ECON 112 - WordPress.com · ECON 112 – INTRO TO ECONOMICS II Begg, ... (2009) Foundations of Macroeconomics, (4th Edition), ... ECON 112- INTRODUCTION TO ECONOMICS II

ECON 112 INTRODUCTION TO

ECONOMICS II

STUDY GUIDE For Undergraduates Level 100

2014/15 – 2016/17 Academic Year

Dr. Monica P. Lambon-Quayefio, Department of Economics Dr. Nkechi S. Owoo, Department of Economics Dr. William Bekoe, Department of Economics

Acknowledgements Many thanks to Mr. Nicholas Kwame Essah, the Teaching Assistant who played a critical role in the development and editing of this study guide and the development of the course slides and presentation of the course module on the University of Ghana Sakai Learning Management System.

ECON 112- INTRODUCTION TO ECONOMICS II - STUDY GUIDE 2015 Page 2 of 16

STUDY GUIDE ECON 112 – INTRO TO ECONOMICS II

CONTENTS

COURSE DESCRIPTION .............................................................................................................. 5

1. COURSE WEBSITE ............................................................................................................ 5

2. INSTRUCTORS ................................................................................................................. 5

3. Support Contact Information ........................................................................................... 5

5. PROBLEM-BASED LEARNING APPROACH ...................................................................... 6

7. LEARNING OUTCOMES ................................................................................................... 7

7.1 KNOWLEDGE ......................................................................................................................... 7 7.2 SKILLS ....................................................................................................................................... 7 7.3 COMPETENCE ......................................................................................................................... 7

8. ASSESSMENT ................................................................................................................... 8

8.1 Trial Questions ........................................................................................................................ 8 8.2 Interim Assessment.................................................................................................................. 8 8.3 Final Exam: .............................................................................................................................. 8

9. RECOMMENDED TEXT .................................................................................................... 8

DETAILED CLASS SCHEDULE .................................................................................................... 10

10. SCHEDULE OF SESSIONS ............................................................................................... 10

11. SESSION 0 – INTRODUCTION TO ECON 112 ............................................................... 10

11.1 Overview ........................................................................................................................... 10 11.2 Goals and Objectives ..................................................................................................... 10 11.3 Activities and Assignments .............................................................................................. 10

12. SESSION 1 – INTRODUCTION TO MACROECONOMICS ............................................... 11


13. SESSION 2 – NATIONAL INCOME ACCOUNTING – PART ONE ................................... 11

13.1 Overview ........................................................................................................................... 11 13.2 Goals and Objectives ..................................................................................................... 11



13.3 Activities and Assignments .............................................................................................. 11

14. SESSION 3 – NATIONAL INCOME ACCOUNTING – PART TWO ................................... 11


15. SESSION 4 – NATIONAL INCOME ACCOUNTING – PART THREE ................................ 12


16. SESSION 5 – MEASUREMENT OF OTHER MACROECONOMIC VARIABLES - PART

ONE ...................................................................................................................................... 13


17. SESSION 6 – MEASUREMENT OF OTHER MACROECONOMIC VARIABLES – PART

TWO ..................................................................................................................................... 13


18. SESSION 7– ECONOMIC GROWTH ............................................................................... 14


19. SESSION 8 – THE BALANCE OF PAYMENTS AND THE EXCHANGE RATE – PART

ONE ...................................................................................................................................... 14


20. SESSION 9 – THE BALANCE OF PAYMENTS AND THE EXCHANGE RATE – PART

TWO ..................................................................................................................................... 15

20.1 Overview ........................................................................................................................... 15



20.2 Goals and Objectives ..................................................................................................... 15 20.3 Activities and Assignments .............................................................................................. 15

21. SESSION 10 – MONEY AND THE FINANCIAL SYSTEM-PART ONE ............................... 15


22. SESSION 11 – MONEY AND THE FINANCIAL SYSTEM-PART TWO ............................... 16




COURSE DESCRIPTION

1. COURSE WEBSITE

http://sakai.ug.edu.gh/XXXXXXXXXXX

2. INSTRUCTORS

Dr. Monica Lambon-Quayefio* Department of Economics, University of Ghana P. O. Box LG 57 Legon, Accra Email: [email protected] Office: EPM Building, 3rd Floor

Dr. Nkechi S. Owoo Department of Economics, University of Ghana P. O. Box LG 57 Legon, Accra Email: [email protected]

Office: EMP Building, 3rd Floor Dr. William Bekoe Department of Economics University of Gana P.O.Box LG 57 Legon, Accra

Email: [email protected] Office: EMP Building, 3rd Floor

Dr. Monica Lambon-Quayefio is the corresponding instructor.

3. Support Contact Information

School of Continuing and Distance Education University of Ghana P. O. Box XXXXXXX Legon, Accra Phone: XXXXXXXXX Email: XXXXXXXXXXXX

mailto:[email protected]





4. OVERVIEW

The general objective of this course is to introduce students to the basic principles in Macroeconomics- which studies aggregate economic phenomenon such as total output in an economy (rather than the output of an individual firm), general price level of goods and services in the economy (rather than the price of an individual good or service produced by a particular firm). The specific objectives are:

• to ensure that students are able to define macroeconomics and describe the important macroeconomic goals

• to ensure that students are able to describe the national output concepts, their measurements and their limitations.

• to ensure that students are able to describe how inflation is measured using the Consumer Price Index (CPI)

• to ensure that students are able to describe the different types of unemployment, their determinants and consequences

• to ensure that students are able to define economic growth and describe its determinants.

• To ensure that students are able to describe the structure of balance of payments and the different exchange rate regimes.

• to ensure that students are able to define money and describe the functions of the central bank .

5. PROBLEM-BASED LEARNING APPROACH

Problem-based learning (PBL) is a student-centered pedagogy in which students learn about a subject through the experience of problem solving. The goals of PBL are to help the students develop flexible knowledge, effective problem solving skills, self-directed learning, effective collaboration skills and intrinsic motivation. This course will use a problem-based learning approach. Working in groups, students identify what they already know, what they need to know, and how and where to access new information that may lead to resolution of the problem. The role of the instructor/lecturer/tutor is to facilitate learning by supporting, guiding, and monitoring the learning process. The tutor will help build students' confidence to take on the problem, and encourage the students, while also stretching their understanding.

6. COURSE FORMAT

The course content will be delivered online through the SAKAI Learning Management System (Sakai LMS). The Sakai LMS will be used to deliver

• Video Lecture Sessions • Session Slides • Session Reading Materials • Assessments – Tests, Quizzes and Assignments



Announcements will be posted to the course website and/email accordingly. It is the responsibility of students to check on announcements made in class, on the Course Website, and through email.

7. LEARNING OUTCOMES

The learning outcomes for the course are outlined along three strands: knowledge, skills and outcomes.

7.1 KNOWLEDGE

Students must have knowledge on 1. Understanding of basic economics terms and concepts 2. Components of economic units 3. Interpretation and manipulation of economic graphs 4. Interpretation and manipulation of economic data 5. Application of simple economic models

7.2 SKILLS

Students must be able to 1. Identify appropriate economic variables. 2. Understand appropriate tools that are used to analyse microeconomics issues in an

economy. 3. Use and apply theoretical models

7.3 COMPETENCE

Students should in the future be able to 1. Understand and appreciate the complex interaction that exists among economic

agents in the economy as a whole. 2. Describe and analyse the main goals of macroeconomic policy. 3. Compute macroeconomic concepts using appropriate techniques 4. Make use of appropriate indicators in assessing the performance of an economy. 5. Interpret macroeconomic data on key indicators of the economy



8. ASSESSMENT

The assessment for this course has been designed to help all students to maximize their individual and group/team learning opportunities. A summary of the assessment tasks is provided below.

ITEM FORM OF ASSESSMENT DELIVERED MARKS

Trial Questions- Self Assessment

Multiple Choice Questions and Short Answer Questions

After each session

Does not count towards final grade

Continuous Assessment

Multiple Choice Questions (MCQs) Short Answer Questions

Students to be Notified

30%

Written Examination

Semester Examination End of semester

70%

Total 100%

8.1 Trial Questions

Trial questions will be provided after each session to enable students enhance their understanding of issues discussed. These questions may be in the form of multiple choice questions and short answer questions. Although students will not be assessed on these trial questions, they are encouraged to take them seriously as these will give them a deeper understanding of each session.

8.2 Interim Assessment

Students will be assessed on the topics covered in the first 6 sessions of the course. The assessment will solely be on the Sakai platform and will take the form of multiple choices questions and short answer questions. As indicated earlier, the exact date for the exam will be communicated to students in the course of the semester. Once the date is fixed, students will be given a time frame within which they would have to log onto Sakai to take the test. The test will no longer be available to students once the deadline passes. Students are therefore urged to take note of the deadline for the test. Also, for short answer questions, students are encouraged to read over their responses to correct any typos or other mistakes that are likely to affect the quality of their responses before they submit finally.

8.3 Final Exam:

As indicated above, the final exam will take 70% of the final grade and will cover the entire course content. The format of the exam will communicated to students during the revision week.

9. RECOMMENDED TEXT

Although the topics treated in this course may be found in many good introductory macroeconomics texts, students may find the following basic text books very useful in enhancing their understanding of the course content:



Begg, D., S. Fischer, and R. Dornbusch (2002), Economics, McGraw-Hill Book Co., UK

Bade,R. and Parkin,M. (2009) Foundations of Macroeconomics, (4th Edition), Pearson - Addison Wesley

Hall R.E. and Lieberman M. (2008), Economics: Principles and Applications (4th Edition), Thomson/South Western

Lipsey, R.G. and K. A. Chrystal (2004), Economics (10th Edition), Oxford University Press

Mankiw, G. M. (2012), Principles of Macroeconomics (6th Edition), South Western



DETAILED CLASS SCHEDULE The course is organized into 6 SESSIONS along the following lines: (1) Overview; (2) Goals and Objectives; and (3) Activities and Assignments.

10. SCHEDULE OF SESSIONS

Week Session

1 Sessions 0 and 1

2 Session 2

3 Session 3

4 Session 4

5 Session 5

6 Session 6

7 Interim Assessment

8 Session 7

9 Session 8

10 Session 9

11 Session 10

12 Session 11

11. SESSION 0 – INTRODUCTION TO ECON 112

11.1 Overview

This course introduces students to the basic principles in Macroeconomics- which studies aggregate economic phenomenon such as total output in an economy (rather than the output of an individual firm), general price level of goods and services in the economy (rather than the price of an individual good or service produced by a particular firm) among other important variables.

11.2 Goals and Objectives

At the end of the session, the student will 1. Become familiar with the major macroeconomic goals. 2. Become familiar with the tools in the Sakai LMS to be used in the course.

11.3 Activities and Assignments

This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Explore the online tools available for this course in Sakai.

http://sakai.ug.edu.gh/XXXXXXXXX



12. SESSION 1 – INTRODUCTION TO MACROECONOMICS

12.1 Overview

Macroeconomics is one of the major aspects of Economics which focuses on aggregate economic units. This session seeks to introduce students to this broad aspect of economics and explain the main difference between Microeconomics and Macroeconomics.


At the end of the session, the student will 1. Be able to define Macroeconomics and explain the difference between

Microeconomics and Macroeconomics. 2. Be able to explain the main goals of macroeconomic policy.


This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Sessions 0 and 1 – Intro to Econ 112 and Macroeconomics 3. Read the relevant Chapters at the end of Lecture Slides 4. Attempt the Trial Questions for Session 1

13. SESSION 2 – NATIONAL INCOME ACCOUNTING – PART ONE

13.1 Overview

This session introduces students to one of the very important statistics that economists use to monitor the performance of an economy- Gross Domestic Product (GDP)/ National Income. This session provides students with an understanding of the various measurements and components of Gross Domestic Product.


At the end of the session, the student will 1. Identify and describe the components of national income/GDP 2. Be able to describe the three main approaches to national income accounting


This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 2 – Part One 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 2

14. SESSION 3 – NATIONAL INCOME ACCOUNTING – PART TWO

14.1 Overview

After learning about the measures of national income, we have to be able to interpret what these measures mean. This session provides an understanding into the interpretation economists



give to these measures. It also introduces students to very useful concepts that are employed in analyzing the performance of an economy.


At the end of the session, the student will 1. Be able to define and provide interpretation of the concepts used in national income

measures. 2. Be able to clearly differentiate between Gross Domestic Product and Gross National

Product 3. Be able to explain the difference between Gross Domestic Product and Net Domestic

Product as used in the national income accounting. 4. Be able to distinguish between market prices and factor cost 5. Be able to distinguish between Nominal GDP and Real GDP 6. Be able to Apply the GDP Deflator in computing Real GDP 7. Be able to explain why national income and national output are the same, using the

circular flow of income and output


This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 2 – Part Two 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 2- Part Two

15. SESSION 4 – NATIONAL INCOME ACCOUNTING – PART THREE

15.1 Overview

This session describes the importance of measuring national income as well as the limitations associated with using this measure in assessing the general well-being of an economy.


At the end of the session, the student will 1. Be able to describe the uses of the national income statistics 2. Be able to discuss the limitations associated with using the national income as a

measure of wellbeing


This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 2 – Part Three 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 2- Part Three



16. SESSION 5 – MEASUREMENT OF OTHER MACROECONOMIC VARIABLES - PART ONE

16.1 Overview

Apart from the national income, there are other important macroeconomic variables that may affect the overall performance of an economy. This session focuses on one of them- Inflation which describes the general price level of goods and services within the economy. This session throws more light on its measurement and how the consumer prices index is constructed and employed in adjusting the national income for inflation.


At the end of the session, the student will 1. Be able to describe how inflation is measured 2. Be able to describe the components of the Consumer Price Index (CPI) 3. Distinguish between the different types of inflation 4. Describe the causes of inflation 5. Describe the consequences of inflation in an economy


This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 3 – Part One 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 3- Part One

17. SESSION 6 – MEASUREMENT OF OTHER MACROECONOMIC VARIABLES – PART TWO

17.1 Overview

This session provides insight into unemployment which is another key macroeconomic variable that attracts the attention of many economies. Specifically, the session deals with the concept of unemployment, types, causes and consequences of the unemployment. Again, interest rate is recognized as another key macroeconomic variable will be covered in this session. The subject of interest rate will focus on the types and effect of interest rate on business in an economy.


At the end of the session, the student will 1. Be able to define unemployment and compute the unemployment rate 2. Be able to describe the various types of unemployment and identify their causes 3. Be able to discuss the effects of unemployment in an economy 4. Be able to distinguish between nominal interest rate and real interest rate 5. Be able to discuss the effect of interest rate on businesses in an economy


This week, complete the following tasks:



1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 3 – Part One 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 3- Part Two

18. SESSION 7– ECONOMIC GROWTH

18.1 Overview

In addition to unemployment and inflation discussed in the previous sessions, economic growth is another important parameter that has been used to gauge the economic performance of an economy. In most cases, this variable has been used to as the main criteria in classifying countries as under-developed, developing or developed. This session seeks to explain what economic growth means and identify the sources or determinants of economic growth.


At the end of the session, the student will 1. Be able to define economic growth 2. Be able to define and distinguish between actual GDP, Potential GDP and GDP gap 3. Be able to explain how growth in potential GDP affects economic growth 4. Be able to identify the sources or determinants of economic growth 5. Be able to explain the benefits and costs of economic growth


This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 4 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 4

19. SESSION 8 – THE BALANCE OF PAYMENTS AND THE EXCHANGE RATE – PART ONE

19.1 Overview

Exchange rate is one of the key macroeconomic indicators that have attracted global attention especially in more recent times due to its obvious effect in an economy. Just as commodities have prices so also does foreign currencies have prices. The session highlights the exchange rate and its determination in an economy.


At the end of the session, the student will 8. Be able to define an exchange rate. 9. Be able to distinguish between exchange rate depreciation and appreciation 10. Be able to distinguish between fixed and flexible exchange rate regimes.



11. Be able to compute equilibrium exchange rate and graph the results. 12. Be able to explain the key factors that affect the exchange rate.


This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 5- Part One 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 5- Part One

20. SESSION 9 – THE BALANCE OF PAYMENTS AND THE EXCHANGE RATE – PART TWO

20.1 Overview

Balance of payment is an important economic goal in every economy due to its implications on the exchange rate. The session highlights the components of balance of payments, disequilibrium of balance of payments and correction of balance of payments deficit.


At the end of the session, the student will 1. Define balance of payments 2. Distinguish between the current account and capital account of balance of payments 3. Analyze the basic structure of balance of payments 4. Differentiate between balance of payment deficit and surplus. 5. Explain how balance of payment deficit can be financed and corrected.


This week, complete the following tasks:

1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 5- Part Two 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 5- Part Two

21. SESSION 10 – MONEY AND THE FINANCIAL SYSTEM-PART ONE

21.1 Overview

Money is an important item in every society which is well-recognized. This session focuses on introduction to money which is used by every citizen in an economy for various purposes. The session essentially deals with the evolution of money, qualities of good money as well as the functions of money in an economy.


At the end of the session, the student will



1. Be able to explain the barter system of trade. 2. Be able to define money 3. Be able to outline the qualities of good money. 4. Be able to describe the functions of money in the economy. 5. Examine how the ability of money to perform its function can be affected by high

inflation.


This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 6- Part One 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 6- Part One

22. SESSION 11 – MONEY AND THE FINANCIAL SYSTEM-PART TWO

22.1 Overview

This session focuses on the financial system which is crucial in the study of macroeconomics. Specific areas to be covered in this session include; the hierarchical structure of the financial systems as well as the role of the central and commercial banks in an economy.


At the end of the session, the student will 1. Be able to distinguish between central bank and commercial bank. 2. Be able describe the functions of commercial bank. 3. Be able to describe the functions of central bank.


This week, complete the following tasks: 1. Log onto the UG Sakai LMS course site: http://sakai.ug.edu.gh/XXXXXXXXX 2. Review Lecture Slides: Session 6- Part Two 3. Read the relevant chapters provided at the end of the Lecture Slides 4. Attempt Trial Questions for Session 6- Part Two

Documents

ECON 112 - WordPress.com · ECON 112 – INTRO TO ECONOMICS II Begg, ... (2009) Foundations of Macroeconomics, (4th Edition), ... ECON 112- INTRODUCTION TO ECONOMICS II