3 Hours/Week, 3 Credits

Introduction to macroeconomics: definition of macroeconomics; macroeconomic performance, objectives and instruments of macroeconomics. Measuring national product and national income: GNP vs. GDP concept and measurement; GDP and GNI; NI and personal disposable income; GDP and spending; nominal and real GDP; comparing income levels between different countries. Determination of national income and investment: the circular flow; components of aggregate demand and planned spending; aggregate demand; equilibrium output; changes in equilibrium output; the multiplier; investment, the paradox of thrift. Money and banking: definition and functions of money; different types of money; banking from goldsmith banking to modern banking; commercial banks and multiple deposit creation. Central banking and monetary system - functions of central bank, money supply, open market operations, high-powered money and the money stock, money multiplier. Taxes and government expenditure: principles of taxation; types of taxation, heads of government expenditure. Budget and fiscal policy: government in the circular flow; objectives of fiscal policy. Inflation and unemployment: types and causes of inflation, expected and unexpected inflation: cost of inflation: money supply and the price level: velocity and quantity equation, types and causes of unemployment, remedial measures, Phillips curves. International trade: concepts of absolute and comparative advantage; terms of trade; economics of protection concepts on tariff and non-tariff barriers, arguments for and against protection.