Economics 2301

Principles of Macroeconomics
Spring 2006

Instructor: Chetan Dave

Office: GR 3.412
Phone: (972) 883-2306
E-mail: cdave@utdallas.edu
Web: http://www.utdallas.edu/~cdave
Note: I will occasionally post class materials on the website listed above, please check this site
regularly after about the 2nd week of lectures.
Lecture Time and Location: T, 7pm-9:45pm, CB 1.108.
Office Hours: TWR 9:15am-11:00am and/or by appointment.
Textbook: Principles of Macroeconomics (7th ed., 2004) by K. E. Case and R. C. Fair.

Course Description

This is a principles course in macroeconomics. Macroeconomics is the study of aggregate em-

pirical regularities of economic variables. However, our understanding of the behavior of aggregate
variables such as GDP and unemployment is entirely a function of what we know about the economic
decisions faced by individual economic entities. Therefore, in this course we will build and analyze
together a model of aggregate economic behavior from what economists know about individual
behavior.
The main focus of this course will be on how entire economies behave, as witnessed by the
behavior of their macroeconomic variables such as interest rates, GDP, unemployment, aggregate
consumption etc. As we learn about economic models of aggregate behavior we will:

• Understand basic macroeconomic concepts such as economic growth and how government
policy affects economies.

• Understand how to use basic concepts and models to answer questions like what will happen
to interest rates if the Federal Reserve raises the money supply?

• Understand how current economic events at home and abroad affect aggregate economies.
The idea is that through our understanding of basic concepts and macroeconomic models we
will learn how to interpret and analyze economic news. I welcome class discussion on current
economic events and the theories we use to try and explain them, class participation goes a
long way in improving our understanding.

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Grading: There will be weekly homework assignments, as well as two midterm exams and a final
exam. They will count towards the final grade as follows.

Assignments 20%
Midterm # 1 20%
Midterm # 2 20%
Final 40%.

Assignments and Exams: The assignments will cover topics that I will cover in class as well as
the textbook readings. Because of limited class time, I cannot always cover all of the material in
the text, so I will expect that you read and revise all of the readings on your own. Also, I expect
you to read the assigned readings before class. Please note the following administrative details.

• You will receive credit for assignments if you hand in completed assignments on time.

• You are welcome to work in groups on the assignments provided that the groups consist of
no more than four individuals. Please be sure to write down the names of all group members
on the assignment. You are not permitted to work in groups for any of the exams.

• Both the midterm and final exams will cover all lectures, assigned readings and assignments.
All exams will be multiple choice.

• With written confirmation I will provide make-up examinations only due to an unforeseen
event, e.g. a medical emergency etc. University guidelines on academic integrity and the like
will be strictly enforced.

Exam Times and Dates: TBA

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 Course Outline

The following is a tentative schedule for the material we will cover. I will stay close to the
topics listed below. If you have any questions or trouble come and see me as soon as possible.
Regular attendance is a necessary condition in order for you to learn the material and do well, so
do not skip lectures. In addition any administrative or academic changes will be announced in the
lecture so attendance is strongly encouraged. You will be held responsible for all material covered
in lecture as well as the readings.

Week Topic Textbook Readings

1 Review of Supply and Demand Chapters 3 and 4
2 Introduction to Macroeconomics Chapter 5
3 Macroeconomic Measurement Chapter 6
4 Macroeconomic Concepts Chapter 7
5 Aggregate Expenditure Chapter 8
6 Fiscal Policy Chapter 9
7 Monetary Policy & Midterm Review Chapter 10
8 Midterm # 1 & Monetary Policy Chapter 10
9 Money and Interest rates Chapter 11
10 Money, Output and Inflation Chapters 12-13
11 Midterm # 2 & Money, Output and Inflation Chapters 12-13
12 Money, Output and Inflation Chapters 12-13
13 Unemployment and Inflation Chapter 14
14 Economic Growth Chapter 18

This outline represents a basic course plan that is subject to change. You are responsible for
any changes which are announced in lecture or posted on the website.