Detailed Outline including Behavioral Objectives
Days One and Two (June 30 and July 1,
2008)
Reading Assignments: Tregarthen and Rittenberg, Chapters 1-3, and pp. 374-377.
Review the material in the Appendix to Chapter 1, Working with Graphs
Behavioral Objectives for Chapter 1: After participating in Lecture One, reading Chapter 1 and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and study guide, you should be able to:
1. Define economics, scarcity, three basic questions of economics, opportunity cost and the ceteris paribus assumption.
2. Distinguish sufficiently between the following pairs of concepts to correctly identify each from a list or display of possible examples: free good vs. economic good, microeconomics vs. macroeconomics, hypothesis vs. theory, theory vs. law, normative vs. positive statements, independent vs. dependent variables, and two-variable graphs vs. time-series graphs.
3. Recognize each concept listed in 1 and 2 above in newspaper or news magazine articles and make up personal examples of each.
4. Apply each concept listed in 1 and 2 above to new situations and teacher made examples
5. Explain three distinguishing characteristics of the economic way of thinking.
6. Define and explain the process of the scientific method.
7. Explain the role of models in economics.
8. Generate hypotheses about an economic problem.
9. Devise a plan to test a simple hypothesis about an economic problem.
10. Distinguish between causation and correlation (one instance of the fallacy of false cause).
Behavioral Objectives for Chapter 2: After participating in lectures, reading Chapter 2, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and study guide, you should be able to:
1. Define the factors of production.
2. Recognize examples of factors of production in newspaper and news magazine articles and in teacher-made examples.
3. Define the production possibilities curve and explain why it is negatively sloped.
4. Explain why the production possibilities curve is likely to bow out.
5. Derive a production possibilities curve from tables of data.
6. Use the production possibilities model to distinguish efficient vs. inefficient production and full employment vs. idle factors of production and explain their impact on the people of an economy.
7. Define and explain comparative advantage, specialization, and the law of increasing costs.
8. Apply the production possibilities model to explain patterns in international trade given information about pairs of economies.
9. Define economic growth and illustrate it with production possibilities curves.
10. Identify sources of economic growth and explain how each affects the growth pattern.
11. Distinguish among the three major economic systems and give an example of each.
12. Explain strengths and weaknesses of each economic system discussed in item 11.
13. List attributes of economic systems not measured by the production possibilities curve directly-for example, freedom.
14. Identify four generally accepted roles of government in a market economy.
15. Calculate the rate of trade off between two products graphed on a linear graph.
Behavioral Objectives for Chapter Three: After participating in lectures, reading Chapter 3, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Define demand and supply.
2. Distinguish between the following pairs of concepts: demand and quantity demanded, supply and quantity supplied, demand schedule and demand curve, supply schedule and supply curve, movement along and shift in a demand or a supply curve.
3. List several factors that affect demand and explain how each affects demand.
4. List several factors that affect supply and explain how each affects supply.
5. Create a demand or a supply curve given a demand or a supply schedule and vice versa.
6. Use a supply-and-demand graph to find equilibrium price and quantity and to determine whether a non-equilibrium price results in a shortage or a surplus.
7. Explain what happens to make surpluses or shortages normally last only a short time.
8. Explain how price controls may create persistent surpluses or shortages.
9. Recognize examples of supply and demand analysis at work in teacher-made or newspaper or news magazine articles.
10. Represent real-world events by supply-and-demand graphs.
11. Predict what will happen to demand or supply when one of the ceteris paribus variables (shifters) changes.
12. Predict what will happen to equilibrium price and quantity when supply or demand changes.
13. Apply the supply and demand model to new situations.
14. Express the supply and demand model in simple linear equations and solve for equilibrium.
15. Explain the significance of the slope of the curve which is stationary to the new equilibrium when the other curve shifts.
Day Three- July 2, 2008
Reading Assignments: Tregarthen/Rittenberg, Chapters 20 and 21
Behavioral Objectives for Chapter 20: After participating in lecture, reading Chapter 20, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Define the terms at the end of the chapter.
2. Distinguish between a price increase for several goods and inflation by identifying instances of each from a list of examples or from newspaper stories.
3. Define the concept of a price index and explain its function.
4. Interpret CPI figures for different years as to changes in the cost of living.
5. Explain the limitations of price indices as measures of well being.
6. Identify gains and losers from inflation and explain why they gain or lose.
7. Recognize the different kinds of unemployment in newspaper and news magazine stories.
8. Determine who would be counted as unemployed from a list of examples.
9. Distinguish natural employment and full employment and illustrate them graphically.
10. Illustrate cyclical unemployment with graphs of the labor market.
11. Describe the phases of the business cycle.
12. Calculate real GDP, a price index, and the inflation rate from data.
13. Create mathematical examples that illustrate the effects of changes in consumer purchases in response to relative price changes, the introduction of new products, and quality changes on the accuracy of the CPI as a measure of the cost of living.
14. Calculate the unemployment rate from sample survey data.
Reading Assignments: Tregarthen/Rittenberg, Chapter 21
Behavioral Objectives for Chapter 21: After participating in lecture, reading Chapter 20, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Explain why each of the terms and concepts for review at the end of the chapter is important.
2. Interpret a circular flow diagram by explaining the meaning of each of the flow arrows.
3. Explain why the value of final output in a particular period always equals the value of income generated in its production.
4. Distinguish between investment as used in the circular flow diagram and financial investment, read GDP and nominal GDP, net investment and gross investment.
5. Explain why transfer payments are excluded from GDP.
6. Explain why indirect business taxes are included in GDP but direct income taxes are not.
7. Find current newspaper or news magazine articles that use the concepts of real and nominal GDP, real GDP per capita, and make international comparisons of economic performance.
8. Trace the effect of a change in each of the following variables on the economy by showing the flow changes on the circular flow diagram: C, I, X, M, G, taxes on business, taxes on households, government transfer payments.
9. Identify and explain the measurement and conceptual problems associated with estimating GDP.
10. Evaluate the effectiveness of GDP estimates as a measure of the economic well-being of an economy.
11. Evaluate the effectiveness of GDP and related measures as a means of comparing different economies.
12. Calculate nominal GDP from a table of data by both the product approach and the income approach.
13. Calculate population, per capita GDP, or real GDP given data on any two of the three.
14. Create a circular flow diagram from tables of data on the components of GDP from both the product and income approaches.
Day Four – July 3, 2008
Reading Assignments: Tregarthen/Rittenberg: Chapter 22
Behavioral Objectives for Chapter 22: After participating in lecture, reading Chapter 22, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Interpret the aggregate demand and short-run aggregate supply curves and identify the factors that shift each curve.
2. Show how the intersection of the aggregate demand and short-run aggregate supply curves determines the equilibrium level of real GDP and the price level.
3. Relate shifts in aggregate demand or short-run aggregate supply to changes in equilibrium real GDP and the price level.
4. Relate the natural level of employment to the natural level of real GDP and explain how the economy adjusts to its natural level.
5. Identify factors that shift aggregate demand and predict the impact on equilibrium real GDP and the price level of such shifts.
6. Identify factors that shift short-run aggregate supply and predict the impact on equilibrium real GDP and price level of such shifts. Do the same for long-run aggregate supply.
7. Define the exchange rate and explain how a change in the exchange rate affects aggregate demand.
8. Use the model of aggregate demand and aggregate supply to illustrate how events in the foreign exchange markets affect real GDP and the price level.
9. Use the circular flow of economic activity to explain the relationship between household, business, government, and foreign sectors of the economy and to show how changes taking place in one sector affect all of the others.
10. Construct graphs of aggregate supply and aggregate demand from data tables and determine equilibrium.
Day Five – July 4, 2008
- Review: In order to
accommodate midterm, class will end at 10:30 a.m. Multiple choice portion of exam covers
chapters 2, 3, and 20-22; Essay/problem portion of midterm covers only
the material in Chapters 20-22.
Day Six – July 7, 2008
Reading Assignments: Tregarthen/Rittenberg, Chapter 23
Behavioral Objectives for Chapter 23: After participating in lecture, reading Chapter 23, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Define economic growth
2. Explain the problems of using actual read GDP data in measuring economic growth and show how they can be overcome.
3. Use the rule of 72 to compare the growth paths of different countries given their growth rates.
4. Explain the relationship between economic growth and per capita GDP.
5. Show the connections among the economy's production function, the labor market, and the long-run aggregate supply curve.
6. List the factors that encourage economic growth.
7. Recognize factors that affect economic growth in news media stories.
8. Evaluate the likely impact on growth given a proposed set of policy actions.
9. Calculate growth rates from data on actual real GDP and employment levels.
10. Estimate levels of real GDP in the future given a starting point and
growth rate.
Day Seven- July 8, 2008
Reading Assignments: Tregarthen/Rittenberg, Chapters 24
Behavioral Objectives for Chapter 24: After participating in lecture, reading Chapters 24, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Define money and explain the alternative definitions of money (M1 and M2).
2. Explain how each component of M1 and M2 meets the definition of money and performs money functions.
3. Explain the economic impact of having money that performs one or more money functions poorly.
4. Understand the concept of money sufficiently to explain why its definition changes over time and how such changes come about.
5. Define financial intermediation and explain why a bank is a financial intermediary.
6. Explain why other financial intermediaries are not considered banks.
7. Explain the basic profit-maximizing behavior of private banks.
8. Understand a bank balance sheet sufficiently to identify its assets, liabilities, and net worth.
9. Create a balance sheet for a bank and the system as a whole to illustrate the way banks create and destroy money.
10. Calculate the deposit multiplier from data provided by the instructor and use it to predict money supply changes in teacher-made problems.
11. Describe the structure of the Fed.
12. Explain the advantages and disadvantages of having the Fed largely independent of the federal government.
13. List and define the policy tools of the Fed.
14. Explain how each policy tool might affect the money supply and its advantages and disadvantages.
15. Derive the simple deposit multiplier.
16. Derive more complex deposit multipliers involving multiple reserve requirements and different kinds of deposits.
Day Eight- July 9, 2008
Reading Assignments: Tregarthen/Rittenberg, Chapters 25 and 26
Behavioral Objectives for Chapter 25: After participating in lecture, reading Chapter 25, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Understand the bond and foreign exchange markets sufficiently to interpret their graphs and explain the behavior of those in these markets when autonomous changes occur.
2. Explain three motives for holding money.
3. Describe the major factors that influence the amount of money held for each of the motives in objective 2.
4. Explain the graph of money supply.
5. Define money market equilibrium.
6. Explain what happens that causes the equilibrium to be restored in the money market when the actual interest rate is above or below its equilibrium level.
7. Describe how a change in the money supply affects consumption, investment, and net exports.
8. Trace the effects of a change in the money supply on the foreign exchange market and on the bond market.
9. Trace the effects of a change in the money supply on aggregate demand and supply.
10. Explain factors that might offset the general direction of change in the economy from a change in the money supply.
11. Interpret graphs of aggregate supply and aggregate demand that display
the effects of changes in the money supply.
12. Interpret articles in newspapers that report changes in the money supply and their intended purposed based on the concepts of this chapter.
Behavioral Objectives for Chapter 26: After participating in the lecture, reading Chapter 26, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. State the goals of monetary policy and describe the basis of their legitimacy.
2. Explain and show graphically how the policy tools of the Fed are supposed to affect economic activity.
3. Identify the assumptions that underlie the theory of monetary policy impact on the economy.
4. Demonstrate how the impact of monetary policy would change (or not change) if the underlying assumptions were untrue.
5. Explain the cause of lags in monetary policy and their impact on effectiveness of monetary policy.
6. Explain the rational expectations model and its impact on effectiveness of monetary policy.
7. Demonstrate graphically how monetary policy can be offset by shifts in real investment.
8. Recognize instances of monetary policy in operation in the news media and evaluate whether the policy was appropriate and effective.
9. Develop and defend a hypothetical monetary policy given a real-world or instructor-made case study.
Day Nine: July 10, 2007
Reading Assignments: Tregarthen and Rittenberg, Chapters 27
Behavioral Objectives for Chapter 27: After participating in the lecture, reading Chapter 27, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Distinguish between the concepts in the following pairs: government purchases and government spending, expansionary and contractionary fiscal policy, the federal budget deficit and the national debt, and automatic stabilizer and discretionary fiscal policy.
2. Explain how changes in the personal income tax, transfer payments, business taxes, payroll taxes, and government purchases affect aggregate demand and supply.
3. Interpret a graph that illustrates changes in various kinds of government spending and taxes sufficiently to justify the movements in the lines by economic theory.
4. Recognize the concepts of this chapter in media news reports.
5. Take a personal position on a fiscal policy change and defend it using the analysis of this chapter.
6. Reproduce the basic arguments on whether the burden of the debt can be transferred to future generations and critically evaluate them.
Day Ten – July 11, 2008
- Catch up, Summary and Review – Although I would normally
accommodate the second midterm by ending class at 10:30 a.m., I will give you
the chance to vote on whether we hold forth in class right up to the noon
hour. Some of you may decide you
can use the extra time for review and questions. We’ll see.
SECOND MIDTERM: Chapters 23-27; July 11, 2008, Multiple Choice on
the Web; Essay/Problem due 5:00 p.m.
Days Eleven and Twelve– July 14 - July 15, 2008
Reading Assignments: Tregarthen/Rittenberg, Chapter 28
Behavioral Objectives for Chapter 28: After participating in lecture, reading Chapter 28, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Explain the factors that determine consumption and saving and the relationship between them.
2. Explain how consumption can be a determinant of real GDP and be determined by real GDP at the same time.
3. Explain how changes in C, I, G, and Xn can produce additional changes in consumption, amplifying the impact of these changes on aggregate demand.
4. Explain how tax policy can be used to change consumption and explain how such changes affect economic activity.
5. Solve a system of simultaneous equations that constitute a model of the macroeconomy. Use the model to analyze changes in equilibrium GDP.
6. Determine the MPC, autonomous consumption, and induced consumption from a graph or equation of the consumption function.
7. Distinguish autonomous and induced, and current income and permanent income.
8. Explain how and why policy effectiveness might be dependent upon whether the current income or the permanent income theory is correct.
9. Identify at least three different causes of shifts in consumption and explain why they occur.
10. Define and explain the multiplier effect.
11. Calculate the simple multiplier given a consumption-GDP graph or equation.
12. Use the multiplier to solve simple problems based on changes in autonomous expenditure.
13. Define equilibrium in the aggregate expenditures model.
14. Explain how a change in the price level would affect the aggregate expenditure line and demonstrate it graphically.
15. Explain the connection between the multiplier analysis
in the aggregate expenditure model and the aggregate demand curve.
Day Thirteen– July 16, 2008
Reading Assignments: Tregarthen/Rittenberg, Chapters 29 & 30
Behavioral Objectives for Chapter 29: After participating in lecture, reading Chapter 29, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Define investment, gross private domestic investment, net private domestic investment, and depreciation.
2. Understand the components of gross private domestic investment sufficiently to define them and recognize examples of them in newspapers and news reports.
3. Explain the rationale for the inverse relationship between investment and the interest rate.
4. Interpret an investment demand curve.
5. Identify the eight other factors that influence the level of investment as explained in the text and explain what a change in each would do to the location of the investment demand curve.
6. Explain the impact of a change in investment on aggregate demand, long-run aggregate supply, and short-run aggregate supply.
7. Illustrate the impact of a change in investment on the economy using the production possibilities model, using the aggregate supply and aggregate demand model, and using the aggregate expenditures model.
8. Explain how the Fed can affect demand through investment using monetary policy.
Behavioral Objectives for Chapter 30: After participating in lecture, reading Chapter 30, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
l. Read data from the
2. Identify which items on an instructor-made list are credits and which are debits in the balance of payments accounts.
3. Explain the components of the current account and the capital account.
4. Explain the rationale for free trade.
5. Provide two arguments against free trade and counter-arguments to them.
6. Explain the balance of payments identity that the balance on the current account must equal negative the balance on the capital account, including any assumptions that underlie it.
7. Evaluate the advantages and disadvantages of a current account surplus or deficit.
8. Evaluate the advantages and disadvantages of a capital account surplus or deficit.
9. List five factors that affect new exports.
10. Describe equilibrium in the foreign exchange markets.
11. Distinguish the free-floating exchange rate system, the managed-floating exchange rate system, and the fixed exchange rate system.
12. List and explain the advantages and disadvantages of the three main types of exchange rate systems described in the text.
13. Distinguish between the gold standard and the Bretton Woods system.
14. Derive the multiplier algebraically from an aggregate expenditure model expressed in equation form that includes autonomous exports and both autonomous and induced imports.
Day Fourteen: July 17, 2008
Reading Assignments: Tregarthen, Chapters 31 and 32
Behavioral Objectives for Chapter 31: After participating in lecture, reading Chapters 31, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Explain the Phillips curve tradeoff between inflation and unemployment.
2. Use the AD-SRAS model to explain how a negative relationship could exist between inflation and unemployment in the short run.
3. Use an AD-SRAS model to explain how a negative relationship could exist between inflation and unemployment in the short run.
4. Explain how expectations concerning inflation affect the relationship between inflation and unemployment.
5. Identify the determinants of inflation and the natural level of unemployment.
6. Explain why unemployment and inflation may at times rise or fall together while at other times they move in opposite directions.
7. Define the phases of the inflation-unemployment cycle.
8. Explain the distinctive critical behavior within each phase of the inflation-unemployment cycle.
9. Explain how an increase in unemployment insurance might increase the unemployment rate.
10. Explain why some firms might be willing and able to pay an above-market wage even in the long run.
11. Use the equation of exchange to generate the conclusion that in the long run only excessive monetary growth can cause inflation.
12. Use the equation of exchange to generate the conclusion that an increase in potential output can offset demand inflation.
Behavioral Objectives for Chapter 32: After participating in the lecture, reading Chapter 32, and doing the exercises in the relevant portions of the Tregarthen/Rittenberg web site and the study guide, you should be able to:
1. Explain the major economic developments of the 1930s, 1960s, 1970s, 1980s, and 1990s in the framework of the AD-SRAS model.
2. Contrast the interpretations of each period from the perspectives of the new Keynesian, monetarist, and new classical schools of thought.
3. Summarize areas of agreement and disagreement among the schools of macroeconomic thought today.
4. Explain distinctions between classical and new classical economists, Keynesian and new Keynesian economists, monetarists and supply-side economists, monetarists and new classical economists.
5. Trace the development and application of the following concepts through the 1990s: long-run macroeconomic equilibrium, flexible prices, natural rate of unemployment, expansion/contractionary fiscal policy, expansionary/contractionary monetary policy, expectations, supply-side policies.
6. Apply the aggregate supply and aggregate demand model to historic periods and data for analysis.
7. Identify schools of macroeconomic thought by interpreting graphs that show specialized assumptions of the various schools.
The Term
Paper is July 17, 2008 by 5:00 p.m.
Day Fifteen – July 18, 2008 - Review: In order to accommodate third and final midterm class will end at 10:30 a.m. THIRD MIDTERM emphasizes chapters 28-32 but includes all previously assigned chapters. NOTE: No Essay/Problem; 100 question multiple choice exam on the Web must be completed by 2:00 p.m.
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