PRINCIPLES OF ECONOMICS: MACROECONOMICS (ONLINE)

Instructor: Dr. Edward G. Creppy

Email: edward.creppy@comcast.net (mailto:edward.creppy@comcast.net)

Office: Northern Virginia

Office Hours: The best way to reach me is via email and I will respond within 24 hours.

Instructor Bio:

Dr. Edward Creppy obtained his BS in Accounting from City University of New York. He went

on to earn a MA in Finance from St. Johns University, and a MA and Ph.D in Economics from

American University. Dr. Creppy is currently in the process of completing an M.Ed in Adult

Education and Development.

His professional experience includes over 15 years in the teaching field and more than 15 years

working in non-teaching positions. Prior to moving into academia, he worked for several

organizations including the Population Council, NAFTA, and most recently, the World Bank. His

primary responsibility as an Economist at the World Bank was analyzing data in order to

formulate policy recommendations to help developing economies enhance their economic

performance.

Being a product of an Adult Degree Program himself, Dr. Creppy has an added appreciation for

the enormous sacrifices involved in adult learning. In fact, it has defined his teaching

philosophy. He believes that a prerequisite for effectively engaging an adult learner and

helping them succeed is to have a clear understanding of their educational objectives along

with an understanding of the challenges they face in achieving that objective. Unlike students

found in traditional college settings, adults must balance the demands of school, with work

UCLA • UCLA EXTENSION • HUMANITIES & SCIENCES • SOCIAL SCIENCE

and in most cases, family responsibilities as well. To ease any anxieties, Dr. Creppy establishes

a friendly and open atmosphere for students, and constantly provides positive reinforcement in

the course of the learning process.

Welcome:

My name is Dr. G.E. Creppy and I would like to extend my warmest welcome to all of you for

registering to take Principles of Macroeconomics (ECON XL 2) with me this quarter. For those

of you who have decided to return to school to continue your formal education, I am proud of

you and especially delighted that you have chosen to do so at UCLA Extension.

These are exciting times to study Economics and my goal for this course is to make your study

of economics exciting, relevant to your professional goals and useful in everyday life. I believe

this is possible because the fundamental principles of economics - supply, demand,

opportunity costs, marginal analysis, competition, incentives, and markets - have a connection

to almost every sphere of human experience. Properly presented and understood, these

principles can have a significant effect on your understanding of the world.

As part of the course, you will learn various theories explaining the causes and consequences

of unemployment, inflation, economic growth and international trade. Close attention will be

given to the identification of real-world economic problems and the development of practical

policy solutions to those problems. This implies that the course will analyze and critically

assess the economic consequences of policy proposals to enable you to participate more

knowledgeably in economic and, more importantly, political decision-making. For example,

politicians, especially from the two main political parties in the U.S, regularly engage in fierce

political debates about the right prescriptions to address economic issues. How can you

assess the individual claims made by such political groups? This course will provide a basic

understanding of how economic indicators can be interpreted to verify some of those claims.

Principally, the course will explain how to read the indicators, cut through any political hype

and draw unbiased conclusions about the economic and social implications of politically

motivated but economically untenable policy prescriptions.

By the end of this course, I am hopeful that you will be in a position to understand the

economic world that unfolds each day in the 24 hour news cycle as well as appreciate the

importance of Economics in your professional and personal life.

It would be a great pleasure for me personally to see you succeed in this course. To this end, I

encourage you to reach out, without hesitation, if you have a question, a concern, or need

clarifications on any issue pertaining to this course. I am enthusiastically looking forward – and

hope you are - to a fun and productive quarter.

Best regards and see you in class,

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DESCRIPTION

OBJECTIVES

Dr. Edward Creppy,

Adjunct Faculty, Economics

UCLA Extension Office of Instructional Enhancement

Support

Email: support@unexonline.zendesk.com (mailto:support@unexonline.zendesk.com)

Phone: Toll-free at (866) 269-7289 (US only) or (310) 206-4563.

Monday - Friday, 8am to 6pm (Pacific Time).

Website: http://support.uclaextension.edu/ (http://support.uclaextension.edu/)

The UCLA Extension course management team assists both students and instructors with

Canvas-related technical support, as well as general administrative questions.

For support on learning more about Canvas or addressing a technical issue:

Click on the “Help” link in the upper right corner of the screen from within the

Canvas LMS, where you can chat live with a live technical support agent or submit

a ticket for assistance.

Or visit the Canvas Help Center: https://help.instructure.com/home (https://help.inst

ructure.com/home)

This introduction to the principles of economic analysis, economic institutions, and issues of economic

policy emphasizes the determination of key macro-economic variables using simple models and

concepts. Instruction covers the definition of gross domestic product, inflation, interest rates, and

exchange rates. Students are exposed to relevant world issues, such as the causes and consequences

of economic growth, unemployment, inflation, and public and trade deficits. Cross-country

comparisons enable students to understand the disparities in economic conditions between developing

and developed countries. The course concludes with the study of short-run economic fluctuations.

1. Define Economics, identify the basic principles that underlie the study of Economics and

describe the approach used by Economists to solve economic problems.

2. Explain the economic theory that drives trade among nations and discuss the benefits

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nations derive from trading with each other.

3. Identify the determinants of Supply and Demand and demonstrate the impact of shifts in

both market Demand and market Supply curves on Equilibrium Price and Quantity.

4. Define and measure National Income and the Rates of Unemployment and Inflation.

5. Define Economic Growth, identify the sources of Growth and discuss the reasons for

differences in the development performance of countries.

6. Identify the phases of the Business Cycle and the problems caused by Cyclical Fluctuations

in the market economy.

7. Define Money and describe the creation of Money by the Banking System.

8. Construct the Aggregate Demand and Aggregate Supply (AD-AS) model and use it to

illustrate macroeconomic problems and potential Fiscal Policy and Monetary Policy

solutions.

9. Examine the basic features of an open macroeconomy, develop a model that demonstrates

the relationship between the market for Loanable Funds and the Foreign Exchange market

and assess the implications of government policies on the Rate of Exchange and the

Balance of Trade.

10. Demonstrate knowledge of macroeconomic concepts taught in the course by analyzing data

on selected countries, writing reports on the economic performance of the countries under

observation and offering policy proposals designed to improve the macroeconomic

performance of the countries.

Weekly Learning Objectives:

Introduction - Chapters 1, 2 and 3:

Explain the economic principles that characterize individual decision-making, motivate

people to trade with one another, and form the basis of how the entire economy functions.

Describe the kinds of questions economists try to answer when they perform scientific

enquiry and identify the ideas that define their way of thinking.

Distinguish between the concepts Comparative Advantage and Absolute Advantage and

illustrate how the Specialization associated with the theory of Comparative Advantage can

lead to mutually beneficial gains in Trade.

Chapter 4: The Market Forces of Supply and Demand

Distinguish between Quantity Demanded and Demand and explain the factors that

determine Demand

Distinguish between Quantity Supplied and Supply and explain the factors that determine

Supply

Explain how Demand and Supply interact to determine Price and Quantity in a market, and

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describe the effects of changes in Demand and Supply.

Chapter 23: Measuring A Nation’s Income

Define GDP and calculate it using the Income and Expenditure methods.

Distinguish between Nominal and Real GDP.

Describe the uses of Real GDP and explain its limitation as a measure of Output and the

Standard of Living.

Chapter 24: Measuring the Cost of Living

Construct the Consumer Price Index and assess its use as a measure of the Cost of Living.

Adjust money values for Inflation and calculate Real Wage rates and Real Interest rates.

Chapter 25: Production and Growth

Describe the determinants of Productivity and analyze its effects on the Standard of Living.

Examine some policy actions that can accelerate the Growth performance of an economy.

Chapter 25: Saving, Investment and the Financial System

Identify the key features of financial institutions and explain their role in coordinating the

activities of borrowers and savers.

Describe the market for Loanable Funds and examine its use in analyzing government

policies that affect the economy's Saving an Investment.

Chapter 26: Unemployment

Explain how Unemployment is measured and identify the difficulties associated with its

measurement.

Describe the types of Unemployment and the factors that influence them.

Define the Natural Rate of Unemployment and examine the factors that influence it.

Discuss the factors that influence changes in the Labor Force Participation Rate and assess

their implications for economic performance.

Chapter 29: The Monetary System

Define Money and explain its functions.

Describe the structure of the Federal Reserve and explain how it uses its Monetary Policy

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tools to control Money Supply.

Examine the problems associated with controlling Money Supply

Chapter 30: Inflation and the Quantity Theory of Money

Identify the causes and costs of Inflation

Explain the Quantity Theory of Money and describe how it establishes a relationship

between Inflation, Money, Real Output and Prices and how it informs the critical role Money

Supply plays in regulating the level of prices.

Chapter 31: Open Economy Macroeconomics: Basic Concepts

Describe the measures of Trade and Capital Flows.

Explain how Exchange Rate is determined and why it fluctuates.

Chapter 32: A Macroeconomic Theory of the Open Economy

Develop a model that explains how an economy’s Balance of Trade and Exchange Rate are

determined.

Use this model to assess the effect of government policies and other events on the variables

in the model.

Chapter 33: Aggregate Demand and Aggregate Supply

Discuss the main features of Short-Run fluctuations in economic activity.

Develop the AD-AS model and illustrate how shifts in either the AD or AS curve can cause

fluctuations in the economy’s overall Output and Price levels.

Chapter 34: The Influence of Monetary and Fiscal Policies on Aggregate Demand

Analyze the Short-Run effects of Monetary policy actions on Aggregate Demand, Production

and Employment in the Short-Run.

Analyze the Short-Run effects of Fiscal policy actions on Aggregate Demand, Production

and Employment in the Short-Run.

Chapter 35: The Short-Run Trade-Off between Inflation and Unemployment

Explain the historical evolution of the theory on Inflation-Unemployment trade-off.

Analyze the Short-Run and Long-Run performance of this Trade-Off and the policy challenges posed by

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OUTCOMES

MATERIALS

it.

Upon completion of this course, students will be able to:

1. Apply basic economic principles to daily decision-making - personally and professionally –

as demonstrated in responses to Discussion Questions.

2. Perform a written critical analysis of a news article to demonstrate familiarity with current

economic events.

3. Analyze data provided by St. Louis Federal Reserve to Identify U.S economic problems and

develop practical policy solutions to those problems.

4. Demonstrate knowledge of concepts taught in the course by offering a written analysis of

proposed policy prescriptions by opposing politicians.

5. Analyze data provided by the World Bank on select countries and write a report offering

policy proposals designed to improve macroeconomic performance.

Required Resources:

1.Textbook:

Principles of Economics

Author: N. Gregory Mankiw

Publisher: Cengage

Edition: 7th

The following are the ISBNs for various versions of the Textbook:

Regular Traditional (Fully Bound Text):

ISBN-10: 1-285-16592-6

ISBN-13: 978-1-285-16592-9

2. Microsoft Office (MS Word, MS Excel, MS PowerPoint)

3. Calculator: You will be required to do some calculations on some of the homework

assignments. It is not necessary to purchase a calculator for this purpose if you are proficient

enough in MS Excel to do the calculations. However, if you are not comfortable using MS Excel

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it may be necessary for you to purchase a basic calculator.

Recommended Materials and Reading:

Subscription to The Economist:

The Economist is one of the best magazines which provides intellectually sound and relatively

unbiased accounts of contemporary economic issues. Students are highly encouraged to

subscribe to the print or digital versions at the Economist Website. (http://bit.ly/1AvTGDj)

Newspapers: The following are widely considered as the top ten newspapers in the

U.S in terms of the quality of the reporting and the extent of the circulation. There is

no need to subscribe to them, as you can find them online or freely available at your

local public or campus libraries:

The New York Times (New York)

Daily News (New York, New York)

Washington Post (Washington DC)

New York Post (New York)

Los Angeles Times (California, Los Angeles)

USA Today (National, Arlington, Virginia)

Chicago Tribune (Illinois)

Boston Herald (Massachusetts)

St Louis Post-Dispatch (Missouri, Saint Louis)

Wall Street Journal (New York, New York)

Additional resources that will enhance the learning experience of the student include the

following:

EconTalk podcast (http://www.econtalk.org/). This weekly podcast – active since

2006 – is strongly recommended for its interviews with notable economists,

authors, and entrepreneurs, and for its skeptical inquiry into issues in modern

economics and policy.

Freakonomics (http://www.freakonomics.com/): This book is a collection of articles

using unorthodox ways, not usually found in traditional economics textbooks to

explain economic concepts that are sometimes difficult to grasp.

Khan Academy: (http://bit.ly/1jX1vcF) Macroeconomics (http://bit.ly/1jX1vcF). Khan

Academy offers practice exercises, instructional videos, and a personalized learning

dashboard that enables learners to study almost any subject at their own pace.

Many of the presentations in Khan Academy are well organized and can provide a

great basic understanding of the concepts covered in this course.

Investopedia (http://www.investopedia.com/): This resource offers a comprehensive

financial dictionary online and provides educational content and tools to help

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DELIVERABLES

educate the individual investor. It will provide a basic understanding of many of the

economic and finance terms used in the text.

Greg Mankiw's Blog (http://gregmankiw.blogspot.com/); By Greg Mankiw

http://freakonomics.blogs.nytimes.com (http://freakonomics.blogs.nytimes.com): by

Steve Levitt and Stephen Dubner

The Conscience of a Liberal (http://krugman.blogs.nytimes.com/): Paul Krugman

Technology/Equipment Requirements:

Computer with audio capabilities

Internet connection—preferred browsers: FireFox, Google Chrome, Explorer, Safari

UCLA Extension Administrative Contact for this Course:

Ms. April Michelle Enriquez

Email: aenriquez@uclaextension.edu

Office: Department of Humanities and Sciences

Phone: (310) 825-7093

Course Elements

Lectures: The PowerPoint Slides accompanying the text will be made available to you on a

weekly basis. When necessary, I will also provide additional lecture notes to shed more light on

various concepts. Please consider the slides as supplements to be used in conjunction with

the textbook.

Multimedia Resources: When necessary, I will provide videos from various sources to

reinforce basic concepts underlying the chapters covered each week, and to accommodate

the learning styles of students who may be more comfortable with a visual presentation of

materials.

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Discussion Questions: To reinforce concepts discussed in the text, you will be required to

participate in weekly discussions on a variety of topics carefully selected to test your

understanding of the theoretical concepts presented each week. Please note that these

discussion questions are designed to not only test your ability to effectively communicate your

knowledge of these concepts, but to also effectively provide meaningful feedback to your

fellow classmates. Your initial discussion responses and your classmate replies will help build

your skills in economic analysis as well, which will help prepare you for advanced academic

work, and in your professional career.

You should make the commitment to post your responses for discussions by the

due date each week. The classroom should be active all week -- not just on

weekends. Pacing your work earlier in the week will give you more time for larger

projects when you need it. Your postings should incorporate responses to your

peers, your opinions, pertinent information from things that you’ve read, and

examples from your experience. Your responses should include more than phrases

such as "I agree with that" or "Interesting comment." Please consult the grading

rubric for specific details.

Your posts should feature good writing, correct spelling and mechanics. We judge

one another substantially by the quality, clarity and depth of our writing.

Communication should be professional and students must make an effort to use

good netiquette. In the spirit of scholarly discussion, I expect responses that both

agree and disagree with others, as long as they apply to the topic and are

respectfully presented. In our learning model, the heart of active learning occurs

through the discussions that help you test your ideas, reinforce what you have

learned, and share resources with others in the class.

Please Note: Initial responses to discussion questions are due each Thursday

by 11:59 pm PST. Classmate responses are due each Sunday by 11:59 pm

PST. Failure to post your response by the deadline will earn you zero points

for that portion of the discussion. See the rubric located in the Course

Syllabus for additional information on grading criteria for discussions.

Homework Assignments: Students will be required to complete a Homework Assignment for

each chapter covered. See the Tentative Course Outline for specific due dates.

Written Assignments:

Overview

As discussed in Chapter 1 of the text, data analysis is an indispensable part of the study of

economics, and plays a significant role in the formulation of economic policy. The course

description, as provided by UCLA Extension, also requires a measure of proficiency in crosscountry

comparisons that would help you understand economic disparities that exist between

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developing and developed countries. To achieve these objectives, the written assignment

component of this course will be based on the exploration, analysis and reporting of the

performance of real-world economic variables to reinforce concepts taught in each chapter.

The expectation is that at the end of the term, your new found ability to extract, manipulate,

and understand economic and financial data will be an enduring benefit from taking this

course.

From Week 1through Week 10 you will be serving as the Chief Economic Advisor to the

President. Your duties in this position will include providing a weekly briefing to the President

on domestic and international economic issues.

Your Job Description:

1. Advise on Domestic Economic Policy Issues:

You will explore, analyze and report on the time series performance of selected

economic variables compiled by the Federal Reserve Bank of St. Louis. This

database, also called FRED (Federal Reserve Economic Data) is an interactive,

user-friendly data exploration tool which provides access to nearly 140, 000

economic time series from more than 50 data producers.

2. Advise on Foreign Economic Policy Issues:

You will report on the findings of a comparative analyses of four countries which cut

across income (Low Income - LIC; Middle Income – MIC; and High Income – HIC)

and vary by their regional location (Sub-Saharan Africa – SSA; Europe and Central

Asia – ECA; South Asia – SA; East Asia and Pacific – EAP; Latin America and the

Caribbean – LAC; and North America - NA. The data needed to perform these

analyses will include macroeconomic variables and social indicators obtained from

the World Development Indicators (WDI – World Bank).

To familiarize yourself with the economic profile of the countries you chose for your

analysis, you will be expected to read a brief country profile at the website of the

World Factbook (CIA).

Analyze data and report on the performance of all countries in the world based on

the relationship between two variables. To perform this analysis, you will use the

website Gapminder.org which provides an interactive data analysis tool that

displays time series of development statistics for all countries of the world.

Note: Countries with a high GDP per capita tend to have institutions that incentivize selfinterested

economic actors to invest in physical capital, human capital, and technological

knowledge and to efficiently organize these resources to produce valuable goods and

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services that people need. There is a considerable agreement among Economists that

institutions that encourage investment and the efficient organization of the factors of

production include property rights, honest government, political stability, a dependable

legal system, competitive and open markets all of which also help create a climate highly

conducive for investment.

Perform a comparative analysis of the countries chosen and report on our findings.

This part of your assignment will require the use of two sets of databases: the World

Governance Indicators (World Bank) and Doing Business (World Bank). Both of

these databases are interactive and user-friendly.

Use the Doing Business Reform Simulator (World Bank) to determine the current

ranking of the countries you are analyzing and identify ways to improve the

business climate of one of the countries chosen (LIC) by simulating reforms

(improvements) to any one or several of the 10 topics (covering 31 indicators) used

by the World Bank to construct the ranking of countries.

3. Policy Recommendations: Write a report that summarizes your observations in #2

(A, B, C, D, & E) and propose policy prescriptions needed for the LIC to improve its

Investment Climate and performance on its Social, Economic and Governance

indicators so as to promote growth and development.

Note: Specific instructions and a more detailed guidance in developing and writing

these papers will be provided in a written assignment package that would be made

available in Canvas.

In addition to the requirements stated for discussion postings, your written assignments

will be graded based on their depth, (meaningful analysis of your ideas), Breath

(demonstrated understanding of the concepts relevant to the written assignment), clarity

(lucid and correct use of language in the development of a cohesive analysis), and

relevance (application of key concepts taught in this course).

All Written Assignments must be double spaced, with normal margins using a 12 point

font (black) in Times New Roman. All assignments should be submitted as Word

documents with extensions of .doc or.docx. If the assignment requires the use of an Excel

spreadsheet, students will be required to use only spreadsheets with extensions of .xls or

.xlsx.

Midterm: The Midterm will be cumulative; covering all chapters taught prior to the exam date,

as specified on the syllabus and must be completed by 11:59 PM PST on Sunday, November

1, 2015. No make-up exams will be given.

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