Edmonds Community College Macroeconomic Principles – ECON 202C

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Edmonds Community College
                 Macroeconomic Principles  ECON 202C - Winter 2011
                                   Online Course
                             Instructor: Andy Williams

Textbooks: Economics: Principles, Problems and Policies, 18th Edition, by
McConnell, Brue, Flynn is required. The textbook authors have made additional materials
available at their Online Learning Center at http://highered.mcgraw-
hill.com/sites/0073375691/student_view0/index.html.

Equipment and software: A calculator, paper and pencils will prove to be handy, as will
skills with word processing, spreadsheets and the internet. Students must have reliable
access to the internet throughout the course.

This is an online course and we will use Blackboard to communicate, for testing and for
submitting assignments. Students are expected to access Blackboard via the internet daily
and to participate actively in course discussions throughout the course.

You can find additional information at the EdCC Blackboard site at
http://blackboard.edcc.edu/.

Availability: The best way to reach me is via email at . You can
also reach me by phone at 425-640-1450. If you want to meet in person, you can find me in
my office in SNO #235. My office hours are Monday - Thursday: 10:30  11:30 a.m. You can
also find additional information on my web page at http://faculty.edcc.edu/andy.williams/

Prerequisites: Successful completion of Math 90, Intermediate Algebra, is a prerequisite for
this course. Successful completion of English 105 is also a prerequisite for this course.

This is a class that is delivered using the tools of the internet, as well as standard business
software, such as spreadsheets and word processors. You should be familiar with these tools
before taking this course. We will be using the Blackboard software for our virtual classroom.
Blackboard creates a complete online classroom on a Web site. Students need access to the
internet and a Web browser; no other online software is required. Complete instructions for
logging into Blackboard are located at the EdCC Online website. Also at that site are links to
various resources, plug-ins, and tips and tricks that you may find useful!

Accessibility: Students who require accommodation for special circumstances should
contact Services for Student Disabilities at http://ssd.edcc.edu/.

Course Objectives

Edmonds Community College has identified four abilities in which graduates must
demonstrate their proficiency. The following college-wide abilities and specific learning
outcomes are applied in ECON 202:

Critical Thinking Outcomes

    Observe, analyze, synthesize, apply and evaluate business information.
    Identify arguments, evaluate claims, and form conclusions based on standard business
     practices.
    Identify and analyze problems and options, then select and implement appropriate
     solutions, and evaluate outcomes appropriate to course content.
    Examine and evaluate personal thinking as well as the thought process and
     perspectives of others.

Communication Outcomes

    Prepare and present clear, concise, well-developed written communications in
     standard English with correct punctuation and spelling, using business-appropriate
     word processing formats and styles.
    Write clear organized short informational and argumentative reports using correct
     format and report writing principles.
    Use listening skills that positively enhance relationships in a business environment.

Quantitative Skills Outcomes

    Use mathematics to solve quantitative economics issues and problems.
    Calculate and explain the costs and benefits of economic choices encountered in
     business and society.
    Use personal computers and other tools most commonly used by business to obtain,
     store, organize and communicate quantitative business information.

Specific Course Outcomes for ECON 202

    Define `economics' and describe elements of economic perspectives. Identify
     economic policies and goals as accepted by society, and describe their
     interrelationships.
    Identify the economics problem, productive efficiency, allocative efficiency, and the
     production possibilities curve. Describe basic economic systems and the allocation of
     resources and products.
    Describe the role of households, business and government in the United States
     economy.
    Identify the basic components of federal finance, including expenditures and revenues.
    Describe the basic components of world trade, and identify current trends in the global
     economy.
    Identify the tools that governments have available to manage imports and exports.
    Define national income accounting and gross domestic product. Calculate gross
     domestic product based on the spending and income approach. Describe the
     relationship between gross domestic product and economic well-being.
    Define economic growth, inflation and unemployment. Identify their costs and causes.
     Explain how a market economy moves to equilibrium price and output level.
    Define and describe fiscal policies and their effects on the economy.
    Describe the structure of the U.S. banking system.
    Describe the functions of the Federal Reserve System and point out which role is the
     most important.
    Define and describe monetary policies and their effects on the economy.
    Describe the factors contributing to economic growth and how they relate to production
     possibilities analysis and long-run aggregate supply.
    Describe the obstacles to economic development, and their impact on income gaps
     and poverty.

                                      Course Schedule

Week One: 1/3  1/11
Limits, Alternatives and Choices
Learning Objectives:

      Define `economics' and describe elements of economic perspectives.
      Define theoretical economics and empirical economics, and describe their purposes.
      Define material wants, utility, the concept of scarcity and the factors of production.
      Identify the economics problem, productive efficiency, allocative efficiency, and the
       production possibilities curve.
      Define opportunity cost, and describe the law of increasing opportunity costs
      Define marginal cost, marginal benefit, and describe conditions at the optimal point on
       the production possibilities curve.
      Apply the concept of the production possibilities curve to current social issues.
      Describe the relationship between dependent and independent variables in a graph,
       define direct and inverse relationships as depicted in a graph, and determine the slope
       of a line on a graph.

The Market System and the Circular Flow
Learning Objectives:

    Define the basic components of a competitive market system
    Identify and describe the characteristics of modern economies, including the
     differences between command and market systems.
    Describe how the market system determines production goals, production methods
     and allocates resources.
    Describe the role of competition in a capitalistic economic system.
    Describe how a market system adjusts to changes.


Week Two: 1/12  1/18
Demand, Supply and Market Equilibrium
Learning Objectives:

    Define a market, and describe various types of market locations and participants.
    Define demand, describe the law of demand, and describe how various forces may
     shift the market demand curve.
    Define supply, describe the law of supply, and describe how various forces may shift
     the market supply curve.
    Define market equilibrium and the rationing function of prices.
    Describe the effects of changes in supply, demand and equilibrium prices and
     quantities.
    Describe the impacts of externally imposed prices and how they can result in product
     surpluses and shortages.
The U.S Economy: Private and Public Sectors
Learning Objectives

   Define, explain, and give relative importance of the five shares in the functional
    distribution of income.
   Define and explain the personal distribution of income, and state the relative shares
    going to the top 20 percent compared to the bottom 20 percent (or one fifth).
   Explain the terms, durable goods, nondurable goods, and services.
   Explain the difference between a plant, a firm, and an industry.
   Describe the different business combinations and legal forms of business.
   Describe the role of households, business and government in the U. S. economy.
   Identify the basic components of federal finance, including expenditures and revenues.

Week Three: 1/19  1/25
The United States in the Global Economy
Learning Objectives

   Describe the basic components of world trade, and identify current trends in the global
    economy.
   Describe the pattern of U.S exports and imports of goods and services since 1975 both
    in terms of percentage of GDP and absolute dollars.
   Define specialization and comparative advantage, and their effects on the global
    economy.
   Describe the characteristics and dynamics of the currency exchange markets.
   Identify the tools that governments have available to manage imports and exports.
   Describe the purposes of the GATT and the WTO and explain the criticisms of the
    WTO.
   Explain what a trade bloc or a free-trade zone means and identify regional trade blocs.
   Exam #1

Week Four: 1/26  2/1
An Introduction to Macroeconomics
Learning Objectives

   Understand the basic statistical tools and measures that economists use to analyze the
    economy.
   Differentiate between nominal GDP and Real GDP (Gross Domestic Product).
   Understand the basic concept of unemployment.
   Understand the basic measure of inflation.
   Explain modern economic growth.
   Understand, and define, the basic concepts of savings and investment.
   Differentiate between financial investment and economic investment.
   Understand the role of expectations and uncertainty in economic activity.
   Explain how unanticipated shocks to supply and demand affect the economy under fixed and
    flexible prices.
   Explain the role of inventories in the economy.
   Explain the difference between `sticky prices' and `flexible prices' and understand the
    basic evidence supporting the two concepts.
Measuring Domestic Output and National Income
Learning Objectives

    State the purposes of national income accounting.
    List the components of GDP in the output (expenditures) approach and in the income
     approach.
    Compute GDP using either the expenditure or income approach when given national income
     data.
    Differentiate between gross and net investment.
    Explain why changes in inventories are investments.
    Discuss the relationship between net investment and economic growth.
    Compute NDP, NI, PI, and DI when given relevant data.
    Describe the system represented by the circular flow in this chapter when given a copy of the
     diagram.
    Calculate a GDP price index using simple hypothetical data.
    Find real GDP by adjusting nominal GDP with use of a price index.
    List seven shortcomings of GDP as an index of social welfare.
    Explain what is meant by the underground economy and state its approximate size in the U.S.
     and how that compares to other nations.
    Give an estimate of actual 2007 (or later) U.S. GDP in trillions of dollars and be able to rank
     U.S. relative to a few other countries.

Week Five: 2/2 - 2/8
Economic Growth
Learning Objectives

      Define two measures of economic growth.
      Explain why growth is a desirable goal.
      Identify two main sources of growth.
      Explain and apply the "rule of 70."
      Give average long-term growth rates for U.S. and qualifications of raw data.
      Show economic growth using production possibilities analysis and aggregate
       demand-aggregate supply analysis.
      Describe the growth record of the U.S. economy since 1950, including two measures
       of its long-term growth rates.
      Identify six major factors that contributed to U.S. economic growth according to
       empirical studies.
      List three primary reasons for productivity acceleration in the United States since 1995.
      List five reasons for increasing returns during the period of productivity acceleration.
      Evaluate the potential for the productivity acceleration to be a permanent phenomenon.
      Identify and explain the arguments for and against economic growth.

Business Cycles, Unemployment and Inflation
Learning Objectives

    Explain what is meant by a business cycle.
    Describe the four phases of an idealized business cycle.
    Identify two types of non-cyclical fluctuations in business activity.
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