Course Outline School: Department: Course Title: Business Accounting Principles of Macroeconomics Course Code: ECON 206 Course Hours/Credits: 42 Prerequisites: Co-requisites: Eligible for Prior Learning, Assessment and Recognition: Originated by: Revised by: N/A N/A Yes Aurelia Best, PhD Shirley Lamarre Revision : Winter 2015 Current Semester: Summer 2015 Approved by: Chairperson/Dean Students are expected to review and understand all areas of the course outline. Retain this course outline for future transfer credit applications. A fee may be charged for additional copies. This course outline is available in alternative formats upon request.
Course Description This course covers the principles of Macroeconomics. This is the study of the aggregate level of economic activity. This includes: inflation. unemployment, the business cycles, economic growth, the level of national income, money and banking, international trade and finance, the balance of payments, fiscal and monetary policies. Program Outcomes Successful completion of this and other courses in the program culminates in the achievement of the Vocational Learning Outcomes (program outcomes) set by the Ministry of Training, Colleges and Universities in the Program Standard. The VLOs express the learning a student must reliably demonstrate before graduation. To ensure a meaningful learning experience and to better understand how this course and program prepare graduates for success, students are encouraged to review the Program Standard by visiting http://www.tcu.gov.on.ca/pepg/audiences/colleges/progstan/. For apprenticeship-based programs, visit http://www.collegeoftrades.ca/training-standards. Course Learning Outcomes The student will reliably demonstrate the ability to: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Define the nature of the economic problem Explain the differences between economic systems Determine gross domestic product or GDP Explain how unemployment and inflation figures are determined Evaluate why the theories of John Maynard Keynes are relevant to current Explain the economic factors that affect aggregate consumption and investment Explain the nature and problems of implementing fiscal policy Analyze the nature of government debt and deficits Explain the nature of money Explain the role of the Bank of Canada in determining monetary policy Explain Canada s balance of payments problems Explain the factors that determine the international value of the Canadian dollar Analyze current economic problems economic thinking in Canada. Essential Employability Skills (EES) The student will reliably demonstrate the ability to*: 1. Communicate clearly, concisely and correctly in the written, spoken, and visual form that fulfills the purpose and meets the needs of the audience. 2. Respond to written, spoken, or visual messages in a manner that ensures effective communication. 3. Execute mathematical operations accurately. 4. Apply a systematic approach to solve problems. 5. Use a variety of thinking skills to anticipate and solve problems. 7. Analyze, evaluate, and apply relevant information from a variety of sources. 11. Take responsibility for one's own actions, decisions, and consequences. *There are 11 Essential Employability Skills outcomes as per the Ministry Program Standard. Of these 11 outcomes, the following will be assessed in this course. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 2
Global Citizenship and Equity (GC&E) Outcomes N/A Methods of Instruction In Class Instruction; Online lab assignments Text and other Instructional/Learning Materials Text Book(s): Title: Exploring Macroeconomics, 4th Edition with Author: Robert Sexton, Peter Fortura, and Colin Kovacs Nelson Education Online Resource(s): Lab Scheme Assignments: In-Class Assignments Assignments - online: Lab Quiz: Quizzes (4) Term paper: Term paper - individual or group Test 1: Term test Test 2: Term Test Final Exam: Comprehensive final test CLO(s) EES GCE Outcome(s) Outcome(s) Weight/100 Assignments 1, 2, 3, 7, 9, 1, 2, 3, 4, 10 10 5, 7, 11 Assignments - online 1, 2, 3, 4, 5, 3, 4, 5 10 6, 7, 8, 9, 10, 11, 12 Quiz 1, 2, 3, 4, 5, 1, 2, 3, 4, 5 10 6, 7 Term paper 13 1, 2, 5, 7, 10 11 Test 1 1, 2, 3 1, 3, 4, 5 15 Test 2 4, 5, 6 15 Final Exam 1, 2, 3, 4, 5, 1, 2, 3, 4, 5 30 6, 7, 8, 9, 10, 11, 12, 13 Total 100% If students are unable to write a test they should immediately contact their professor or program Chair for advice. In exceptional and well documented circumstances (e.g. unforeseen family problems, serious illness, or death of a close family member), students may be able to write a make-up test. All submitted work may be reviewed for authenticity and originality utilizing Turnitin. Students who do not THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 3
wish to have their work submitted to Turnitin must, by the end of the second week of class, communicate this in writing to the instructor and make mutually agreeable alternate arrangements. When writing tests, students must be able to produce official College photo identification or they may be refused the right to take the test or test results will be void. Student Accommodation It is College Policy to provide accommodation based on grounds defined in the Ontario Human Rights Code. Accommodation may include modifications to standard practices. Students with disabilities who require academic accommodations must register with the Centre for Students with Disabilities. Students requiring accommodation based on other human rights grounds should talk with their professors as early as possible. Please see the Student Accommodation Policy. Use of Dictionaries Dictionaries may be used in tests and examinations, or in portions of tests and examinations, as long as they are non-electronic (not capable of storing information) and hard copy (reviewed by the invigilator to ensure notes are not incorporated that would affect test or examination integrity). Program or School Policies N/A Course Policies N/A College Policies Students should familiarize themselves with all College Policies that cover academic matters and student conduct. All students and employees have the right to study and work in an environment that is free from discrimination and harassment and promotes respect and equity. Centennial policies ensure all incidents of harassment, discrimination, bullying and violence will be addressed and responded to accordingly. Academic honesty is integral to the learning process and a necessary ingredient of academic integrity. Academic dishonesty includes cheating, plagiarism, and impersonation. All of these occur when the work of others is presented by a student as their own and/or without citing sources of information. Breaches of academic honesty may result in a failing grade on the assignment/course, suspension or expulsion from the college. For more information on these and other policies, please visit www.centennialcollege.ca/aboutcentennial/college-overview/college-policies. Students enrolled in a joint or collaborative program are subject to the partner institution's academic policies. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 4
PLAR Process This course is eligible for Prior Learning Assessment and Recognition (PLAR). PLAR is a process by which course credit may be granted for past learning acquired through work or other life experiences. The PLAR process involves completing an assessment (portfolio, test, assignment, etc.) that reliably demonstrates achievement of the course learning outcomes. Contact the academic school to obtain information on the PLAR process and the required assessment. This course outline and its associated weekly topical(s) may not be reproduced, in whole or in part, without the prior permission of Centennial College. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 5
Topical Outline (subject to change): Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies 1 The Role and Method Review materials: Describe economics and the economic way of Lecture and Discussion of Economics; thinking Application Problems Scarcity, Trade-Offs Chapters 1 and 2 Identify the components of an economic theory In-Class Assignment 1 Define scarcity Explain opportunity cost and the rationale for choice Define marginal thinking Discuss why incentives matter Discuss the advantages of specialization and gains from trade and specialization Explain how market prices coordinate economic activity Explain the relationship between variables Illustrate the use of a graph to show the relationship among variables Discuss the three economic questions every society faces (What is to be produced, how are goods and services to be produced and who will get the goods and services) Discuss how the production possibilities curve represents the potential total output combinations of goods in a given time period Illustrate and analyze the production possibilities curve Discuss market efficiency and how opportunity cost is measured THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 6
Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies Explain the law of increasing opportunity costs Apply the production possibilities curve to show economic growth Describe a market and the role of buyers and sellers in a market Explain how market prices coordinate economic activity Explain the circular flow model 2 Supply and Demand: Bringing Supply and Demand Together Review materials: Chapters 3 and 4 Explain the law of demand, the demand curve and changes in demand versus changes in quantity demanded Explain the law of supply, the supply curve, and changes in supply versus changes in the quantity supplied Application Problems In Class Assignment 2 Explain shifts in the demand curve and the supply curve Discuss market equilibrium, equilibrium price and equilibrium quantity Analyse the impact on equilibrium price and quantity when there is a shift in the demand curve and/or supply curve 3 Introduction to the Macroeconomy Chapter 5 Explain price controls and distinguish between price floors and price ceilings Discuss the three major macroeconomic goals Distinguish between employment and unemployment and their effects on the economy Case Study - Newspaper article Quiz 1; Term paper assignment posting Describe the different categories of unemployment and the labour force THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 7
Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies participation rate Discuss the natural rate of unemployment and the impact of employment insurance and technological change on unemployment Explain the terms inflation and deflation in terms of overall price level Explain how inflation is measured using the Consumer Price Index (CPI) Describe the negative effects of inflation Explain the correlation between inflation and interest rates 4 Measuring Economic Performance Chapter 6 Discuss the four phases of a business cycle (economic fluctuations)and the duration Explain the importance of measuring economic performance Explain the concept of national income accounting as it relates to measuring economic performance Application problems; In-Class Assignment 3; Term Test 1 Discuss Gross Domestic Product (GDP)as in index for measuring national economic performance Explain the expenditure approach to measuring GDP and its computation Describe the income approach to measuring GDP Differentiate between personal income and disposable income Explain the formula for converting nominal GDP into real GDP (in constant dollars) Discuss the deficiencies of GDP as a THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 8
Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies measure of economic welfare 5 Economic growth in the global economy Chapter 7 Explain the difference between short run variations in economic activity(the business cycle) and long run economic growth and the rule of 70 Case study: Current newspaper article In Class Assignment 4 Explain the factors that contribute to economic growth Describe the role of public policy in increasing economic growth 6 Aggregate Demand and Aggregate supply and Macroeconomic equilibrium Chapters 8 and 9 Chapter 9 Appendix: The multiplier process Explain the effects of population growth on per capita economic growth and how it relates to the the Malthusian prediction or theory Explain the aggregate demand and the four main components of aggregate demand Discuss the investment and savings market using the investment demand curve and supply savings curve Explain the variables which create the shifts in the aggregate demand curve Evaluate the effects of aggregate demand shifters Evaluate the behaviour of the aggregate supply curve in the short run (the profit effect and the misperception effect) Evaluate the behaviour of aggregate supply curve in the long run Explain the factors of production that affect the short run and the long run aggregate supply curves Describe how macroeconomic equilibrium is determined Application problems Quiz 2 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 9
Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies Explain and illustrate a recessionary gap and an inflationary gap Discuss how the economy may self-correct to a recessionary or an inflationary gap Explain the shifts in aggregate expenditure and the application of the expenditure multiplier process 7 Fiscal Policy Chapter 10 Explain fiscal policy (expansionary and contractionary) and how it impacts the Government's budget Describe the major categories of government spending and sources of government revenues (progressive, regressive and proportional tax) Discuss the multiplier effect and how the changes in the marginal propensity to consume (MPC) affects the multiplier process Describe the impact of the multiplier effect on the aggregate demand curve and on tax cuts Discuss how the fiscal policy alleviates the recessionary and inflationary gaps Explain automatic stabilizers Summarize possible obstacles to effective fiscal policy Describe how the government s budget deficit is financed Application problems In Class Assignment 5 8 Money and the Banking System Chapter 11 Explain the problems associated with government debt and budget deficits Explain the four functions of money Explain how money and the supply of money are measured and the use of currency as legal tender Case study: Current newspaper article In Class Assignment 6; Term Test 2 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 10
Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies Describe how banks create money Discuss a bank's desired reserve ratio and the uses of excess reserves Explain how the money multiplier works and the formula for potential money creation 9 The Bank of Canada Chapter 12 Explain the role and responsibilities (currency, funds management, financial system, and monetary policy)of the Bank of Canada Case study: Current newspaper article Quiz 3 Describe the tools used by the Bank of Canada in enacting monetary policy Explain the use of the equation of exchange to understand the role of money in the national economy 10 Monetary Policy Chapter 13 Explain and illustrate how the money market works Explain how the Bank of Canada influences real gross domestic product in the short run Explain how the Bank of Canada influences the real interest rate in the short run Describe how expansionary monetary policy works in a recessionary gap Describe how a contractionary monetary policy works in an inflationary gap Discuss problems in implementing monetary and fiscal policy Explain the Phillips curve (unemployment and inflation) and how it relates to the aggregate supply and demand model 11 International Trade Chapter 14 Identify Canada s merchandise trade Describe the various international trade agreements and their impact on Canada's Case study: Current newspaper article Application problems In-class assignment 7; Due: Term paper assignment; Quiz 4 THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 11
Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies exports and imports of goods and services Explain the principle of comparative advantage and gains from trade Describe supply and demand in international trade (consumer surplus and producer surplus) Discuss tariffs, import quotas, and subsidies and their impact on the domestic economy 12 International Finance Chapter 15 Explain the balance of payments its components (the current account for import and export of goods, the capital account transactions and the use of statistical discrepancy) Explain how exchange rates are determined Discuss the determinants in the foreign exchange market (equilibrium changes) Case study: Current newspaper article Assignment 13 Review Class All chapters covered in the course 14 Final Exam Comprehensive: All chapters covered in the course Discuss the advantages and disadvantages of the system of flexible exchange rates All outcomes in the course Lecture and discussion N/A All weekly outcomes covered in the course N/A In-person written exam - Comprehensiv e: 30% weighting THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 12