CLO1. Explain macroeconomics, microeconomics and types of economic system. This topic begins with a discussion of the meaning and importance of economics. We first look at the economic perspective—how economists think about problems. Next, we examine the specific methods economists use to examine economic behaviour and the economy, including distinguishing between macroeconomics and microeconomics. We then look at the economizing problem from both an individual and societal perspective. Then this topic will look at the brief comparison of the command and market systems. Next, we look at the Five Fundamental Questions faced by every economy and explain how a market economy answers each one. A discussion of Adam Smith’s “invisible hand” leads into an explanation of why command systems have failed. The final part of the topic introduces the circular flow model as an overview of how resources and goods move through a market system.

CLO2. Compute GDP, unemployment and inflation rate. This topic acquaints students with the basic language of macroeconomics and national income accounting. GDP is defined and explained. Then, the differences between the expenditure and income approaches to determining GDP are discussed and analyzed in terms of their component parts. The income and expenditure approaches are developed gradually from the basic expenditure income identity, through tables and figures. The importance of investment is given considerable emphasis, including the nature of investment, the distinction between gross and net investment, the role of inventory changes, and the impact of net investment on economic growth. On the income side, non-income charges—consumption of fixed capital (depreciation) and taxes on production and imports—are covered. Other measures of economic activity are defined and discussed, with special emphasis on using price indexes. The purpose and procedure of deflating and inflating nominal GDP are carefully explained and illustrated. Finally, the shortcomings of current GDP measurement techniques are examined.

CLO2. Compute GDP, unemployment and inflation rate. This topic looks at the impact of economic growth in general. This topic also discusses the business cycle, unemployment, and inflation. While hinting at various business cycle theories, the authors stress the general belief that changes in aggregate spending, especially durable goods and investment spending, are the immediate cause of economic instability. Non-cyclical fluctuations are also treated briefly before the analysis of unemployment and inflation. In the section on unemployment, the various types of unemployment—frictional, structural, and cyclical—are described. Then the problems involved in measuring unemployment and in defining the full employment unemployment rate are considered. The economic and non-economic costs of unemployment are presented. Inflation is accorded a rather detailed treatment from both a cause and an effect perspective. Demand pull and cost push inflation are described. Considerable emphasis is placed on the fact that the re-distributive effects of inflation will differ, depending on whether inflation is anticipated or unanticipated.

CLO3. Demonstrate multiplier effect and its relationship with fiscal policy, and monetary policy. The central purpose of this topic is to introduce three basic macroeconomic relationships that will help us organize our thinking about macroeconomic theories and controversies: First, the focus is on the income-consumption and income-saving relationships. Second, the relationship between the interest rate and investment is examined. Finally, the multiplier concept is developed, relating changes in spending to changes in output.

CLO3. Demonstrate multiplier effect and its relationship with fiscal policy, and monetary policy. This topic introduces a variable-price model in which it is possible to simultaneously analyze changes in real GDP and the price level. What students learn in this topic will help organize their thoughts about equilibrium GDP, the price level, and government macroeconomic policies. The tools learned will be applied in later topics. The present topic introduces the concepts of aggregate demand and aggregate supply, explaining the shapes of the aggregate demand and aggregate supply curves and the forces causing them to shift. The equilibrium levels of prices and real GDP are considered. Finally, the topic analyzes the effects of shifts in the aggregate demand and/or aggregate supply curves on the price level and size of real GDP.

CLO3. Demonstrate multiplier effect and its relationship with fiscal policy, and monetary policy. This topic explores the tools of government stabilization policy in terms of the aggregate demand-aggregate (AD-AS) model. Next, the topic examines fiscal policy measures that automatically adjust government expenditures and tax revenues when the economy moves through the business cycle phases. The recent use and resurgence of fiscal policy as a tool are discussed, as are problems, criticism, and complications of fiscal policy.

CLO4. Show how international trade transactions are recorded and the use of exchange rate in the international trading. This topic introduces the student to the U.S. financial system. The topic first covers the nature and functions of money and then discusses the Federal Reserve System’s definition of the money supply. Next, the topic addresses the question of what “backs” money by looking at the value of money, money and prices, and the management of the money supply. Finally, there is a rather comprehensive description of the U.S. financial system, which focuses on the features and functions of the Federal Reserve System.

CLO4. Show how international trade transactions are recorded and the use of exchange rate in the international trading. The objectives and the mechanics of monetary policy are covered in this topic. It is organized around three major topics: (1) interest rate determination; (2) the balance sheet of the Federal Reserve Banks; (3) the tools of monetary policy.

This topic provides analysis of international trade and protectionism. First, it reviews important facts about world trade. Second, it examines how international specialization based on comparative advantage can mutually benefit participating nations. Third, the economic impact of trade barriers.

This topic addresses several important aspects of international trade. The topic begins with a brief discussion about the balance of payments. Next, this balance of payments is explained and examined in greater detail. Exchange rates and balance of payments adjustments under each exchange rate system are then analyzed. The section concludes with a discussion of the advantages and disadvantages of each.