Principles of Macroeconomics

Econ 2203

Spring 2000

Instructor: Dr. Adkins

Office: Business 303

Phone: 744-8637

Office Hours: 1:30-3:00 p.m. Monday, 1:10-2:15 p.m. Thursday, and by appointment. These hours are likely to change during the semester. Consult my web page for the latest information.

Email: lee.adkins@okstate.edu

WWW: http://ladkins.bus.okstate.edu

Purpose

The purpose of this course is to teach you to basic macroeconomic principles that can be used interpret various economic reports and articles you are likely to find in the media. What the author of your textbook refers to as Media Economics comes in two varieties: (1) news reports that discuss the latest up and downs of economic numbers--what economist Paul Krugman refers to a up-and-down economics, and (2) economic policy evaluation--news commentary that explains, condemns or praises our government's macroeconomic policies. Emphasis will be placed on your understanding of the basic macroeconomic principles as well as your ability to use these principles to interpret media reports and commentary.

Guarantee

Your ability to apply economic principles will increase your value in the marketplace. Economics is a powerful tool that will enable you to simplify the world around you. Command of economic principles make you a serious force to be reckoned with in whatever endeavor you choose to pursue. Remember, knowledge is power.

Recommendation

I recommend that you find a study partner. There is a lot of material to learn in this course

and much of it will appear to be overly technical (though I promise you that I will avoid anything that I do not deem necessary to achieve our stated purpose). Each person in the course

will have different opportunity costs associated learning the many things that we are covering. Therefore there are ample possibilities to use the law of comparative advantage to your advantage.

Prerequisites

Although this course is self-contained, you will find a solid working knowledge of supply and demand gained in successfully completing microeconomics to be very helpful. There are no formal prerequisites for this course. Familiarity with how to access information on the Internet will be helpful. Specifically, you should be able to access my web page using Netscape or Internet Explorer. This will be useful because it contains useful information about this course and its contents.


Texts

Macroeconomic Essentials: Understanding Economics in the News, 2nd edition. by Peter Kennedy. Cambridge: MIT Press, 2000. ISBN 0-262-61150-3

Note: This is not the same book that is being used by other sections of this course. Make sure you have the correct one. This is the one that I will use to prepare lectures, quizzes, and exams.

Supplements: Although there is no official study guide for the textbook we are using, there are some course supplements available from Peter Kennedy's web site (http://www.sfu.ca/~kennedy). Include in this material is a test bank that contains multiple choice questions (with answers)! Also, you may find that the textbook used by other sections of this course is useful supplement. It is a more traditional book filled with graphs, equations, and other stuff associated with so-called curve-shifting economics.

Course Outline

My goal is to lecture on 1 topic per week; each topic consists of 1 chapter of your textbook. I advise you to read this material before you attend class. You will find the readings to be short and relatively nontechnical, but do not be fooled into thinking that this material is easy. I assure you that it is not. As Kennedy notes, "the material [in the textbook] is intellectually demanding and is presented at a high conceptual level necessary to for successful interpretation and evaluation of media commentary." At the end of this syllabus, I will give you some tips on how to succeed in this course.

  1. Introduction and Overview

    Reading: Chapter 1 and Appendix A. When you read these chapters (especially Appendix A) don't expect to understand everything it contains. This is the overview of what you will be learning this semester. The goal is to understand it all by the end of the semester, when we cover Appendix A again!

  2. Measuring Economic Variables

    Reading: Chapter 2 and Chapter 3

  3. Equilibrium Demand and the Multiplier

    Reading: Chapter 4

  4. Supply Side

    Reading: Chapter 5

  5. Growth and Productivity

    Reading: Chapter 6

  6. Fiscal Policy: Crowding Out

    Reading: Chapter 7

  7. Money Supply

    Reading: Chapter 8

  8. Inflation

    Reading: Chapter 9

  9. Interest Rates and Bond Prices

    Reading: Chapter 10

  10. Real vs. Nominal Interest Rates

    Reading: Chapter 11

  11. Stagflation

    Reading: Chapter 12

  12. Inflation: Part II

    Reading: Chapter 13

  13. Budget Deficits and Debt

    Reading: Chapter 14

  14. Balance of Payments

    Reading: Chapter 15

  15. Open Economy

    Reading: Chapter 16

Exams and Grading

All exams will be, for the most part, multiple choice. No make-up exams will be given under any circumstance. An exam that is missed will be assigned a grade of 0, unless the instructor is notified prior to the exam and if the excuse is a legitimate medical one or officially approved. Exams that are missed for excused reasons will not be retaken; instead, additional weight will be given to the final comprehensive exam.

Grading Procedure:

Three exams will be given during the semester. In addition to the 2 exams, a final comprehensive exam will be given. Each of the 3 exams counts 25% of your grade. The final exam counts 25% of your grade. No extra credit assignments will be given under any circumstance.

Do not miss an exam. If for some reason you anticipate a schedule problem (like officially approved athletic travel dates, etc.), talk to me well before the exam so that an alternative arrangement, when possible, can be made. Remember, if you miss an exam you'll get a zero. That means that you'll probably get an F in the course. Don't mess up!

Grades will be assigned on the following scale.

90%-100% = A

80%-89.99% = B

70%-79.99% = C

60%-69.99% = D

Below 60 = F

Attendance Policy

Although I do not take role very often, I expect you to attend class everyday.

You cannot expect to learn very much about economics this semester unless you attend this class regularly. That is not to say that everything you learn about economics this spring will be learned in class. Learning anything as powerful as economic principles is never that easy. On the contrary, most of what you will learn will be learned outside of class as you read, study, and discuss economics with your classmates. The purpose of class is to inform your reading, study, and discussions; lectures are used to present the basic structure of the economic models, illustrate points, answer questions, and to point out subtleties that would otherwise escape your attention. Without attending class, you won't have much of a clue about what or how to study. Attendance is crucial. It benefits you, your classmates, and me.

The taxpayers of Oklahoma provide the University a substantial subsidy to cover the cost of your education (they pay about 77%). In order to protect the taxpayers' overwhelming interest, I reserve the right to deny assistance to any enrolled student who does not attend class on a regular basis. Office hours are provided to assist those who take their academic responsibilities seriously. In other words, if you don't come to class regularly, don't bother coming to my office either.

Cheating Policy

Cheating in any form will not be tolerated. If you are caught cheating on an exam you will be given a zero for that exam and your actions will be reported to the proper authorities, which include your advisor, my department head, your academic dean, and the Office of Student Conduct. Cheating includes, but is not necessarily limited to, the following: obtaining, using, or distributing a copy of an exam before it has been given to all who are required to take the exam; altering your exam after it has been graded; copying answers or otherwise obtaining assistance from another student during an exam; using materials that are not permitted during an exam (e.g., cheat sheets); and providing information about an exam to other students who have yet to take the exam. It is also your responsibility to take the necessary precautions to prevent another student from seeing and/or using your exam as a source of information. Be smart, don't cheat.

Course Motto

Economics is fun!

IMPORTANT DATES

Academic Calendar
Classes Begin 8/21/2000
Last day to enroll 8/25/2000
Last day to drop with no grade and no fees charged for courses 9/1/2000
Fall Break 10/2/2000-10/2/2000
Last day to drop a class with an automatic "W" 11/10/2000
Last day to withdraw from the University with an automatic "W" 11/10/2000
Thanksgiving Break 11/23/2000-11/24/2000
Last day to withdraw from the University with an assigned "W" or "F" 12/1/2000
Final Examinations 12/11/2000-12/15/2000
SEMESTER ENDS 12/15/2000

Dropping a Course and Withdrawing from the UniversityStudents often confuse these terms. Dropping a Course (or courses) may occur during the first twelve weeks of the semester. This means, however, that the student is still enrolled in all other courses. (Developmental studies courses cannot be dropped without written permission of the advisor.) After the twelfth week (November 10, 2000), a course may be dropped by petition but only when verifiable extenuating circumstances can be demonstrated. Verifiable extenuating circumstances must be reasons beyond the control of the student, such as illness or accidental injury. Poor performance in class is not an extenuating circumstance. A petition to drop a course after the deadline must be obtained from the student's advisor and requires the signature of the advisor and dean with an assigned grade of "W" or "F" by the instructor. The Office of Academic Affairs must then approve the petition. Withdrawing from the university means that you are dropping all of your courses and are no longer enrolled for the current semester. This may occur until the Friday before Pre-Finals week. The withdrawal process is initiated in the student's dean's office. CHECK THE IMPORTANT DATES SECTION FOR THE "DROP" AND "WITHDRAWAL" DEADLINES FOR THIS SEMESTER.

Special Accommodations for Students --According to the Americans with Disabilities Act, it is the responsibility of each student with a disability to notify the University of his or her disability and to request accommodations. If any member of a class thinks that he/she has a qualified disability and needs special accommodations, he/she should notify the instructor and request verification of eligibility for accommodations from the Office of Student Disability Services, 326 Student Union. Please advise the instructor of such disability and desired accommodations at some point before, during, or immediately after the first scheduled class period.

Where to Go for Help

Academic Advisor - All students have an assigned ADVISOR. Although it is true that only certain categories of students need an advisor's signature of approval on class registration cards (freshmen, new transfers, and readmissions), all students will benefit by conferring with their advisor on a regular basis. If you do not know your advisor, or are unhappy with the advisor, the Student Services Director for your college can assign another advisor. Go to your Student Services office for assistance.

Adult Student Organization (045 Student Union) - Provides support for nontraditional students through social activities, speakers, and campus activities. CALL 744-7508 for more information.

University Counseling Center (310 Student Union or 002 Student Health Center) - Professional counselors offer confidential personal and/or career counseling. CALL 744-5472 or 744-7007.

Mathematics Learning Resource Center (Lower Level, South Murray) Tutors are available to answer questions for classes ranging from Beginning Algebra through Calculus II. Tutoring for Differential Equations and Linear Algebra is offered at specific times. Videotapes are available for use in the lab or for overnight checkout. The MLRC contains a networked PC computer lab with mathematical software. Computers are also available for checking e-mail, web-browsing and word processing. CALL 744-5818 for more information.

OSU Writing Center (104 Morrill) The mission of the Writing Center (W.C.) is to help writers throughout the writing process from idea development to final draft revision. The primary service is a one-to-one, 25 minute conference that enables students to learn techniques that will help them create and revise future projects independently. Students can also get help through computer tutorials, accessing the W.C.'s homepage at http://www.writing.okstate.edu or e-mailing a paragraph for a brief critique via: OSU-WC-TUTOR@ listserv.okstate.edu. The Grammar Hotline allows students, faculty, and staff to call with questions concerning correct usage, grammar, and style. Eleven IBM and four Mac computers are available for word processing, Mircro Project, and PageMaker. Our fall/spring hours are 11:30 a.m. to 7:30 p.m. Monday and Tuesday and from 9:00 a.m. to 5:00 p.m. Wednesday through Friday. CALL 744-6671 for more information.

Students Disability Services (326 Student Union) - Students with disabilities who wish to receive academic accommodations should register with Student Disability Services. To receive services, students must submit appropriate documentation and complete an intake process during which the existence of a qualified disability is verified and reasonable accommodations are identified. CALL 744-7116 for information.

Student Government Association (040 Student Union) President: Vic Wheeler. E-mail: wheeler@okstate.edu. CALL 744-6500.

Library Hours – Edmon Low Library (744-5029)

Monday - Thursday 7:30 a.m. - 2:00 a.m. Contact the following for information of hours of operation:
Friday 7:30 a.m. - 10:00 p.m. Architecture Library 744-6047
Saturday 8:00 a.m. - 9:00 p.m. Curriculum Materials Library 744-6310
Sunday 12:00 p.m. - 2:00 a.m. Veterinary Medicine Library 744-6655
*Hours will vary during University holidays.    

General Expectations of Students By enrolling at Oklahoma State University, a student accepts the responsibility for compliance with all local, state and federal laws and University policies, while retaining the rights guaranteed under the constitution of the United States. A student alleged to have engaged in any misconduct, be it academic or nonacademic, shall have the right of due process and appeal as delineated in Student Rights and Responsibilities Governing Student Behavior. The University expects students to show respect for the rights of others and for authority, to represent themselves truthfully and accurately at all times, to respect private and public property, to fulfill contractual obligations made with the University including those that are financial, and to take responsibility for their own actions and the actions of their guests. CALL 744-5470 for more information.

Computer Labs A complete description of CIS' computer labs is available on-line via the World Wide Web at: http://home.okstate.edu/. Lab information is also available by telephone at the CIS Help Desk. Call 744-7836 for more information.

Seek Answers to Your QuestionsThe OSU faculty and staff want you to be successful in your educational pursuits. If you have questions or concerns, seek help EARLY. We are here to assist you.

How to Succeed in Econ 2203

If you want to succeed in Econ 2203 there are several things which you must do on a regular basis. Average students (those with 2.5 GPA) can usually make above average grades in my class if they develop proper study habits. The basic rule of thumb is: Spend 6 hours per week studying economics and success is likely to follow. Here is my personal formula for improving performance.

1. Read the book. Read assigned material before coming to class. This prevents what I call the foreign language syndrome (FLS). FLS occurs when students attend class, but don't have a clue as to what the professor is saying... he is apparently speaking in an unknown tongue. Students then rationalize not attending class by saying to themselves, "I don't get anything out of his lectures." If you want to get the most out of these lectures, read the book before coming to class.

2. Reread the book. The text is very concise. Although the material looks simple (few equations, graphs, etc) I can assure you that it is not. Read the book carefully and make sure you understand everything you read in it.

3. Attend class regularly. For most, reading the book and completing the study guide are necessary but not sufficient conditions for doing well in Econ. You will find that by attending class you will often discover what the teacher finds important. If the teacher believes something is important, then ... . By attending class and paying attention to what I say, you will often be able to economize on the amount of material you need to cover on your own.

4. Review notes. After each class, it's a good idea to review that day's notes. Take a few minutes to make sure everything you have written down is 1) correct and 2) makes sense to you. You will usually find "truth" in you textbook. If your notes or your book don't make sense, either figure out why or ask about it in the next class. If you solve each of these little puzzles as you go along, then when test time comes you'll be working under much less stress and will tend to do much better.

5. Rewrite notes. If you are really serious about improving your grade, I've found that it is a good idea to rewrite your notes at least once before the exam. There is some mysterious force at work in the universe which imparts greater understanding and memory to those who actively participate in the learning process. Active participation includes such things as discussion and writing. Reading notes is not active. Writing the notes is active, and by doing this, you will improve comprehension and retention and will improve your grade.

6. Use the materials posted on Kennedy's web site. There is no official study guide for this course. However, the author of your book is a very hardworking fellow and he has generously provided us with 119 pages of multiple choice questions that go with our text. By going through these materials you will know exactly what to expect on exams. Don't wait until the week before the exam to start. Use these materials on a weekly basis.

7. Don't fall behind. The knowledge you build in this course accumulates over the semester. The pace we will keep is brisk--just as it is in any real college course. If you fall behind you will probably not be able to catch up and your performance will suffer.

8. Don't cram. For the type of thinking exams you will encounter in this class, it is very important that you keep up and study as you go along. And, whatever you do, please don't stay up all night studying before an exam. This is just about the biggest mistake one can make in an economics class. At that point, you will do better with a fresh mind than one dulled with fatigue and filled loose 'facts'.

9. Form a study group. If your schedule and personality permits, study with others in this class. Don't just get together before the exam, get together regularly and discuss the media clips from the textbook.

10. Pay attention to the media. Watch the business news on television (like CNBC); read the Wall Street Journal, Barron's, the Financial Times or other business newspaper; look at the business pages of the Daily Oklahoman or Tulsa World, etc.

11. Work hard. Do as many of the end of chapter media questions as you can stand. Work on the multiple choice questions in the test bank as we go along. Practice, practice, practice.