Principles of Macroeconomics Economics 100 Fall, 2013

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1 Principles of Macroeconomics Economics 100 Fall, 2013 Section 1, MWF, 1:10 to 2:00 Stephen Buckles Section 2, MWF, 2:10 to 3: Calhoun Wilson Text: Principles of Macroeconomics, By Stephen Buckles. Available from Barnes & Noble at Vanderbilt University Bookstore. Remote: A remote classroom response device from TurningPoint (ResponseCard XR) for class participation, feedback, and testing. ResponseWare will also work on your own hardware with an internet connection. You only need the actual device or the ResponseWare for use with you own hardware not both. The ResponseCard and ResponseWare are available from the bookstore or direct from There may also be used remotes available from other students. If you are purchasing this remote or the ResponseWare for another class, you do not need to purchase two. You may use the same remote and software in a number of classes. Course website: Go to and log in to Blackboard. Then go to Economics 100. Registering the remote classroom response device: Go to Log in to OAK. Go to Economics 100. Click on Course Tools. Click on TurningPoint Registration Tool. Enter your ResponseCard Device ID. (It is on the back of your remote. It will say Device ID.) Click Submit. You will then have registered your remote. If you are using ResponseWare, enter your ResponseWare ID. This course is an introduction to an economic way of thinking and analysis, the problems of unemployment, inflation, and economic growth, and the tools of monetary and fiscal policy. The goal of the course is to enable you to read articles in daily newspapers and business publications and view television and radio news programs, with a new ability to understand the content and evaluate the accuracy of the economic analysis. By the end of the course you should have developed an understanding of major economic institutions, the functioning of markets, and the challenges faced in using policy to influence the levels of unemployment, inflation, and economic growth. You will be able to build economic models that describe significant parts of our economic system and to apply those models to current and new events and problems. 1

2 There will be a few, but very few, definitions and concepts to memorize. The vast majority of the concepts covered in the course will require you to think through relationships and use the concepts to analyze problems, recommend solutions, and explain exactly how they might work. You will be asked to do simple algebra and use graphing techniques to summarize major concepts and relationships. If understanding and using graphs are difficult for you, read the appendix to chapter 2 and ask for additional help. However, the most important learning and the emphasis on the exams will be for you to explain economic analyses carefully and in a manner understandable to someone who has not had an economics course. The course will meet three times each week. Reading assignments will be made for each day. The discussions will be much more productive for you if the assignments are read, notes from the previous class are reviewed, and problems worked before each class. The pages identified by each date on the schedule below are to be read prior to the class on that date. Reading the assignments and working on the questions and problems as you come to them in the text are essential. Economics is not a discipline that can be learned the night before an exam. Following most reading assignments you will find recommendations to take a self-. The purpose of the self- is to provide you feedback and practice thinking through relevant concepts. The self-zes can be found on the course webpage. Additional readings and problem sets will be handed out in class and will be posted on the class webpage. Review sessions will be held at other times to answer questions and assist you in understanding particularly difficult parts of the course. Professor Buckles and the teaching assistants will be available during regular office hours and by appointment to discuss any parts of the course. Exams, Quizzes, and Papers Three times during the semester there will be one-hour exams on all of the material covered to that point in the course. The days of the exams are indicated on the attached schedule. There will be no make-up examinations. Please plan your fall schedule accordingly. If you must miss an exam, please talk to one of the teaching assistants during the first two weeks of the course. During eight of the weeks, there will be 15-minute weekly zes on material covered since the last or exam, including the reading assigned for the of the. All will be graded and returned to you quickly. Your best six weekly grades will be counted toward your course grade. 2

3 The weekly zes are given electronically. You will be able to take the zes between 2:00 on Thursdays and 2:00 on s. You will need to go to a computer lab in Garland or Stevenson to do so. Detailed instructions are at the end of the syllabus. Two one-page papers will be assigned during two of the weeks when zes and exams are not scheduled. Topics will be announced the week prior to the due dates. There will also be a final exam. Due Dates and Scheduled Quizzes and Exams This is a course in which we spend a great deal of time discussing choices. You will, in fact, have choices as to whether or not you take zes and exams or write the papers. If you choose not to take a or an exam or write a paper, a score of zero will be entered for that assignment. (A zero does serious damage to averages. The exception is for the dropped two grades. If you wish to skip a, that will be the score dropped.) Grading The three exams will make up 52 percent of the course grade. The first exam will be 15 percent; the second, 17 percent; and the third, 20 percent. The final examination will be twenty-five percent of the course grade. Improvement throughout the semester will be recognized and rewarded. The six highest grades on the zes plus the grades on the two papers will be twenty percent of the course grade. Class participation will also count. The number of questions that you have answered in class with the remote device will make up three percent of your course grade. Honor Code Vanderbilt s Honor Code will apply to all assignments in this course. You are strongly encouraged to study with your colleagues in the course and to discuss assignments, problems, upcoming zes, exams, and essays. However, when you take zes and exams and write essays, you are expected to do your own work. Books, notes, and the work of others are not to be used during exams and zes. You are expected to write your own answers. The papers are to be your own work. Significant sources, ideas, and quotations should be referenced in the papers. The weekly zes will be given electronically on Thursdays and s at a time of your choosing. Once you have taken the you are under the Honor Code not to discuss the content of the until such time that all students have taken the electronic. You should use only your own remote device to answer questions. Because remote use in answering questions contributes to a small 3

4 part of the course grade, using someone else s remote is a violation of the Honor Code. If you have questions about the Honor Code in Economics 100, please ask Professor Buckles - not another student or a teaching assistant - for clarification. Uncertainty about the application of the Honor Code does not excuse a violation. Course Website You may access the course website by logging on at OAK at the Vanderbilt website. Copies of the syllabus, sample exams, and the daily self-zes will be on the course website. Eventually, there will be case studies posted as they are assigned, revisions in the reading assignments, sample answers to the exams, paper topics, and a number of other items. Reading Assignments and Exam Schedule (The exam,, and essay schedule will not be changed. As we proceed through the course, current reading assignments will be added and the existing assignments may be changed. I recommend that you complete the reading assignment for each class before the class.) August 21, Introduction to the course August 23, Chapter 1. August 26, Monday August 28, August 30, September 2, Monday September 4, September 6, September 9, Monday September 11, September 13, September 16, Monday First Second Chapter 2 and Appendix to chapter 2. Chapter to to to to 4-50 and chap. 5, pp. 5-1 to 5-4. Chapter 5, pp. 5-4 to Chapter 5, pp to Chapter 6, pp. 6-1 to 6-9. Economics as a way of thinking Economics as a way of thinking and economic efficiency A description of an economy: GDP, unemployment, and inflation. Supply and demand the basics of demand. Supply and demand - the basics of supply. Supply and demand - equilibrium. First Exam Equilibrium and disequilibrium; price elasticity of demand and supply. Price ceilings and floors. Tariffs and quotas, taxes and subsidies, and other applications. Measuring success and failure Gross Domestic Product. 4

5 September 18, September 20, September 23, Monday September 25, September 27, September 30, Monday October 2, October 4, October 7, Monday October 9, October 11, Third Fourth Fifth Chapter 6, pp. 6-9 to 6-12 and 6-21 to Chapter 6, pp to Chapter 7. Chapter 9, pp. 9-1 to 9-7. Chapter 9, pp. 9-7 to Chapter 9, pp to Chapter 10, pp to Chapter 10, pp to Chapter 10, pp to Measuring success and failure unemployment and employment Measuring success and failure inflation and deflation. Economic growth the answer to everything. Spending in our economy - consumption. Spending in our economy investment and net exports. Government spending, an economy equilibrium, and the spending multiplier. Second Exam Fall Break Demand for the entire Supply for the entire Equilibrium for the entire October 14, Monday October 16, October 18, October 21, Monday October 23, October 25, October 28, Monday October 30, November 1, November 4, Monday November 6, Sixth First paper Seventh Chapter 11, pp to Chapter 11, pp to Chapter 8, pp. 8-1 to Chapter 8, pp to Chapter 12, pp to Chapter 12, pp to Case study on website. Chapter 12, pp to Chapter 13, pp to Chapter 13, pp to Chapter 13, pp to Inflation, recession, and stagflation. The self-correcting Money what it is and is not and money creation. Interest rates. Monetary policy and Ben Bernanke. Monetary policy and Ben Bernanke. New monetary policy tools. Why is monetary policy so difficult? Fiscal policy spending and tax changes. Current challenges with fiscal policy. Budget surpluses and deficits - costs and benefits. November 8, Third Exam 5

6 November 11, Monday November 13, November 15, November 18, Monday November 20, Eighth Case studies on course website. Case studies on course website Chapter 14, pp to Chapter 14, pp to Chapter 15, pp to Do you want to pay for the Afghanistan war, health care for your grandparents, social security for currently retired individuals, your own retirement, and an increase in disposable income for the richest 10 percent of the population? How to solve the budget problem. Comparative advantage the benefits of trade Comparative advantage the costs of trade Balances of payments and balances of trade. November 22, Second paper Chapter 16, pp to Exchange rates November 25 to 29 Thanksgiving break December 2, Monday December 4, Last Class Chapter 16, pp to Chapter 17, pp to Macroeconomic policy in a world What we know, what we think we know, and what we do not know. December 10, Tuesday Final exam, section 2, 9:00 to 11:00 December 13, Final exam, section 1, 9:00 to 11:00 6

7 Guidelines for Taking Weekly Quizzes Economics 100 Weekly zes may be taken at any time the Computer Labs in Garland and Stevenson are open, with no formal class in the labs, between 2:00 on Thursday and 1:00 on. (One is from 2:00 on a Tuesday to 1:00 on a.) Do not wait until the last minute as there is likely to be a line and you may not get access to a terminal. The exact hours of the computer labs will be announced in class. You will be allowed to enter a only once. By taking the under the Honor Code, you are agreeing to do your own work, without notes or text, and not to discuss the questions or answers with anyone after the and prior to s class. 1. When you sit at a PC terminal (Macs will not work), you should click on the Start menu. Click on All Programs. Click on Educational Programs. Scroll down. Click on Quizzer. You may have to click on zer again. You will then see Quiz login. Fill in your VUnet ID and password. Click on Login. When taking an actual, if you go beyond this point, you will be allowed to do so only once. Click on Economics 100. Be sure you select Economics 100, not Economics 101. Click on Accept the Honor Code. If you do not accept, you will not be allowed into the. Once you accept, you will automatically enter the and cannot reenter. 2. The will appear on the screen. You will have 15 minutes in which to complete the. There is a small clock on the screen. 3. Click on the best multiple-choice answers. Type in essay question answers, within appropriate spaces. You may edit or change any of your answers at any time before the 15-minute time period is over. 4. When you are finished, click Hand In. It will ask you a second time, if you want to Hand In the. If you are finished, click a second time. (If time runs out before you finish, your answers will automatically be saved.) 5. Once the zes are graded, an will be sent announcing the availability of the graded zes and the letter grade distribution. You may access and print your graded by going to *If you do not have a VUnet ID or an e-password, follow instructions at 7