EC202 Course Outline

1. Fundamentals

a. Resources

b. Scarcity

c. Opportunity Costs

d. Rational Decision Making

e. Marginal Benefits and Marginal Costs

f. The Production Possibilities Frontier

g. Comparative Advantage

h. Specialization

i. Terms of Trade

j. Gains from Trade

2. Demand

a. The Demand Curve

b. Law of Demand

c. Market Demand

d. Change in Demand

e. Determinants of Demand

3. Supply

a. The Supply Curve

b. Market Supply

c. Change in Supply

d. Determinants of Supply

4. Market Equilibrium and Policy

a. Demand, Supply, and Equilibrium

b. Surpluses and Shortages

c. Changes in Demand and Supply

d. Complex Changes

e. Price Ceilings/Floors

f. Taxes on Suppliers/Consumers

5. Public Finance

a. Circular Flow Model

b. Progressive, Proportional, and Regressive Tax

6. Measuring Output and Income

a. GDP

b. The Expenditures Approach

c. Real GDP and GDP per capita

d. GDP – an imperfect measure

7. Economic Growth

a. A Historical View

b. Economic Growth and PPF

c. Measuring Economic Growth

8. Business Cycles, Unemployment, and Inflation

a. The Business Cycle

b. The Labor Force

c. Cyclical, Frictional, and Structural Unemployment

d. The Natural Rate of Unemployment

e. Inflation

f. CPI

g. Real and Nominal Income

Midterm 1 - Tentatively Scheduled for 02/14

9. Aggregate Expenditures Model

a. Marginal Propensity to Consume/Save

b. Consumption, Savings, and Income

c. Investment Demand

d. Investment, Government Purchases, and Net Exports

e. AE Equilibrium

f. Multipliers

g. Math Behind AE

10. Aggregate Demand and Aggregate Supply

a. Aggregate Demand

b. AE and AD

c. Determinants of Aggregate Demand

d. Aggregate Supply in the Short Run

e. Determinants of Aggregate Supply

f. Aggregate Supply in the Long Run

g. Equilibrium Dynamics

11. Money

a. The Money Supply

b. Banking

c. Fractional Reserve Banking

d. The Federal Reserve

e. The Money Multiplier

f. Money Demand

g. Interest – The Money Market

12. Monetary Policy

a. Interest Rates and Investment

b. Interest Rates and Aggregate Demand

c. Open Market Operations

d. Reserve Requirement

e. Discount Rate

f. Federal Funds Rate

g. Expansionary and Contractionary Monetary Policy

h. Limitations of Monetary Policy

i. The Liquidity Trap

13. Fiscal Policy

a. Government and Tax Multipliers

b. Expansionary and Contractionary Fiscal Policy

c. Problem Solving with Taxes and Government Purchases

d. Automatic Stabilizers

e. Limitations of Fiscal Policy

f. Crowding Out

14. Competing Views in Macro Theory

a. Origins of Macroeconomics

b. Postwar Challenges to the Keynesian Approach

c. Rational Expectations and Modern Macroeconomics

d. Competing Views in Macroeconomics

15. International Finance

a. Exchange Rates

b. Flexible/Fixed Exchange Rates

c. Balance of Payments

16. Efficiency of Markets

a. Consumer and Producer Surplus

b. Economic Surplus and Gains from Trade

c. Deadweight Loss

d. Productive and Allocative Efficiency

e. Efficiency Analysis – price ceilings, price floors, taxes

17. International Trade

a. Comparative Advantage and Specialization

b. Terms of Trade

c. Gains from International Trade

d. Small-Country Model

e. Welfare Effects of Trade

f. Barriers to Trade

Midterm 2 - Tentatively Scheduled for 04/10