Assignments for Macroeconomics Principles

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Problem Set #1   Problem Set #2   Problem Set #3   in Word (.doc) form.

Baumol & Blinder's Web page 10th ed and 9th Edition 

Grades:  Section 4  Do YOU know about your credit?  Some info: here. And the Consumer Federation of America quiz is here.

Swedish Central Bank's Memorial Nobel Prize in Economics, 2002     Nobel Prize, 2003    Nobel Prize, 2004  Nobel Prize, 2005

Week 16

    Wednesday, December 14, 2005  10 am  FINAL EXAM     

Beginning of week 15

December 5, 2005   Monetary Policy 

• Papers #4 and #5 will be two pages (on to the second page at the least) for 20 points each, with all of the previous requirements. 
• Paper #4: The deficit/debt - What are they?  What are the issues?  Balanced Budget: To require balance or not, that is the question!  National Debt: Why is the debt a burden and what will happen in the long-run?  Specifically note the effect upon inflation and/or crowding out (interest rates).  Including mention of the "Policy Debate" on page 295 is required for 5 pts.  See Chapter 15.Due Monday, December 5
• Chapter 18:  Exchange rates, the trade deficit, current account deficit and Balance of Payments.
• How do imports affect the exchange rate?  Exports?  A rise in US interest rates, vis-a-vis Europe?
• Dollar hits 2 year high and ECB rate rise.

December 7, 2005   Fiscal versus Monetary Policy

• Paper #5:  The trade deficit and the dollar: what are the issues?  Is the trade deficit a problem?  Why?  How does the trade deficit affect investors in the US?  Why does a Current Account deficit REQUIRE other nations to invest in the US?  (So define current account and capital account and balance of payments).  What may be the affect upon the dollar?  See Chapter 18.  DUE December 7, 2005.
• Read Chapter 14.
• The Equation of Exchange (MV = PY), p. 266

December 9, 2005  Review

• Should the Government BE Activist?, pp. 277-283 - The Lags in Policy 
• Review of the year for the Final Exam
• BRING YOUR EXAMS AND NOTES!!!
• Free quiz #2

Beginning of week 14

November 28, 2005   Chapter 14 - Monetary versus Fiscal Policy

• Monetary Control continued. pp. 255-262
• Money Market - interest rate as the opportunity cost of money
• Transmission mechanism - Ms to real interest rates to investment to AD to Nominal GDP (y and p)
• How does the expansionary monetary policy affect interest rates, real output and the price level? - answered with graphs
• For Wednesday, how does contractionary monetary policy affect interest rates, real output and the price level for 5 pts, answered with graphs.

November 30, 2005   Budget Deficits Revisited

• Papers #4 and #5 will be two pages (on to the second page at the least) for 20 points each, with all of the previous requirements. 
• Paper #4: The deficit/debt - What are they?  What are the issues?  Balanced Budget: To require balance or not, that is the question!  National Debt: Why is the debt a burden and what will happen in the long-run?  Specifically note the effect upon inflation and/or crowding out (interest rates).  Including mention of the "Policy Debate" on page 295 is required for 5 pts.  See Chapter 15.Due Monday, December 5
• Chapter 15:
• The short run - policy mixes, p. 288-9
• The Long Run - p. 290
• Deficits and the Debt, p. 291-7

December 2, 2005  Chapter 15 - Debt and Deficits Continued

• Crowding Out, pp. 298-300 
• Any lingering issues and questions about the paper on Debt and Deficits
• Chapter 18:  Exchange rates, the trade deficit, current account deficit and Balance of Payments.
• Paper #5:  The trade deficit and the dollar: what are the issues?  Is the trade deficit a problem?  Why?  How does the trade deficit affect investors in the US?  Why does a Current Account deficit REQUIRE other nations to invest in the US?  (So define current account and capital account and balance of payments).  What may be the affect upon the dollar?  See Chapter 18.  DUE December 7, 2005.

November 23-25, 2005   HAPPY THANKSGIVING - ENJOY!!  No office hours Tuesday, Nov. 22

Beginning of week 13a

November 21, 2005   Review the Test - Quiz after the test - BRING P. Set #4: Question #1 handed in for 10 pts.

• Papers #4 and #5 will be two pages (on to the second page at the least) for 20 points each, with all of the previous requirements.
• Paper #4: The deficit/debt - What are they?  What are the issues?  Balanced Budget: To require balance or not, that is the question!  National Debt: Why is the debt a burden and what will happen in the long-run?  Specifically note the effect upon inflation and/or crowding out (interest rates).  See Chapter 15.
• Paper #5:  The trade deficit and the dollar: what are the issues?  Is the trade deficit a problem?  Why?  How does the trade deficit affect investors in the US?  Why does a Current Account deficit REQUIRE other nations to invest in the US?  (So define current account and capital account and balance of payments).  What may be the affect upon the dollar?  See Chapter 18.  DUE December 5, 2005 - two weeks today.
• Ch. 13, Money Control continued. pp. 256-262.
• Read Chapter 14

Beginning of week 13

November 14, 2005   Problem Set #4 is Postponed until Monday, Nov. 21.

• Fed's role in money creation and into Chapter 13:  Da Fed.
• Independence of the Fed, pp. 251-2
• Open Market Operations pp. 253
• How monetary authorities control the money supply (and interest rates) - OR NOT! pp.253-256
• Money Control continued. pp. 256-262.

November 16, 2005   Review the material for Test 3

• Review Chapters 9 - 13.
• Go over the problem set 

November 18, 2005  Test 3 - Chapters 9 - 13 (first half)

Beginning of week 12

November 7, 2005   Problem Set #3 is Due for 25 pts. 

• Fiscal Policy (Government Spending and Taxation) planning and Choices, pp. 213-217.
• Final "introductory" comments about fiscal policies and AD/AS/Potential GDP - the three goals of any macroeconomy.
• Read Chapter 12:  MONEY AND THE BANKING SYSTEM!

November 9, 2005   Money Contraction/Creation, Problem Set #4 is handed out for 15 pts, Due Nov. 14.

• What's Money?  pp. 230-235
• How banking began pp. 236-7
• Deposit insurance p. 238
• Regulation in banking, pp.238-40
• The Fractional Reserve System

November 11, 2005 Chapter 13: Monetary Policy

• The Fractional Reserve System
• Money Creation - how money is created and contracted by the Fed. .pp. 240-247.

Beginning of week 11

October 31, 2005   Self Correcting Mechanism - Problem Set #3 is handed out, Due Monday, Nov. 7 for 25 pts.

• Recessionary Gap - self correcting mechanism, pp. 197-9
• The U.S. Example - p. 200-5
• Inflationary Gap - self correcting mechanism p. 199

November 2, 2005   Fiscal Policy and Monetary Policy Introduction, Chapter 11

• The Multiplier revisited, pp 209-213.
• Fiscal Policy (Government Spending and Taxation) planning and Choices, pp. 213-217.

November 4, 2005  Third Paper DUE - 10 points, one page only please!  What's your passion?

• Unemployment report for October.
• Fiscal Policy (Government Spending and Taxation) planning and Choices, pp. 213-217.
• Supply-side taxation, what does it mean and what is behind the theory?  pp. 217-220

Beginning of week 10

October 24, 2005  Circular Flow - Leakages and Injections  

• Budget assignment - fill out the budget sheet (How much am I spending?) and bring the first and results pages to class Wednesday, Oct. 26. for 5 pts.  Note that the "How much am I spending?" page can be found by going to fool.com and then the personal finance calculators.
• Chapter 9 - Aggregate Demand: Unemployment or Inflation
• "Drawing Aggregate Demand in price level and real GDP "space" p. 172 & 180.
• The spending multiplier delineated, pp. 183-4.
• Inflationary Gap versus a Recesionary Gap
• Autonomous consumption changes (animal spirits) and their affect on the Aggregate Demand curve pp. 179-181.

October 26, 2005   Aggregate Supply: The Introduction

• Derivation of the AD curve, the multiplier effect with consumer confidence (autonomous consumption)
• Review of AD curve and Consumer Confidence.
• Value your car at Kelly Blue Book, make sure that I can read the amount it is worth. The print out is due Friday, Oct. 28 for 5 pts.
• Chapter 10 - Aggregate Supply: Unemployment and Inflation
• Slope of Aggregate Supply
• Shifts in Aggregate Supply: nominal wage rates, prices of other inputs, technology and productivity, available supplies of labor and capital

October 28, 2005   Self Correcting Mechanism 

• Shifts in Aggregate Supply: nominal wage rates, prices of other inputs, technology and productivity, available supplies of labor and capital
• Potential GDP: recesionary and inflationary gaps revisited.
• Another Consumer Confidence number!  The last revision in 2nd Quarter Real GDP
• The Basic Long Run Scenario: Potential GDP, AD and AS
• Recessionary Gap - self correcting mechanism
• Third Paper Assignment - Explain, given your budget, how you will meet your passions in one page, double spaced, 12 pt Times New Roman font with 1" margins, top, bottom and sides.  Make every word count - What is/are your passion(s)?  What satisfies you?  How will you pay for those passions?  10 points.  DUE Friday, November 4, 2005.

Beginning of week 9

October 17, 2005  FALL BREAK - ENJOY!

October 19, 2005  Review Test II  -  Leakages and Injections - Oh, My! 

• Review Test II - Quiz  -  Reliable Data
• Chapter 9 - Aggregate Demand: Unemployment or Inflation
• MPC and MPS - what's a propensity!

October 21, 2005   Aggregate Demand continued  -  UNEMPLOYMENT PAPER IS DUE - 1" margins, 2 articles, etc.

• Circular flow and then some!  - Tuition
• Chapter 9 - Aggregate Demand: Unemployment or Inflation
• Spending - C + I + G + (x-m) and the multiplier effect 
• Consumption determinants: wealth, price level, real interest rate, future income expectations
• Investment determinants: interest rates, tax provisions, technical change, strength of the economy
• "Animal Spirits:"  Consumer and Business Confidence
• Exports let by GDP growth abroad, Imports led by GDP growth in the US.
• The effects of Permanent versus temporary of tax changes (pp. 152-4)

Beginning of week 8

October 10, 2005  Chapter 8, Aggregate Nominal Demand and Circular FLOW??? 

• Chapter 7:  Growth Policy and Capital formation
• Productivity Growth - the Three Pillars
• Encouraging Capital Formation
• Property rights
• Education and Technical Change
• Potential GDP
• Chapter 8:  The Powerful Consumer
• Aggregate Demand = C + I + G + (X - M)
• Plot the points - Disposable Income as a determination of what consumers spend - 90 cents of each dollar of DI!

October 12, 2005  Preview for Test II and hand back the problem sets.

• Review Problem Set II
• Finish up any topics not fully covered in Chapters 5-8
• Preview the test

October 14, 2005   TEST II - Chapters 5 - 8

SWITCH  -   Monday through Friday now (up to down) - Beginning of week 7

Monday, October 3, 2005   Hand out problem set 2 - Due October 10, 2005 

• Calculating the CPI 
• The formulas for the GDP deflator, the rate of inflation, and the CPI
• Calculating the rate of inflation
• Friendly Charge Cards?!

Wednesday, October 5, 2005  Chapter 6: The Relative Price of College - Why does it keep rising?  What's my REAL wage?

• Calculating the GDP deflator
• Costs of inflation, COLAs
• Real versus nominal interest rates
• Real wages versus nominal wages

Friday, October 7, 2005  New Paper Assignment - Due October 21, 2005 for 20 points.

• Economic Growth and productivity, what are the relationships?
• From the Great Depression through today - an overview
• Full employment/low unemployment - how do we measure them?
• Paper Assignment:  Read pages 103-109 in the text and pick a topic.  For example, unemployment insurance, costs of high unemployment, high rates of unemployment among teenagers (or women or minorities), discouraged workers, etc.  Read articles on unemployment/employment.  You will find a selection on the h: drive but feel free to include articles of your own selection (click on the h: drive for directions on how to get there off campus or from the dorms).  PLEASE INCLUDE A COPY OF TWO ARTICLES THAT YOU SELECTED.  

End of week 6

September 30, 2005  Macroeconomic Goals - further investigation:  Chapter 6 - New $10 front and back

• Growth rate of GDP, Government, Personal Consumption
• The personal consumption (and government) share of GDP
• DUE MONDAY, go to Marketwatch.com and enter a ticker symbol, the click on the "profile" link and make sure that the whole company summary is readable (1 point off if it is not).  The assignment is worth 5 points.

September 28, 2005  Real Gross Domestic Product 

• Chapter 5:  Real versus nominal GDP, Recession and Unemployment
• Aggregate Demand (AD) and Aggregate Supply (AS)
• Inflation and deflation, economic growth, income increases (shifts in AD and AS)
• What is included in GDP and what is not?
• What is the Dow Jones Industrials (30 stocks) and a ticker symbol?

September 26, 2005   Introduction to Macroeconomics - Hand back the test - grin

• QUIZ AFTER THE TEST DAY!
• Chapter 5:  Real versus nominal GDP, Recession and Unemployment

End of week 5

September 23, 2005  TEST I:  Chapters 1-4

• Remember we always have a quiz the class period after the test.

September 21, 2005  Review the material covered so far.

• Review Chapters 1 through 4 for the test.

September 19, 2005   

• Chapter 4:  Shifts in Supply and Demand

End of week 4

September 16, 2005  Problem Set I is DUE - 20 points.  

• Chapter 4:  Shifts in Supply and Demand

September 14, 2005  Applications of price pressures - Article Paper 1 is due today for 20 points.

• Rent control
• Minimum wage

September 12, 2005  Price pressures

• Graphing equilibriums and shifting the demand and supply curves.
• Price pressures, price ceilings and price floors.

End of week 3

September 9, 2005  Applications of Supply and Demand.  Problem Set I is assigned - 20 points.  Skype

• PPPESTs 
• equilibrium, excess supply and excess demand.

September 7, 2005  Supply is determined.  Microsoft phone-online?

• Chapter 4: Begin discussion of supply and demand.
• Quantity demanded versus demand
• PPPPINTs begun - the demand for a good introduced.

September 5, 2005   LABOR DAY - No classes!  Enjoy the last vacation of summer!

End of week 2

September 2, 2005  ARTICLE #1 ASSIGNED!  Begin to Discuss Demand, Jobs reports are out today (Unemployment and Employment) 

• Article #1:  Constrained by the resources available to an economy, the production possibilities of that economy are limited and therefore society must make choices.  In the wake of the hurricane Katrina, examine how our society (the United States ) has allocated (or is allocating) our resources.  Make sure to briefly conclude by answering the following two questions with a paragraph each:  Are we allocating our resources efficiently?  Are we equitably allocating our resources?  Remember that the minimum number of double spaced pages is two and the maximum is three.  Also remember to photocopy the two articles on which you based your discussion (for two points each).  Total number of points is 20.  Due Friday, September 14, 2005.
• We covered the indicators and numbers for the three macroeconomic goals and finished Chapter 3, increasing costs and technology growth implications for the production possibilities frontier. 

August 31, 2005  CNN Money-Economy    The Calendar  First Revision of 2nd Quarter GDP

• Quiz time finally?!!?
• Continued discussion of the role of technology, efficiency, unemployment and trying to produce too much in the production possibilities model.
• Efficiency and equity
• Allocation of resources - and how?

August 29, 2005  A Thumbnail Sketch of the Economy - Refocus on the 3 Macroeconomic Goals

• Finish the thumbnail sketch in Chapter 2 and refocus on the Three Goals!
• Chapter 3: Scarcity and Choice - The First Macroeconomic model: Production Possibilities Frontiers
• What's possible and what is not?

End of week 1

August 26, 2005     Myth and Reality - Denver gas prices

• Finish Chapter 1 and begin Chapter 2 - Maps and Models
• Chapter 2: Inputs and Outputs - A Graphical Overdose!

August 24, 2005     The basic economic conditions.

• Read Chapter 1 - 6 ideas and a few comments.
• Finding the indicators through my web page at the Whitehouse's Economic Statistics Briefing Room.
• Continue goals and indicators discussion.

August 22, 2005     Introduction to the course

• Note the three Macroeconomic goals and indicators of each: 
  • Economic Growth - real GDP change
  • Price Stability - CPI change
  • Full Employment - Unemployment Rate

[Home Page] - [Drew's MSC Page] - [MSC - Dept. Bus. Adm.] - [MSC]

email: drew at drewparkes.com
Last Update: December 09, 2005
By Andrew L. H. Parkes, Ph. D.