Course ECO 2301–001: Principples of Macrooeconomics

Professor Ahmed Alzzahrani

Term Spring 20009
Meetings TR 11:30 a.m. - 12:45 p.m.,
p SOM2.7717

Professorr’s Contact Information

O
Office Phone 469-487-868 84
O
Other Phone 972-883-4913 (office)
fice Location Office Green
Offi n Hall, GR 2..802
Emmail Address asa061000@ @utdallas.eduu
Wednesdayss 11:30–12:455 p.m. and Frridays 5:30–6:45 p.m.
O
Office Hours
(or by appoiintment)
Please use my
m UTD emaail address foor communications, and please p feel freee to
Other Information
I
contact me about
a any conncerns you maay have relateed to this classs.
General Course
C Inforrmation
Pre-reqquisites, Co-
The course iss self-containedd, and does nott have any pre--requisites; how
wever some
requisiites, & other
knowledge off college level algebra is usefful.
restrictions
Principles off Macroeconom mics (3 semesster hours) Ann introduction to theories of the
determinationn of nationall production and income,, interest rates, inflation, and
unemploymennt. Other topiccs include bankking system, thhe balance of payments, economic
growth the material
m that covers the princiiples of econom mics that applyy to an econom my as
Course Description
a whole, particularly the genneral price level, output and income, and innterrelations am mong
sectors of thee economy. Thhe course placces particular emphasis
e on the
t determinannts of
aggregate dem mand and aggrregate supply, anda on monetaary and fiscal policy
p tools thaat can
be used to achhieve particulaar policy objecttives.
By the end off the semester, students are exxpected to learrn the following:
1) the language and terminoology of Macrooeconomics,
2) the basic methodology
m a models off Macroeconom
and mics and the application
a of these
t
models, and
3) problem-soolving skills.
Within this context,
c studennts are expected to understannd measuremennt concepts succh as
gross domesttic product, connsumption, invvestment, unem mployment, infflation, inflatioonary
gap, and receessionary gap. Students are alsoa expected tot demonstratee knowledge of o the
institutional structure
s of thee Federal Reseerve Bank and the monetary policy tools it uses
Learnin
ng Outcomes to stabilize economic
e fluctuuations and prromote long-teerm economic growth, as weell as
the tools of fiscal
f policy annd their impactts on income, employment,
e p
price level, defficits,
and interest rate.
r Basic understanding of foreign
f exchannge markets, baalance of paym ments,
effects of currrency, and apppreciation and depreciation onn a country’s imports
i and expports
are also expected.
For economiccs majors, thiss course will laay the foundattion for continuuation in advaanced
economic anaalysis. For majjors and non-m majors alike, thhis course will give you probblem-
solving and analytical
a skills that should prove
p useful inn various aspeccts of the everryday
decision-makking process and the ability a to form informedd opinions about a
macroeconom mic policies useed by the goveernment.
Requiired Texts &
Materials
Principle off Macroeconom
mics, by Casee, Fair, and Oster,
O 9th Editiion
Sugggested Texts, Study Guidee, Principle off Macroeconoomics,
R
Readings, & by Case, Faiir, and Oster, 9th Edition
Materials The Instant Economist, byb Pool and LaRoe
L
Lecture nottes will be seelf-containedd and sufficieently inclusivve for the coourse
Leecture Notes
materials
Book:"The Instant Econ
nomist" , call #13045.
Reserveed Materials
DVD: "The Standard Deeviants present: Macro Economics"
E c
call #DVD90
030.
Course Policies

95-100 A+ 80-84 B+ 65-69 C+ 50-54 D+ 0-39 Fail

Grading (credit)
Criteria 90-94 A 75-79 B 60-64 C 45-49 D
85-89 A- 70-74 B- 55-59 C- 40-44 D-

50% 6 Exams (only count best 5 * 10% each)

25% 6 Assignments (only count best 5 * 5% each)
Grade
15% Final Project, (Macroeconomic Report)
Distribution
10% Attendance
05% Extra Credit, (Short Essay)

Short Essay, (Five Pages) counts for 5% extra credits of final grade:
Extra Credit
“What Every Manger Needs to Know about Macroeconomics”
Attendance and Participation counts for 10% of final grade.
Some topics not covered in the textbook will be introduced in lectures and you will be held
responsible for them on exams. Moreover, experience tells me that students who miss class
do not perform well on exams. Lastly, students are responsible for being aware of any and all
announcements that are made in class.
Class Attendance
Good participation includes (but is not limited to) attending class, being prepared for class
& Participation
(i.e. doing the reading), attending office hours, making thoughtful comments or other positive
contributions to class.
Bad participation includes (but is not limited to) poor attendance, lack of preparation, not
allowing others to speak, text messaging, answering your cell phone, reading the newspaper,
using your laptop for purposes other than taking notes, sleeping.
Please note ahead the scheduled dates of the midterms and the final and make sure you can
attend the exams. Unless you have a very good reason for missing the exams, no make-up
exam will be given (If you miss one midterm and have no good reason for missing it, you
will be given a grade of zero for that midterm, and method two will be used to calculate your
final grade). The only acceptable reason for missing an exam is your own illness or other
family emergencies. If this applies, please make a xeroxed copy of the "Report of Absence
from Exam" form attached at the end of the online syllabus and fill it in and return it to me.
Make-up Exams You must also have a signed excuse from your physician in case of illness stating the nature
of your illness (a statement saying that you weren't feeling too well is NOT enough). Your
petition will be considered, but you must submit it as soon as you are back on campus. Any
delays will lead to your petition being turned down. If I accept your petition, a make-up exam
will be administered. Please note that the make-up exam may be entirely different from the
original exam. If you need to take the exam early or elsewhere, you must submit the petition
by the deadline given in class. If you miss the deadline, you will be assessed a 10% penalty.
It is your responsibility to take note of the deadline.
Deadlines for assignments are clearly stated in the syllabus, there are no exceptions. With
Late Work advance notice, students may take a comprehensive final exam to replace one exam grade. If
you miss more than one exam, you will receive a zero for the additional missed exam.
Assignments & Academic Calendar
Economic Foundations for Macroeconomics
Dates Topics Assignments
The Scope and Method of Economics and The Economic Problem
January 13 Ch.1 – Ch.2
Scarcity, Opportunity Cost, Marginal Analysis
Understand Graphs
January 15 Appendix
Variables, Relations, Plotting Graphs, Measuring the Slope
Demand, Supply and Market Equilibrium
January 20 Law of Demand, Law of Supply, Market Equilibrium, The Price System, Price Ch.3 – Ch.4
Floors and Ceilings and their Effects
Demand and Supply Applications and Elasticities
January 22 Economic Shifts and Movements, Factors Shifting Demand, Factors Shifting Ch.4 – Ch.5
Supply , Analyzing Supply and Demand Elasticities
January 27 Assignment (I) Review 5%
January 29 Exam (I), [Based on Assignment (I)] 10%

Macroeconomic Measures
Dates Topics Assignments
Introduction to Macroeconomics and Measuring National Output
Macroeconomic Concepts, The Circular Flow of Income, Measuring GDP, GDP
February 03 Ch.6
and National Welfare, National Income Accounting Formulas, Applying the
National Income Premises.
Inflation, and Unemployment
Measuring Inflation, The Three Main Price Indexes, Problems with Price Indexes,
February 05 The Meaning of Inflation , How Inflation Affects Real Income, The Economic Ch.7
Costs of Inflation, Measuring Unemployment, The Effect of Recession, The Types
of Costs of Unemployment
Long-Run Growth
February 10 Full-Employment Output, The Level of Current Output, Factors Affecting Growth, Ch.17
Labor productivity, Creation of Capital, Capital Markets, Savings and Investment
February 12 Assignment (II) Review 5%
February 17 Exam (II), [Based on Assignment (II)] 10%

Aggregate Demand and Aggregate Supply

Dates Topics Assignments
The Core of Macroeconomic Theory: Aggregate Demand and Supply
Aggregate Demand and Supply, Aggregate Demand, Aggregate Supply (Short
February 19
Run), The Effects of Shifts in Aggregate Demand and Supply, Aggregate Supply
(Long Run), How to Apply Aggregate Demand and Supply
Demand Side Macroeconomics: The Keynesian Model
Aggregate Demand in the Private Sector, Consumption Function, Investment
February 24 Function , Equilibrium in Aggregate Demand, Applying the Keynesian, Model, Ch.8
Shifts in Investment, Determinants of Consumption, Determinants of Investment,
Factors Shifting the Total Spending Curve, Plotting Aggregate Demand.
Supply Side Macroeconomics: The Classical Model
Aggregate Supply and Full Employment, Constructing the Aggregate Supply Curve
February 26 to Get to Full Employment, Long-Run Equilibrium, Recession to Full
Employment, Unemployment to Full Employment, The Effects of Employment on
the Spending Multiplier, The Natural Rate of Unemployment
March 03 Assignment (III) Review 5%
March 05 Exam (III), [Based on Assignment (III)] 10%
 Economic Policy
Dates Topics Assignments
Economic Policy: Fiscal Policy
The Government and Fiscal Policy, Government Spending and Taxation, Fiscal
March 10 Policy, ((a) Spending, ( b) Taxation), The Overall Effects of Spending and Ch.9
Taxation, Limits of an Active Fiscal Policy, The Effect on Aggregate Supply and
Demand, Budget Deficits
Economic Policy: Monetary Policy
Definition of Money, Money Measures,
March 12 Federal Bank Balance Sheet, Commercial Balance Sheet, Money Creation, Ch.10
a) Money Supply: and the Federal Reserve System
Controls the Money Supply
March 24 b) Money Demand: and the Equilibrium Interest Rate Ch.11
March 26 Assignment (IV) Review 10%
March 31 Exam (IV), [Based on Assignment (IV)] 10%

Money and Business Cycle

Dates Topics Assignments
Aggregate Demand, Aggregate Supply, and Equilibrium
Money Demand: The Quantity Theory of Money, The Long-Run Neutrality of
Money, Inflation Predicts, Hyperinflation, The Short-Run Effects of Money, The
April 2 Ch.12-Ch.13
Monetarist Model, Keynesian Model of the Short-Run Effects of Money, The
Long-Run Effects of Money Supply on Interest Rates, The Spending Multiplier and
Fiscal Policy, Bonds, Interest Rates and Prices, Keynesian vs. Monetarist Views.
Inflation –Unemployment Relation, The Labor Market, Causes of shifts in the
Short-Run Aggregate Supply Curve (AS), The Relationship between the AS Curve
March 7 and the Phillips Curve, The Business Cycle, unemployment , Inflation and the Ch.14
Phillips Curve, Recession and Recovery, Inflation at Full Employment and Policy.
Phillips and Data.
Rational-Expectations Macroeconomics : Business Cycle Models, Assumptions,
Results, Rational-Expectations Model, An Example of a Rational-Expectations
April 9 Model, Criticisms of Rational Expectations, Rational Expectations, Random Walk, Ch.18
and the Stock Market, Real Business Cycle Theory, Neo-Keynesian
Macroeconomics and Business Cycle Theory
April 14 Assignment (V) Review 5%
April 16 Exam (V), [Based on Assignment (V)] 10%

Open-Market Macroeconomics
Dates Topics Assignments
Open-Market Macroeconomics :(a) International Trade
Nation’s Benefit from Trade, Goods for National Trade, The Law of Comparative
April 21 Advantage, Graphical Analysis of Comparative Advantage, The Effect of Tariffs Ch.19
and Quotas, Trade and Unemployment Arguments for Tariffs, Factor Price
Equalization
Open-Market Macroeconomics: (b) International Finance:
World Trade, The Exchange Rate, The Demand and Supply of the Dollar, The
April 23 Market for Assets, Factors Affecting the Exchange Rate, Other Equations, Fixed Ch.20
Exchange Rates, Runs on Currencies and Capital Flight, Fiscal and Monetary
Policy in an Open Economy
Macroeconomics and Financial Market
Reading Real-time Economy: (Not in
included in the
The relationship between macroeconomic variables, stock market, fixed income
April 28 exam, but
securities, and currency exchange rate. Leading, lagging, and coincident economic needed for the
indicators. The Fed’s Beige, Green, and Blue books. Major scheduled economic report paper)
events and timed global economic reports
April 30 Assignment (VI) Review 5%
May 5 Exam (VI), [Based on Assignment (VI)] 10%
 Final Project (Open-Macroeconomic Report)
Dates Topics Assignments
Project Tutoring (The State of The World Economy GDPw)
Understanding Macroeconomic [Data],
Making Use of the Macroeconomic [Variables],
May 7
Economic Indicators and Forecasts
Useful Economic Reports
Writing an Up-to-date Report about the Current State of the World Economy
The Final Project Deadline (15 Pages):
“Economic Report of the Current State of the World Economy”
During the semester, students read about the current developments of the
national and world economy based on the following sources :
1) FRED data on macroeconomic variables,
Links: {http://research.stlouisfed.org/fred2/}
2) CB economic indicators,
Links: {http://www.conference-board.org/economics/bci/}
3) FOCUS weekly economic report,
May TBA Links: {http://www.bmonesbittburns.com/economics/} 15%
4) FED’s Beige Book.
Links: {http://www.federalreserve.gov/FOMC/BeigeBook/2009/}
5) Forecasts
Links: {http://www.forecasts.org/economic-indicator/index.htm}
6) News and Analysis
Links: {http://www.economy.com/dismal/?src=economy-hp}
At the end of the semester, students are expected to submit a short report
about the “state of the world economy” based on data, forecasts, and (similar)
reports available at the above sources.

1) Attend classes and ask questions to make sure you understand the lecture
2) Take clear notes and supplement your notes with your readings
3) Utilize the office hours
4) Make a study group for Assignments
5) Start discussing and preparing for the final report earlier
Suggestions
6) Make sure you do the assignments correctly, ask if you doubt your solution
7) Download and read the posted slides on WebCT
8) Read the assigned pages in the textbook
9) Read the first chapter of “The Instant Economist”, and
10) Don’t mess the opportunity of the extra credit

(These descriptions and timelines are subject to change at the discretion of the Professor)
(The distributed syllabus in class is a short version of the syllabus online)
(It is the student’s responsibility to read the official online version)
 Off-campus, out-of-state, and foreign instruction and activities are subject to state
Field Trip
law and University policies and procedures regarding travel and risk-related
Policies
activities. Information regarding these rules and regulations may be found at the
Off-Campus
website address http://www.utdallas.edu/BusinessAffairs/Travel_Risk_Activities.htm.
Instruction &
Additional information is available from the office of the school dean. Below is a
Course Activities
description of any travel and/or risk-related activity associated with this course.
Technical If you experience any problems with your UTD account you may send an email to:
Support assist@utdallas.edu or call the UTD Computer Helpdesk at 972-883-2911.
The University of Texas System and The University of Texas at Dallas have rules and
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information on student conduct and discipline is contained in the UTD printed
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procedures of recognized and established due process. Procedures are defined and
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Student Conduct University of Texas System, and in Title V, Rules on Student Services and Activities
and Discipline of the university’s Handbook of Operating Procedures. Copies of these rules and
regulations are available to students in the Office of the Dean of Students, where staff
members are available to assist students in interpreting the rules and regulations (SU
1.602, 972/883-6391) and online at
http://www.utdallas.edu/judicialaffairs/UTDJudicialAffairs-HOPV.html
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Academic
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Integrity
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Plagiarism, especially from the web, from portions of papers for other classes, and
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Withdrawal from
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Class
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the incomplete grade is changed automatically to a grade of F.
 The goal of Disability Services is to provide students with disabilities educational
opportunities equal to those of their non-disabled peers. Disability Services is located
in room 1.610 in the Student Union. Office hours are Monday and Thursday, 8:30
a.m. to 6:30 p.m.; Tuesday and Wednesday, 8:30 a.m. to 7:30 p.m.; and Friday, 8:30
a.m. to 5:30 p.m.
The contact information for the Office of Disability Services is:
The University of Texas at Dallas, SU 22
PO Box 830688
Richardson, Texas 75083-0688
(972) 883-2098 (voice or TTY)
disabilityservice@utdallas.edu
Disability If you anticipate issues related to the format or requirements of this course, please
Services meet with the Coordinator of Disability Services. The Coordinator is available to
discuss ways to ensure your full participation in the course. If you determine that
formal, disability-related accommodations are necessary, it is very important that
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reasonable accommodations. Disability Services can then plan how best to
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It is the student’s responsibility to notify his or her professors of the need for such an
accommodation. Disability Services provides students with letters to present to
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Individuals requiring special accommodation should contact the professor after class
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sponsor as soon as possible regarding the absence, preferably in advance of the
assignment. The student, so excused, will be allowed to take the exam or complete
the assignment within a reasonable time after the absence: a period equal to the length
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Religious Holy
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Days
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If a student or an instructor disagrees about the nature of the absence [i.e., for the
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executive officer or designee must take into account the legislative intent of TEC
51.911(b), and the student and instructor will abide by the decision of the chief
executive officer or designee.

(These descriptions and timelines are subject to change at the discretion of the Professor)
(The distributed syllabus in class is a short version of the syllabus online)
(It is the student’s responsibility to read the official online version)
 Report of Absence from Exam
Fill out completely, sign and return to the course instructor as soon as possible. Lateness
in turning in the form may affect the acceptance of your petition.
NAME_______________________________________________________________
PHONE________________ADDRESS_____________________________________
EMAIL ADDRESS_____________________________________________________
COURSE NUMBER AND SECTION______________________________________
DATE OF EXAM MISSED______________________________________________
Give specific reason(s) for your absence on the exam date. Give details such as dates of
illness, treatment, etc. and attach your physician's statement.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
READ CAREFULLY AND SIGN
I pledge that all the information contained on this form is true to my best knowledge. I
understand it is my responsibility to take this form to my professor as soon as possible. If
accepted, it is also my responsibility to set up a date for a make-up exam with my
professor before the semester is over. I understand that failure to complete any of the
above will make me ineligible for a make-up exam.
_______________________________ ______________
Signature Date