you will find a copy of exams from a previous year PLUS copies of each of this semester's exams that will be posted soon after the exam is taken along with the answer key and any needed information regarding the scale and interpretation of results. You should check out the answers to determine your grade and make sure you agree with the answers since there have been instances in the past where students have raised legitimate concerns regarding the answers. I will also upload to Sakai your scores only 4 times during the semester – after each exam – so if any changes are made between exams then they will not show up until the next exam upload. If you have any questions you should see me in my office, BUT I WILL NOT RESPOND TO ANY EMAILS OR QUESTIONS THAT ASK FOR INFORMATION I HAVE ALREADY ADDRESSED EITHER IN ONLINE ANNOUNCEMENTS OR INCLASS ANNOUNCEMENTS. SO READ MY ANNOUNCEMENTS.


The Message link is for on-to-one communications and it is the email you should use to contact me about course related material. You should check it on a regular basis.


The Discussions and Private Messages link is for one-to-many communications. This link you should check on a regular basis since this will be used as a means of getting information to the class regarding the course plus it is a great place to post questions that you should post under the Class Info link. The FYI is for info that is interesting but not directly related to macro. This is also the online version of class participation. You will not be expected to contribute to all discussions, but you are expected to make a meaningful contribution to the discussions during the semester.


The Information Sources page links you to an index of sources of economic data and information.  



Your course grade will be based on a number of requirements you should be aware of at the outset since the large size of the class combined with the number of requirements makes it impossible to allow any late work. You need to know what you are responsible for - and when it is due. Here is the list of requirements for the course.


Assignments:  There are assignments you will be required to hand in during the semester and they MUST BE TYPED AND HANDED IN ON THE DEADLINE.  THEY MUST INCLUDE THE # OF THE ASSIGNMENT AS IT APPEARS ON THE ASSIGNMENT AND TITLE AS WELL AS YOUR NAME. I do not care if it is your 3rd assignment for the semester, I care that it is the course’s 3rd assignment. You will have flexibility in terms of which assignments you do, but none in terms of when they are due. The list of assignments may change over the semester so you should monitor regularly the Schedule and the forums. You will be responsible for ONLY 4 of the assignments. You will receive NO extra credit for doing more than four assignments. 


Exams:  In addition to the assignments, there will be three semester exams and a final exam. The exams will focus on your skill at solving problems by applying the principles and concepts discussed in the course. Think of the exams as a set of word problems from high school, so the exams will tend to be difficult and the scores somewhat lower than if the questions had been composed of recall questions. Before you take the first test you should get some practice – look at the practice questions and / or the test from a previous year. This will give you a better idea of what to expect, which should help reduce the surprise effect on that first exam - and improve your grade. ALSO, if you have no grade lower than a B- on any semester exam plus you have done all of the assignments, you will be given the opportunity to skip the final exam - a reward for consistently good work. 


Discussions and Participation: You will be required to participate in class and in online discussions during the semester. Each class you will be assigned questions that you should come to class prepared to answer, and you will be graded on your participation. You will also need to post at least one interesting article to the discussions with some comment and participate in at least two discussions. Macroeconomics is always in the news these days, and you will need to be part of the discussion of the top stories.


The grades in the course will be based upon the following weighting scheme.   



   worst semester exam


   best semester exams


   final exam


Assignments (first 4)







And then there is class attendance. While I realize the temptation to cut class is higher in a large class (an example of opportunity cost), attendance does matter and it may be factored into your final grade. For those students that miss more than four classes during the semester, you may be penalized up to a grade point for every class above the four you miss. Also, in this course I will follow the procedure outlined in the University manual and any registered student will be dropped from the course if they miss the first two classes. The attendance data is based on your handing in the daily index cards, so do not use the “I was there and passed it in” excuse since you have been warned.



You should also note that there is not a textbook and that all of the materials that you will need are available on-line. There is a ECN202 Handout you must purchase at i-copy located at the Emporium.  Included here will be much of the material that will be discussed during class periods and it will become your notebook. If you do not like reading the material online, or if you simply want to have a hard copy, you could also purchase a copy of the ECN202 Readings at i-copy.


How to Succeed

If you got this far, you have already demonstrated an interest in doing well, so think about the following "Tips for Success" that I have learned from talking with students about their successes and failures in the course. Isaac Newton once explained his greatness by noting that "I stand upon the shoulders of the giants of the past," and you will have the chance to learn from those who came before you. As a starter, I would suggest you read "Psst! 'Human Capital," a very brief op-ed piece from the New York Times, and then think about some of the following suggestions.

1.     show up: what do you say to a student who writes you a letter describing the problems they had with the class and you see he/she has missed half the classes. I am more inclined to give the F they "earned" rather than the sympathy they seek. Also, there is a statistical relationship between attendance and grades, so keep this in mind as you think about not showing up.

2.     read: imagine my surprise when I asked a failing student if they had done the readings and the response was "some of them." The exams are built on the readings and the class discussions, so I would expect the non reading student "earned" that F.

3.     practice: Every exam question is a word problem, so you need to get good at identifying problems - and solving them - and you get good with practice. So do the review quizzes and the practice exams to get yourself ready for the real exam. [Be careful, however, when studying past questions since I will seldom ask the same question and you will be penalized if you take the approach "this looks like that earlier questions where the answer was___." You can count on me having changed something from the original even if it looks similar so try to reason through the question rather than recall an earlier answer.]

4.     practice more: It was worth repeating because practicing is crucial. But make the practice useful, so when you do those exams and quizzes, do them alone. Too often I see caring students do awful because they work with friends on the quizzes, and not surprisingly the group does well, but there is no group when you do the exams. Work with the group after you have done the quizzes alone and compare results - but do them alone.

5.     manage your time: What do you tell a flunking student who works 35+ hours a week and takes a full-time load? I tend toward telling them that Superman and Superwoman were only imaginary superheroes. While I know school is not cheap, this is a recipe for disaster for the overwhelming majority of students. You need to manage your time, and why not start where most of your instructors did when they were in college. You have 15 hours of classes, and each hour of class "comes with" three hours outside of class - so now we are talking 15 +45 = 60 hours, which is more than a full-time job. Add on to that those 35 hours of work and you are at 95 hours - and you only have 168 hours in a week. This gives you about 10 hours for sleeping, eating, and .... You get the picture.

6.     turn off those cell phones: While time is scarce and must be managed, you can also do things that help you get more out of your time. As a starter, turn off those cell phones. How can you really study if the cell phone is continuously interrupting you? You can't, so take some time during the day where your friends and family know you are "off line It will not take long for "the world" to realize you are busy and they must work around your work schedule.

So now let's get to the course, and take the first step toward a successful semester.