UNIVERSITY OF MAURITIUS MODULE SPECIFICATION SHEET 1.

GENERAL INFORMATION Macroeconomics examines the economy as a whole and answers questions such as 'What causes the economy to grow over time?', 'What causes short-run fluctuations in the economy?' 'What influences the values various economic indicators and how do those indicators affect economic performance? In contrast to Microeconomics which considers the decisions made at an individual or firm level, Macroeconomics considers the larger picture, or how all of these decisions sum together. Academic Year: 2011-2012 Semester(s): 2 Title MACROECONOMICS Code 1211 Duration (hrs) Lectures: 2 hours No of credits 3

2. PRE-REQUISITE(S)/PRE-REQUIREMENT(S) Students are expected to have followed Microeconomics 1111. 3. AIMS Welcome to the course Macroeconomics, ECON 1211. On completion of this module, students are expected to have an understanding of how the economy operates at the macro level. The module discusses the basic macroeconomic framework which is used to understand how economic variables such as national income, employment, investment, exports are determined. Students will also acquire an understanding of fiscal and monetary policies as well as other economic concepts, techniques, and will be expected to analyse the macroeconomic environment within which economic agents, firms, and government operate. 4. OUTLINE SYLLABUS Macro-Economics Policy; Measurement and Determination of National Income; Fiscal Policy; Theory of Money; International Economics. 5. LEARNING OUTCOMES Having studied this module, the students should be able to: (1) to explain the macroeconomic framework of the economy; (2) to discuss the determinants of economic variables such as national income, consumption, investment, etc (3) to discuss the effects of government intervention, fiscal and monetary policies on the economy; and (4) to explain the relationship between economic variables and international trade;

6. COORDINATORS: Programme Coordinator Name Department Building Room Number Phone No. E-mail address Consultation Time 7. LECTURER(S) Name Department Building Room Number Phone No. E-mail address Contact Hours Consultation Time Contact Address (For P/T) 8. VENUE AND HOURS/WEEK All lectures and/or Practicals will normally be held in Room: 2.11 NAC Hours/week: 2 9. MODULE MAP Wk(s) Hr(s) Lecture Title(s) 1 2hrs Introduction to macroeconomics and national income accounting The circular flow of income (firms and households, savings and investment, closed economy with government and open economy) 2 2hrs Concepts of national income, What GNP actually measures (standard of living and national income measurement) Measurement of GDP-the different approaches to measure GDP The determination of national income Consumption demand and saving function (MPC and MPS); investment DR. H. KASSEEAH ECONOMICS AND STATISTICS FSSH G6 4037705 h.kasseeah@uom.ac.mu 30 Wednesday 13-14.00 Or by appointment Area Coordinator (if applicable) Module Coordinator

2hrs

 4 2hrs

spending Aggregate demand function- aggregate expenditure function: equilibrium output in AE framework; The Multiplier

2hrs

2hrs

2hrs

2hrs

2hrs

10 11

2hrs 2hrs

12

2hrs

Equilibrium in withdrawal-injection approach; The multiplier The paradox of thrift Aggregate demand, fiscal policy and foreign trade Introduce government in the AE framework; Multiplier + balanced budget multiplier Government budget Government in withdrawal-injection framework Automatic stabilisers and discretionary policy National debt and deficit Foreign trade and income determination: MPM Foreign trade in withdrawal-injections framework Concept of twin deficits Money and modern banking Money and its functions Origins of money Modern banking and commercial banks Credit creation, assets and liabilities of commercial banks; fractional reserve banking Monetary base and money multiplier Central Banking and monetary system Central bank and money supply Reserve requirements; discount rate; open market operations; Central bank as the government banker; banker commercial banks Demand for money: transactions, precautionary and speculative Money market in equilibrium: LM curve Monetary and fiscal policy in a closed economy Transmission mechanism IS-LM Unemployment Types of unemployment causes, supply side economics, cyclical hysteris, costs of unemployment Test week Inflation The Phillips curve, causes of inflation; quantity theory of money; inflation, money and deficits Costs of inflation; unanticipated inflation Open economy macroeconomics Exchange rate determinations

13 14

2hrs 2hrs

15 10.

2hrs

Balance of payments; effects of devaluation International trade and commercial policy The theory of comparative advantage; factor endowments Protectionism Economics of tariff Welfare implications of a tariff Quotas and non-tariff barriers; Revision and closing

RECOMMENDED BOOKS/JOURNALS/WEBSITES

There is no one specific textbook for this module. The recommended textbooks are: Economics 8th Edition [Begg, Fischer, Dornbusch] Economics 7th Edition [John Sloman] 11. (i) ASSESSMENT Written Examination Paper Structure Sections (if any): A and B Exams date: Weighting (%): 70 Total Marks: 100 (ii) Continuous Assessment Weighting (%) Test(s): Total Marks: 30% 30 No. of questions to be answered: 3 questions, at least 1 from each section Paper Duration: 2 hours Pass Marks: 40%