Economics 1 – Fall 2014 (81081 and 81384)
(Macroeconomics)
Professor: V. Lee Prescott
- E-mail:
- Voice Mail: (707) 864-7000 ext. 5072
- SCC H drive contains a copy of the syllabus, lecture slides and graph exercises (access from campus computer or go online to http://bcs.solano.edu
- Note: My preferred method of communication is email! Please use email whenever possible.
Professor Consultation: by appointment. Feel free to consult with me about any assistance you may need concerning this course. You may email or call anytime to schedule an appointment. Before and/or after class is my preferred time to meet.
Academic Standing or Personal Problems/Situations: If you have any questions concerning your academic standing, please contact me. If you have any personal problems that may influence your behavior/performance/attendance in the class, please let me know about them.
Academic Regulations: Each student is encouraged to familiarize him/herself with the “Academic Regulations” outlined in the college catalogue. Please note: students are responsible for withdrawing from this course or from this college. Please familiarize yourself with the important dates for withdrawing from this course by referring to the catalogue or online information.
Testing and Grading: Your performance on the tests will comprise over 90% of your final grade for the course. Grading will be based on the following scale:
90 – 100 “A”, 80 – 89 “B”, 66 – 79 “C”, 56 – 65 “D”, 55 and Below “F”.
In order for a student to receive a grade of “A” or “B” the student must turn in all of the homework assignments, including the article assignments, in satisfactory condition. All assignments must be neat, typed or legible, free of spelling errors, stapled, and written in complete sentences. Late assignments are not accepted.
The tests will generally consist of forty multiple choice questions, each worth two points (40x 2 = 80) and one essay question worth twenty (20) points for a total of 100 points each. For scheduled tests, consult your course outline on page 2 of this handout. Homework is worth 4 points each and the article assignment is worth 25 points.
Special Notes on Testing:
1. You will need to purchase (available in the College Bookstore) a SCANTRON MINI ESSAY book, FORM #886-E. You will also need a #2 pencil.
2. MAKE-UP TEST….One only, for legitimate reasons. Unless the make-up test is cleared by the professor ahead of time, there will be an automatic 10 points taken off for not taking the test at the scheduled time. Make-ups will be given only by appointment. If you fail to take the missed test as scheduled, an automatic score of “0” will be given. Please note: there is no make-up test for the final exam, no exceptions.
Attendance: After you are late to class twice, each additional time you are late to class will be handled as an absence. Absences can affect your grade (see next paragraph). Be on time.
Other Grade Factors: Class participation may be included as a minor part of your overall grade. Since you can’t participate if you’re not in class, attendance will be one indication of participation. Also, occasionally I may allow some optional extra credit assignments, but do not rely on these relatively few extra credit points to significantly improve your grade.
Tentative Outline Required Text: Macroeconomic
Econ 1 19th Edition by McConnell Brue Flynn
Macroeconomics (Customized for my students)
Professor V. Lee Prescott Strongly encouraged: Accompanying Study
Guide
Exact days of tests are purposely not listed because dates will vary according to classroom progress and we may need the flexibility to adjust test schedules. I will give you notice before a scheduled test. This is another good reason to be in class.
Chapter Title
1 Limits, Alternatives, and Choices
3 Demand, Supply, and Market Equilibrium
TEST #1 CHAPTERS 1 and 3 HOMEWORK DUE THE DAY OF THE TEST!
7 Measuring Domestic Output and National Income
8 Economic Growth
9 Business Cycles, Unemployment and Inflation
TEST #2 CHAPTERS 7, 8 and 9 HOMEWORK DUE THE DAY OF THE TEST!
10 Basic Macroeconomic Relationships
11 The Aggregate Expenditures Model (up to, but not including the public sector)
TEST #3 CHAPTERS 10 and 11 HOMEWORK DUE THE DAY OF THE TEST!
11 AE Model continued - Adding the Public Sector (starting on public sector)
13 Fiscal Policy, Deficits, and Debt
TEST #4 CHAPTERS 11 and 13 HOMEWORK DUE THE DAY OF THE TEST!
14 Money, Banking and Financial Institutions
16 Interest Rates and Monetary Policy
TEST #5 FINAL: CHAPTERS 14 AND 16 HOMEWORK DUE THE DAY OF THE TEST!
· Final exam schedule: CRN 81081 – 12/10/14 – 8:00am
· Final exam schedule: CRN 81384 – 12/11/14 – 8:00am
Homework assignments are found at the end of each chapter. Complete the “Questions” and “Problems” as designated in the table below.
Chapters
/Questions
1 / Question #1 and 10. Problem #5 and 8. Appendix problem #1.3 / Question #2, 3, 5, and 6. Problem #3 and 4.
************* / ***************************
7 / Question #4 and 9. Problem #4 and 6.
8 / Question #1.
9 / Question #1, 5, 8 and 9. Problem #3.
************* / ***************************
10 / Question #1 and 7. Problem #1 and 9.
11 / Question #1. Problem #1, 2, 4 and 5.
************* / ***************************
11 / Question #7 and #8.
13 / Question #4, 8 and 10. Problem #1.
************* / ***************************
14 / Question #3, 5, and 8.
16 / Question #1, 2, 6, and 7.
Article Assignment: This 25 point assignment is due the last day of class. For each chapter, find an article in a recognized news source (newspaper, magazine or online) that relates to a concept from that chapter. Explain how the article relates to the concept from the chapter. Your work must be typed or legible and clearly show me that you understand the concept. Attach the article to your written work. You must include a cover page and table of contents showing the chapter, concept and source. Following is an example of an article assignment:
[QUOTE] “In chapter 3 we discussed the concepts of demand and supply. This article from CNN Money relates directly to the concept as it considers that the price of oil is currently abnormally high because of factors on both the supply side and demand side.
In particular, unrest in the Middle East continues to curtail the production of crude oil, which lessens the available supply. The article specifically mentions “hot spots” of Libya, Egypt, Syria and Bahrain, but even without political unrest, we still have the ongoing supply limits imposed by OPEC (Oil Producing Exporting Countries) which tend to keep supply low on a continuous basis.
Combining supply constraints with growing demand ultimately results in higher prices. While the United States continues to be the largest consumer of oil at 20% of world production, consumption in other countries is growing at an even faster pace than the U.S. The author specifically mentions China, but other nations, such as India are also expected to experience strong growth. These issues coupled with the reality that crude oil hydrocarbons are a finite commodity on planet earth would suggest that high price trends could very well be the long-term norm, despite the normal short-term ups and downs of prices from changing market conditions.”
Bernanke's fuel, oil'srally
CNN Money - May 2, 2011
By Daryl Jones
In his press conference last week, Federal Reserve Chairman Ben Bernanke highlighted his belief that high commodity prices are simply transitory in nature. He pegged the current rise in oil prices to both supply and demand. On the supply side of the equation, he noted unrest in the Middle East as currently constraining oil production, which is fair point, especially given the sharp decline in Libyan production. On the demand side, he highlighted the continuing growth in demand from emerging markets. Several factors contribute to oil prices:
1. Geopolitical– In late March our key takeaway was that civil unrest was set to accelerate in the Middle East and it has done so. Currently, the key hot spots are Libya, Egypt, Syria and Bahrain, with long term outcomes still difficult to determine. Since the March call, this factor has become even more prevalent.
2. Supply & Demand– In the United States, which consumes roughly 20% of the world's oil production, demand is clearly starting to slow as indicated by the most recent data points from the Department of Energy, which showed a much larger than expected build in oil inventory. Conversely, Chinese demand was up 11% year-over-year, which suggests continued strong growth of oil demand out of the world's second largest consumer, albeit this was a slowdown from February. Of our three factors, this is the one that is marginally less positive from our long oil call on March 23rd.
3. Monetary Policy– Based on Chairman Bernanke's comments from last week, it seems unlikely that the Federal Reserve will raise rates over the intermediate term. In that period, it is likely that most other major economies raise rates at least once, if not more than once. Thus global monetary policy will, over the course of the next few months, move even further away from U.S. monetary policy, which is negative for the U.S. dollar and positive of the inversely correlated price of oil. [END QUOTE]
Additional Course Information
Student Learning Outcomes (SLO):
Ø Describe basic economic concepts, identify market equilibrium and be able to recommend appropriate fiscal and monetary policies to reduce unemployment and control inflation and increase GDP.
Other Student Performance Objectives:
Ø As a result of successful completion of this course, a student will be able to:
1. Explain what an economic principle is and how economic principles are obtained.
2. Identify the four economic resources and the type of income associated with each.
3. Define opportunity cost and use the production possibilities curve to explain the concept.
4. Predict the effects of changes in demand and supply on equilibrium price and equilibrium quantity, and on the prices of substitute and complementary goods.
5.Explain the possible effects of inflation on real output and employment.
6. Explain Keynesian economics on unemployment in a capitalistic economy and the type of policy government should pursue.
7. Describe the specific fiscal policies that can be used to reduce unemployment, and the specific policies that can be used to reduce inflationary pressures.
8. Describe the specific monetary policies the Federal Reserve should use to reduce unemployment and the specific policies it should use to reduce inflationary pressures in the economy.
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