ECONOMICS 152: PRINCIPLES OF MACROECONOMICS 

Professor Libby Rittenberg

Palmer 102

Extension: X6410

COURSE OBJECTIVE:

The purpose of this course is to provide an introduction to the economic way of thinking through exposure to the language, theories, and methods of economics.

As do other disciplines, economics has its own particular vocabulary. It is necessary to learn this new language in order to clarify thinking and to reduce misunderstandings. Being "economics literate" will also enable you to understand much of the economic information that appears in newspapers and magazines. Although this jargon may at times seem obscure, using a common and precise language is the main building block toward developing theories and models of how economies and their parts work.

The theories of economics attempt to explain decision making in a world of scarcity. They allow us to understand and predict the economic choices that people make and their effects on society. Economic theories have been used to analyze such diverse issues as unemployment, inflation, health care systems, education, technological innovation, crime, and fertility. The impact of government actions on the economy as a whole and on the decisions of individual units is also a major area of concern. Thus, economic theories have also been used to analyze the effects of government spending and taxing policies, as well as government policies to redistribute income and to reduce environmental pollution.

Economic analysis is based on models, which are simplifications of the real world. In this course the models we will be studying are often represented with graphs and simple algebra.

Economics is divided into two main branches. Macroeconomics looks at the behavior of the economic aggregates—at the determination of and fluctuations in national income, employment, the price level, and economic growth. Microeconomics focuses on the behavior of the units—the firms and individuals—that make up the economy. It is concerned with how the individual units make decisions and what affects those decisions. These perspectives are just two ways of looking at the same thing. Macroeconomics provides the top-down view and microeconomics the bottom-up view of the economy. Thus, the two views are complementary, not competing ones.

This course begins with a general introduction to economic ideas and methods and then proceeds to focus on macroeconomic issues. In order to continue the study of economics, and in order to have a more complete picture of what economics is, you will also need to take a course on the principles of microeconomics (EC 151). Credit in courses in both branches of economics is required for most upper-level courses in the department of economics and business.

Throughout the course we shall attempt to relate the theories to understanding real world problems and to analyzing issues of public policy. The application of abstract theories to events and actual situations should serve to solidify your understanding of the theories and allow you to see their usefulness, as well as their limitations.

Learning economics requires active participation. It is not enough to read the text and listen to lectures. You must be actively engaged with the material. Ask questions of me and of your classmates. Work through numerical and graphical problems. Come to class fully prepared. Think about how the theories being discussed might apply to your everyday life. Read the newspaper every day and think about how economic principles might or might not be used to solve the problems of society.

Grading:        The final course grade will be based on the following weights: