Principles of Macroeconomics Course Structure

BASIC ECONOMIC CONCEPTS: 8-12%

• Scarcity, choice, and opportunity costs
• Production possibilities curve
• Comparative advantage, specialization, and exchange
• Demand, supply, and market equilibrium

MEASUREMENT of ECONOMIC PERFORMANCE: 12-16%

National income accounts:

• Circular flow
• Gross domestic product
• Components of gross domestic product
• Real versus nominal gross domestic product

Inflation measurement and adjustment:

• Price indices
• Nominal and real values
• Demand-pull versus cost-push inflation
• Costs of inflation

Unemployment:

• Definition and measurement
• Types of unemployment
• Natural rate of unemployment

NATIONAL INCOME and PRICE DETERMINATION: 15-20%

Aggregate demand:

• Determinants of aggregate demand
• Multiplier and crowding-out effects

Aggregate supply:

• Short-run and long-run analyses
• Sticky versus flexible wages and prices
• Determinants of aggregate supply

Macroeconomic equilibrium:

• Real output and price level
• Short and long run
• Actual versus full-employment output
• Business cycle and economic fluctuations

FINANCIAL SECTOR: 15-20%

Money, banking, and financial markets:

• Definition of financial assets: money, stocks, bonds
• Time value of money: present and future values
• Measures of money supply
• Banks and creation of money
• Money demand
• Money market
• Loanable funds market

Central bank and control of the money supply:

• Tools of central bank policy
• Quantity theory of money
• Real versus nominal interest rates

INFLATION, UNEMPLOYMENT and STABILIZATION POLICIES: 20-25%

Fiscal and monetary policies:

• Demand-side effects
• Supply-side effects
• Policy mix
• Government deficits and debt

Inflation and unemployment:

• The Phillips curve: short run versus long run
• Role of expectations

ECONOMIC GROWTH and PRODUCTIVITY: 5-10%

• Investment in human capital
• Investment in physical capital
• Research and development, and technological progress
• Growth policy

OPEN ECONOMY: INTERNATIONAL TRADE and FINANCE: 9-13%

Balance of payments accounts:

• Balance of trade
• Current account
• Financial account (formerly called capital account)

Foreign exchange market:

• Demand for and supply of foreign exchange
• Exchange rate determination
• Currency appreciation and depreciation
• Exchange rate policies

Inflows, outflows and restrictions:

• Net exports and capital flows
• Links to financial and goods markets
• Tariffs and quotas