Spring 2013 Course Outline ECONOMICS 205-Principles of Macroeconomics University of Southern California, Department of economics #26062R Tue, Thu

12:30-1:45 pm, MHP-106

Manochehr Rashidian Office Hours: Mon, Wed 12:00 - 1:00 p.m., KAP 116B rashidia@usc.edu Email:

TA: Office Hours: Email Address:

Course Objectives: 1. To provide students with a comprehensive knowledge of macroeconomics concepts and theories. 2. To assist students in using these theories and concepts as management decisionmaking tools. 3. To familiarize students with the dominant schools of economic thought. 4. To provide students with the necessary background in order to predict the short-run and the long-run effects of fiscal and monetary policies. 5. To understand the working of financial institutions and their role in economic stabilization.

Course text: rd Macroeconomics by Paul Krugman and Robin Wells, 3 Edition. Study Guide (optional, recommended) Book Companion Site for Macroeconomics by KW: http://bcs.worthpublishers.com/krugmanwellsmacro3/default.asp#t_768077____ The book companion site serves students as a free online study guide. It contains self tests, quizzes, flash cards and other helpful tools. Students are encouraged to explore the companion site.

Examinations and Homework: The list of homework assignments from the end of chapter problems and questions is on the last page of the syllabus. Homework assignments must be turned in on time and typewritten. There will be no credit for late homework once solutions are posted online. Homework and class participation are worth 20% of the course grade. There will be 3 midterm exams and a final exam. Midterm exams are non-cumulative and consist of multiple choice and possibly short answer questions. Your midterm exams accounts for th 51% (approximately 17% each) of the course grade. Midterm exams are usually during 5 , th th 9 , and 13 week of instructions. The exact dates for the midterms will be announced in class at least 7 days in advance. Although the midterm exams are non-cumulative, most chapters build on previous ones. Hence, to do well on the exams, students should carefully review the previous chapters. The final exam counts for 29% of the course grade and will th cover selected chapters. Your final Exam is on Wednesday May 15 , 2-4 p.m.

Policy on Missed Exams: Students must take the exams as scheduled. There will be no make-up exams unless a student has a valid medical excuse and can provide documentation for such an excuse, or if a student cannot take the exam because of extenuating circumstances, and prior arrangements are made with the instructor if possible. The student will receive zero credit for unexcused missed exams. Student will receive an F for course if final exam is missed for unexcused absence regardless of students performance during the semester. If a student has a valid reason for missing the final exam, and can document it, he/she will be awarded an incomplete. From DSP Office: Students requesting academic accommodations based on a disability are required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP when adequate documentation is filed. Please be sure the letter is delivered to me (or to TA) as early in the semester as possible. DSP is open Monday-Friday, 8:30-5:00. The office is in Student Union 301 and their phone is (213) 740-0776. Academic Dishonesty: The academic integrity violation under student conduct code is described as: Cheating on examinations such as communications with fellow students during an exam, copying material from another students exam, allowing another student to copy from an exam, taking an exam for another student, use of unauthorized material or device during exams, and/or any behavior that defeats the intent of an exam or other class works. I will always seek maximum penalty allowed in the event of cheating. Grading: The course will be graded on regular scale of 100% unless class average falls short of my expectations. In that case, I will use a curve based on the average grade of students who actually complete the course. Note: 1- To prevent disruptions in lecture, students should come to class on time. 2- Attendance is mandatory. Missing class will reduce your homework points. 3- Students are advised to take notes during class, because exam questions are mostly on the subjects discussed in the class. You should also know that your notes are not substitutes for the text. 4- Students should be aware that this course is designed in such a way that knowledge of the prerequisites is essential to passing the course. Topics: Chapter 1: What is Economics- A brief overview of the principles of economics Chapter 2: Economic models and the role of assumptions, Absolute and comparative advantage and gains from trade Chapter 3: Demand and Supply-Shifts of demand and supply curves, Equilibrium and changes in equilibrium Chapter 4: Price control, Quantity control, inefficiencies and deadweight loss. Chapter 6: Introduction to macroeconomics, Business cycles, Economic growth, recession and expansion Chapter 7: National income accounting, GDP and its calculation, Price Index

Chapter 8: Measuring unemployment, CPI and inflation. Causes of unemployment Chapter 9: Long-Run economic growth, Sources of economic growth Chapter 10: Savings and Investment, Financial system, Financial fluctuations Chapter 11: Income and expenditure, Interest rate and investment, Spending multiplier Chapter 12: Aggregate demand, Aggregate supply Model, Long-Run macroeconomic equilibrium. Chapter 13: Fiscal Policy, Long run and short run implications of fiscal policy, Budget deficit and national debt Chapter 14: Money and its functions, the measuring money of money, Monetary role of banks and the Federal Reserve system. Chapter 15: Federal Reserve System and tools of monetary policy, Money demand and supply and equilibrium interest rate, .Money and its relation to aggregate output, Short run and long run effects of monetary policy Chapter 16: Business cycles and unemployment, Causes of unemployment, Phillips curve in sort run and long run, Money and inflation, effects of inflation and hyperinflation

Homework Assignments: Chapter 1 2 3 4 6 7 8 9 10 11 12 13 14 15 16

Problem 3, 4, 7, 9, 12, 13 1, 3, 6, 7, 9, 11 1, 4, 5, 7, 10, 12, 15, 17 2, 4, 7, 8, 9, 10 2, 3, 5, 8, 11 3, 5, 6, 7, 11, 14 2, 5, 9, 11, 12 2, 4, 9, 11, 14 3, 4, 6, 7, 8, 11, 14, 16 2, 5, 8, 9, 11 1, 3, 5, 8, 14, 15 1, 5, 6, 8, 10, 12, 15 2, 4, 5, 7, 8, 10, 12 3, 5, 7, 8, 11 1, 4, 5, 7, 8, 11