Economics Department, LIU Post

ECO11 Introduction to Macroeconomics, Spring 2016

Section 1, Mondays and Wednesdays 9:30 pm – 10:50 pm, Humanities Hall HM226

Instructor: Udayan Roy

Course’s Description (from the Undergraduate Bulletin 2014—2015): This course discusses the

important economic theories and concepts that facilitate understanding economic events and

questions. Its main focus is on analyzing the behavior of important economic aggregates such as

national income, unemployment, inflation, interest rates, exchange rates, and economics growth. The

effects of the government’s monetary and fiscal policies on economic growth and inflation are also

examined.

Course Credits: This is a 3-credit course. The New York State Education Department (NYSED) requires

that for each credit hour there shall be at least 15 hours of instruction (of 50 minutes each) and at least

30 hours of supplementary assignments. Therefore, a 3-credit course shall meet for a minimum of 45

hours, each hour being 50 minutes, for a total of 2,250 minutes and require at least 90 hours of

supplementary assignments and readings outside of the lecture. You should expect to spend at least 45

hours on reading (3 hours a week) and 45 hours on homework assignments (3 hours a week). Therefore,

overall, you should expect to spend 135 hours on this course.

Prerequisites: Students must have successfully completed LIU Post’s Introduction to Microeconomics

(ECO10) course or another course considered equivalent by LIU Post’s economics department. Very

basic algebra skills are assumed. An ability to use graphs to represent links between variables would be

helpful. (The appendix to Chapter 2 of the course’s textbook provides a good review of graphing

concepts.)

Course’s Goals: This course is one of the two economics courses in LIU Post’s Core Curriculum.

According to the statement of the Core Curriculum’s goals in LIU Post’s Undergraduate Bulletin for 2014-

2015, “The Core Curriculum will:

1. Foster the continued development of critical and analytical skills

2. Increase the understanding and appreciation of areas of human knowledge

3. Develop an understanding of diverse modes of inquiry

4. Promote understanding of ethical and moral issues

5. Increase the ability to examine problems and issues from multiple perspectives

6. Develop the capacity to conduct independent research

7. Foster a capacity for lifelong learning.”

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Goals 1-3 and 5 are within the ambitions of this course. Specifically, I expect that in this course:

1. Students will acquire an understanding and applied knowledge of some of the core concepts

and analytical tools of economic theory. They will be able to apply and evaluate the core

concepts of economics such as the theory of supply and demand to everyday life and national

policy.

2. Students will acquire an understanding of the main measures of macroeconomic performance.

They will be able to explain the calculation of the basic macroeconomic measures such as GDP,

inflation, unemployment, money supply. They will also be able to explain the usefulness and

limitations of these macroeconomics measures.

3. Students will acquire the ability to utilize macroeconomic theory to analyze and evaluate

macroeconomic policy. Students should be able to identify the tools of fiscal policy and explain

their likely impact on the economy. Similarly, students should be able to identify the tools of

monetary policy and explain their impact on the economy.

Macroeconomics is typically the study of the behavior of economic variables that describe an entire

economy—such as the unemployment rate of Angola, the inflation rate of Brazil, the total income of

Canada, etc.

Our study of macroeconomics will consist of three broad parts. First, we will study how statisticians

measure important macroeconomic variables such as the total output of the economy, the

unemployment rate, and the price level. Second, we will look at macroeconomic theories that attempt

to explain the historical data. Finally, we will look at macroeconomic policy making. Chiefly, we will look

at what a country’s government and its central bank can do to stabilize an economy that is going

through a rough patch.

Notice that our approach to the economy resembles the approach of a doctor to a patient. The first

thing a doctor does is to take the patient’s pulse. This resembles an economist’s measurement of the

health of an economy. Next, the doctor tries to make a diagnosis of the patient’s situation. For this

purpose the doctor will use a theory of how the human body works. Similarly, economists use a theory

of how the economy works in order to make a diagnosis of the state of the economy. The last step for a

doctor is to recommend a treatment. Similarly, economists try to recommend

the best policy for a given economy.

Course’s Required Textbook: Brief Principles of Macroeconomics, Seventh

Edition, by N. Gregory Mankiw, Cengage Learning, Stamford, Connecticut, 2015,

ISBN 9781285165929. (Note: Either Principles of Macroeconomics (ISBN

9781285165912) or Principles of Economics (ISBN 9781285165875) by the same

author and from the same publisher would be a perfectly good substitute.

Moreover, the sixth—or even the fifth or the fourth—editions of either of the

above three books would do very well too.) If the publisher permits, a copy of

the textbook will be kept on reserve for you at the library’s circulation desk

throughout the semester.

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The textbook’s Table of Contents is given below, with the chapters that I wish to teach in boldface:

Part I: INTRODUCTION.

1. Ten Principles of Economics.

2. Thinking Like an Economist.

3. Interdependence and the Gains from Trade.

Part II: HOW MARKETS WORK.

4. The Market Forces of Supply and Demand.

PART VIII: THE DATA OF MACROECONOMICS.

5. Measuring a Nation’s Income.

6. Measuring the Cost of Living.

Part IX: THE REAL ECONOMY IN THE LONG RUN.

7. Production and Growth.

8. Saving, Investment, and the Financial System.

9. The Basic Tools of Finance.

10. Unemployment and Its Natural Rate.

Part X: MONEY AND PRICES IN THE LONG RUN.

11. The Monetary System.

12. Money Growth and Inflation.

Part XI: THE MACROECONOMICS OF OPEN ECONOMIES.

13. Open-Economy Macroeconomics: Basic Concepts.

14. A Macroeconomic Theory of the Open Economy.

Part XII: SHORT-RUN ECONOMIC FLUCTUATIONS.

15. Aggregate Demand and Aggregate Supply.

16. The Influence of Monetary and Fiscal Policy on Aggregate Demand.

17. The Short-Run Tradeoff between Inflation and Unemployment.

Part XIII: FINAL THOUGHTS.

18. Six Debates over Macroeconomic Policy.

Recommended Study Guide: Study Guide for Mankiw’s “Brief Principles of Macroeconomics” by David R.

Hakes, Cengage Learning, Stamford, Connecticut, 2015, ISBN: 9781285864266. This study guide is

recommended but not required. If the publisher permits, a copy of the study guide will be kept on

reserve for you at the library’s circulation desk throughout the semester.

Examinations and Grading: Your grade will be based on your performance in the Midterm, the Final,

some in-class quizzes, and some homework assignments. In preparing the course grade I will use the

following weights: 30% for the Final, 30% for the Midterm, 20% for the quizzes, and 20% for the

homework assignments. Using these weights, I will calculate each student’s overall percentage score.

The overall percentage scores will then be scaled—according to the procedure shown in the table

below—to yield each student’s letter grade.

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You are guaranteed the grade … if your overall percentage is in the range … or you are in the …

A 93.01 – 100 Top decile (10th)

A- 87.01 – 93 9th decile

B+ 82.01 – 87 8th decile

B 76.01 – 82 7th decile

B- 70.01 – 76 6th decile

C+ 65.01 – 70 5th decile

C 59.01 – 65 4th decile

C- 53.01 – 59 3rd decile

D 42.01 – 53 2nd decile

This is a rough guide to my grading procedure. I will use my discretion when this procedure gives an

ambiguous result (as, for example, when too many students get the exact same percentage score). But

when the above procedure gives an unambiguous grade, I will abide by it.

Midterm: The Midterm will be held on Monday, March 14. It will consist of multiple-choice and fill-in-

the-blanks questions on the material taught prior to the day of the test.

Final: The Final will be held during Finals Week (on Monday, May 2 or Wednesday, May 4). The Final will

be cumulative: that is, it will be based on all material taught in the course. However, most of my

questions will be based on the material not tested in the Midterm.

In-Class Quizzes: I will give approximately six short in-class quizzes—with adequate notice—throughout

the semester. I will count only your four highest quiz scores and these will have a collective weight of

20% in your course grade, as I said earlier.

Blackboard Homework Assignments: The homework assignments may consist of computer-graded

online quizzes within the Blackboard course management system. You will have to log on at

http://blackboard.liu.edu and then go to the Blackboard page for this course to find and complete the

online homework assignments. Use the firstname.lastname format as your username. The Blackboard

password is the same as your My.LIU password; see https://my.liu.edu/ for further details.

If you do not have a My.LIU password, please go to http://csi.liu.edu/myLIU/ for further instructions. If

you are still unable to log on to Blackboard, please contact the Center for Student Information. You could

email them at StudentCenter@LIU.edu or call them at 516 299 3967 or go to their offices on the main

floor of Hillwood Commons. In general, for all technology-related issues, please take a look at the Center

for Student Information web site http://csi.liu.edu. Specifically, please see

http://csi.liu.edu/blackboard/students.aspx for tutorials on the use of Blackboard.

Attendance Policy: The best possible grade (BPG) that you could get will depend

on the number of your absences; see the accompanying table for details. You will

be marked absent if you miss ten minutes or more of a lecture or if you are not

attentive in class. You must not sign the attendance sheet if you miss ten minutes

or more of the class. Signing another person’s name on the attendance sheet

amounts to forgery and will not be tolerated.

Absences BPG

6, 7 B+

8, 9 B

10, 11 B-

12, 13 C+

14+ D

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No make-up tests will be given for the Midterm or the Final unless there are compelling medical reasons

supported by a valid doctor’s note. In case you cannot take a test at the scheduled time, you (or

someone representing you) must inform me of the reason(s) not later than twenty-four hours after the

test. Ideally, I should be told before the test. The reason(s) you give for missing a test will affect my

decision on whether or not you should get a make-up test but it will not affect your BPG. No make-ups

will be given for the quizzes. Homework assignments completed late will not count.

General Classroom Decorum: Students must make sure that their actions have no adverse effects on the

ability of other students to learn and do their work. Students must behave honorably when taking

quizzes and tests and report dishonorable behavior to the instructor when they see such behavior.

When in the classroom, students must not engage in any activity that is not directly part of the course.

In particular, students must not use computers, phones, or other entertainment devices in the

classroom. Students who feel sleepy should leave the classroom and sleep elsewhere.

Students with Disabilities: The Americans with Disabilities Act (ADA) is a federal anti-discrimination

statute that provides comprehensive civil rights protection for person with disabilities Students with

special needs as addressed by the ADA who need assistance should contact The Learning Support

Center, located in the lower level of Post Hall (516-299-3164), immediately. Please meet with me early

in the semester if you require accommodations. I will make reasonable efforts to accommodate your

special needs.

For more information, please visit The Learning Support Center at

http://www.liu.edu/CWPost/StudentLife/Services/LSC.aspx. The Learning Support Center provides a full

range of support services, educational strategies, and opportunities to help student achieve their

personal, academic and vocational goals.

Course Calendar: The following is a tentative schedule for the course. I will do my best to stick to it.

Nevertheless, I expect to stray from this schedule on a regular basis.

Lecture Date Day ECO11 Section 1 Spring 2016

1 20-Jan Wed Introduction; Ch. 5 (Measuring a Nation's Income)

2 25-Jan Mon Ch. 5

3 27-Jan Wed Ch. 5

4 1-Feb Mon Ch. 6 (Measuring the Cost of Living); Add/Drop and Late Registration ends

5 3-Feb Wed Ch. 6

6 8-Feb Mon Ch. 7 (Production and Growth)

7 10-Feb Wed Ch. 7; No classes on Monday, Feb. 15; Monday classes on Tuesday, Feb. 16

8 16-Feb Tue Ch. 8 (Saving, Investment, and the Financial System)

9 17-Feb Wed Ch. 8

10 22-Feb Mon Ch. 8

11 24-Feb Wed Ch. 10 (Unemployment)

12 29-Feb Mon Ch. 10

13 2-Mar Wed Ch. 10 and midterm review; No classes on March 7 and 9 (Spring Recess)

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14 14-Mar Mon Midterm (tentative, Chs. 5 – 8, 10)

15 16-Mar Wed Ch. 11 (The Monetary System)

16 21-Mar Mon Ch. 11

17 23-Mar Wed Ch. 12 (Money Growth and Inflation)

18 28-Mar Mon Ch. 12

19 30-Mar Wed Ch. 13 (Open-Economy Macroeconomics); Last Day to Opt P/F or do a Partial Withdrawal is April 1

20 4-Apr Mon Ch. 13

21 6-Apr Wed Ch. 14 (A Macroeconomic Theory of the Open Economy)

22 11-Apr Mon Ch. 15 (Aggregate Demand and Aggregate Supply)

23 13-Apr Wed Ch. 15

24 18-Apr Mon Ch. 15

25 20-Apr Wed Ch. 16 (Influence of monetary and fiscal policy on aggregate demand)

26 25-Apr Mon Ch. 16; Last lecture; Last Day for Full Term Withdrawal is April 26

27-Apr Wed Review for Final; Study/Snow/Alternate Class Day

2-May Mon Final (tentative)

4-May Wed Final (tentative)

Contact Information: My office is at Room 206, Hoxie Hall (across from the Bookstore). My office phone

number is (516) 299 2405/2321. My e-mail address is uroy@liu.edu. My own Web site is at

http://myweb.liu.edu/~uroy/. My mailing address is: Udayan Roy, Economics Department, Long Island

University, Brookville, NY 11548.

Office Hours: My office hours are 12:30 pm – 1:45 pm on Mondays and Wednesdays and 3:30 pm – 5:00

pm on Mondays. For any other hours, a prior appointment will be necessary. Please stop by whenever

you need any help with your coursework. During my office hours, you may also contact me by Skype; my

Skype ID is udayan-eco.

Web Sites: The course’s Web site is at http://myweb.liu.edu/~uroy/eco11/. The Web site for this

course’s textbook is at

http://www.cengage.com/search/productOverview.do?Ntt=20163098961681082012122501894386078

2982&N=16+4294922239+4294966644&Ntk=P_EPI. It has a lot of material that might be of use to you.

Have a great semester!