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ECONOMICS 102 BB

Boston University Principles of Macroeconomics Fall 2017

Class Time : Tuesdays and Thursdays 3:30 4:45 p.m.


Room : LAW Auditorium

Instructor : Andre Switala


Office : Economics Department, Room 434
Office Hours : Tuesdays 2:00 3:00 p.m., Thursdays 9:00 10:30 a.m. or by appointment
Phone : Office: (617) 358-2604, Cell: (401) 215-4469 (incl. Text or iMessage)
Email : switala@bu.edu (preferred)

Course Description

Economics is the study of how individuals, firms and a society as a whole manage scarce resources.
This scarcity is the underlying problem we face in many of our decisions and the sometimes difficult
economic times of the recent years have made this especially apparent.

Macroeconomics is the part of Economics that studies the economy as a whole, while often abstracting
from the underlying decisions of individual households and firms. Instead we ask many of the
questions that are frequently discussed in newspapers, on TV and also in political debates. Will
government debt continue to increase and are tax increases necessary to pay it off? What can the
government or the central bank do to support the economy and should they? What is the central bank,
specifically the Federal Reserve Bank and why do we have it? Should we worry about rising prices or
declining prices? How does China affect our economy today?

These are some of the questions we will raise and discuss in this course. To lay a solid foundation we
need to understand how we measure the success and failure of an economy. What does Gross
Domestic Product or short, GDP, represent? What is inflation? Who is counted as unemployed and
who is not? As you will find out, measuring the economy is not easy and many of the measures we use
are not perfect. When the economy is growing, that is when we as a country produce more goods and
services, are things always getting better?

This course will focus on the very fundamental questions about functioning of most economies around
the world. We will emphasize the differences between outcomes over the short term (less than two
years) and the path of the economy over the long term (within a decade or over several decades). We
will learn what policy makers can do and cannot do to help the economy get out of a crisis. In addition
we look at issues such as the role of the banking system and the advantages and disadvantages of
trading with other countries. This course will provide you with a solid understanding of the economy,
help you understand different views of different political parties and allow you to evaluate the short
and long-term effects of proposed and implemented policies.
Required Textbook and Subscription:

Principles of Macroeconomics 8th ed. by N. Gregory Mankiw, Cengage Learning, South-Western


2018, bundled with MindTap

Note: You may sign up for MindTap for a grace period of about two we eks before payment is
required. During those two weeks you should decide how to pay for the access:
The bookstore should have access cards for MindTap + ebook or a bundle that has a physical
loose-leaf textbook with access card. You only need one of them, not both.
You may also pay directly online for the MindTap + ebook option using any debit or credit
card.
MindTap is required for completing your homework assignments! If you have a used textbook
you will still need to purchase access to MindTap! Be aware books that are sold as used with
MindTap may NOT work if the access code of the book has already been used.

You will also be responsible for those topics discussed in class which are not in the book. Additional
readings may be provided throughout the semester.

You will also be required to purchase access to TopHat. TopHat is one of the tools that allows for in-
class participation. While this is an additional cost I opted to include it for your benefit. TopHat in part
gives you immediate feedback about whether you understand the material or not. You will receive an
invitation to TopHat at a later date, so dont sign up until I give the go ahead.

I also recommend that you read newspapers such as the Financial Times or the Wall Street Journal to
see what is happening in the economy. The Financial Times is offered as free online access for BU
students. The WSJ has a great offer for students that I highly recommend 1$ per week for print and
digital. Subscription is NOT required, but if you are interested go to http://www.wsj.com/studentoffer
If you are asked if you were referred by a professor please choose my name in the drop-down menu.

Aims and Objectives

The aims of the course are:


gain a fundamental understanding of Economics, some of its underlying principles and its
applications
to learn how to use the studied models as a set of tools which allow us to understand real world
economic phenomena and how to evaluate them
to think critically about and possibly reassess preexisting convictions about how the economy
works and what role the government plays in setting economic policies

At the end of this course, students should be able to:


use economic terms correctly when talking about economic events
understand how markets work
distinguish between real and nominal economic variables
understand the models AND the economic intuition behind them
evaluate government policies based on their effects on the economic variables
explain the differences between closed and open economies.
Course Website

A course website is provided through BU learn. On this website I will post

this syllabus
any announcements pertaining to the course
a link to MindTap for online problem sets
a link to TopHat for in-class participation
sample exams and exam solutions
lecture slides or notes (if not available through TopHat)
any additional readings or articles of interest.

Course Grading

Course grades will be based on students performance in the following categories. Those categories
and the weights attached to each of them are:

In-class Participation : 10%


Homework : 15%
Two Midterm Exams : 20% each
Final Exam : 35%

Midterm exams will take place during regular class time. They are scheduled for Thursday, October
5 th and Thursday, November 9 th . The final exam will take place on Tuesday, December 19 th from
3:00 to 5:00 p.m. The final exam is comprehensive and will cover all topics we discussed in class!

Exam Goals and Policy:

All exams will aim to test your understanding of the learned concepts. Understanding of concepts is
crucial and simple memorization will (most likely) not allow you to correctly answer all of the
questions. Please study accordingly.

Students are expected to take all exams when scheduled. Excused absences will be granted in case of
illness or family emergency. Students are required to notify me about an exam absence prior to the
exam, for example through email or text message. Excuses after the fact, that is after the exam has
been taken or given are generally not accepted!

Homework Goals and Policy:

Graded problem sets are assigned through MindTap, and more specifically through the Aplia app
within MindTap. All graded problem sets are to be completed there by the given deadline. Grading is
done as soon as you submit your assignment. Your lowest two assignment scores will be dropped.

Note of caution: Assignments include randomized questions. This means that two students completing
the same assignment at the same time will (most likely) see different versions of the
same question type. Copying solutions from one another therefore will most likely
lead to wrong answers.

MindTap also provides access to the textbook problems. These are for practice only and will not be
graded. I will select some of these questions to be discussed by the Teaching Assistants in the
discussion sessions. Even though those problems are not graded, working on and thinking about those
problems yourself will be an important determinant of your success in the exams and the entire course.
I encourage you to first think about the problems yourself without help of notes or textbook, then use
those resources to solve the problems you couldnt solve without. Only then you should discuss the
solutions with your classmates and fill in the gaps.

Discussion Sections:

Section No. Room Day Time TA


B1 CGS 523 Tue 11:15 a.m. 12:05 p.m. Sanghoon (sanghoon@bu.edu)
B2 CAS 323B Mon 1:25 2:15 p.m. Jon (jlecznar@bu.edu)
B3 CAS 237 Mon 2:30 3:20 p.m. Jon (jlecznar@bu.edu)
B4 PSY B43 Wed 9:05 9:55 a.m. Enjar (enjar@bu.edu)
B5 CAS 324 Fri 1:25 2:15 p.m. Manni (yumanni@bu.edu)
B6 PSY B43 Thu 11:15 a.m. 12:05 p.m. Manni (yumanni@bu.edu)
B7 CAS 227 Fri 9:05 9:55 a.m. Enjar (enjar@bu.edu)
B8 CAS 323B Wed 4:40 5:30 p.m. Manni (yumanni@bu.edu)
B9 CAS 223 Tue 12:30 1:20 p.m. Sanghoon (sanghoon@bu.edu)

Class participation and attendance:

This semester there will be a grade for participation in class. This participation is captured through
your responses in TopHat, which I will use to ask questions during class. More details later. You are
also encouraged to ask about issues you picked up from the news and if you are interested in the
question on how they relate to the material we study. Your active participation will improve the quality
of the course for you, your classmates and me.

Please Note: Under no circumstances will extra credit work be given!

Services for Students with Disabilities

Students with disabilities (learning, medical, physical) who wish to receive academic accommodations
or auxiliary aids are required to submit the appropriate documentation to verify their eligibilit y under
the Americans with Disabilities Act of 1990 (ADA). Students should be in contact with the BU Office
of Disability Services (www.bu.edu/diability). Students who are approved to receive special
accommodations should see me as soon as possible, preferably after the first class.

Academic Conduct

The Boston University Academic Conduct Code is available at:


http://www.bu.edu/academics/resources/academic-conduct-code/
You need to read the CAS Academic Conduct Code. Academic misconduct involves not only direct
cheating on tests, but some more subtle acts as well. All work handed in for credit must be your own,
with the exception that you may quote or paraphrase from other sources if you also cite the reference
and page number. It is generally not permissible to use another student's work, even if you cite that
work. I will report cases of suspected academic misconduct to the Dean's Office. Confirmed cases of
misconduct may result in a failing grade on the exam or assignment and can lead to temporary
suspensions from the university.

Other Important Dates:

Last Day to add a class: September 18th


Last Day to drop a class without a W grade: October 10th, with a W grade: November 10th
No class meetings on: October 10th (BU Monday Schedule), November 23rd (Thanksgiving Break)

Course Outline:

The following represents a tentative outline of the course. The topics given below are the core topics
we will cover during the semester. However, I reserve the right to change the order of the chapters and
add additional material, depending on the progress we make. I shall point out when those additions or
changes are made. I will announce the chapters that will be covered in each class at the end of the
previous class.

Topics Textbook Chapters Dates (Plan)


Introduction 1, 2
Supply, Demand and Taxes 4, 6
The Data of Macroeconomics
Measuring GDP 10
Measuring Inflation 11
Measuring Unemployment 15
The Economy in the very Long Run
Economic Growth 12
Saving, Investment and the Financial System
Saving, Investment and the Financial System 13
Principles of Finance 14
The Monetary System 16
Money Growth and Inflation 17
The Economy in the Short Run
Aggregate Demand and Aggregate Supply 20
Fiscal and Monetary Policy 21
The Phillips Curve 22
The Open Economy
Review of Micro Principles 3, 9
Open Economy Macroeconomics 18, 19
Six Debates over Macroeconomic Policy 23