BUSN1008 Introductory Macroeconomics

2016

4.5

1 x 2-hour lecture weekly
1 x 1-hour tutorial weekly

Bachelor of Business; Bachelor of Commerce

This topic provides an introduction to aggregate economic behaviour. It looks at simple models of income determination, the money market, aggregate demand and supply, the labour market, and the international economy. Two major concerns of the topic are the nature and causes of economic fluctuations, and how central government is able to influence the level of employment and the rate of inflation through the use of monetary and fiscal policies.

The aim of this topic is to provide students with a basic grounding in the principles and concepts of macroeconomics, including an understanding of the determinants of short run economic fluctuations and of long run economic growth. Key variables to be discussed include gross domestic product, employment and unemployment, interest rates, inflation, aggregate demand and aggregate supply, investment, growth in productivity, and the relationship of these variables to living standards and the overall welfare of society. The topic will also introduce students to simple models which illustrate how the central government can influence economic outcomes through the use of monetary and fiscal policies.

Students completing this subject should be able to:

• understand the concept of economic growth and its significance in determining living standards;
• appreciate the determinants of economic growth over the long run, most especially the role of growth in productivity;
• understand the nature of short run economic fluctuations, in terms including GDP growth, employment and unemployment, and inflation;
• understand what is meant by 'fiscal policy' and 'monetary policy';
• appreciate the causes of economic fluctuations and how the central government can influence economic outcomes through the use of monetary and fiscal policies;
• understand the functions of money, and the inter-relationships of money, interest rates, aggregate demand and inflation;
• critically analyse current economic conditions and government macroeconomic policy initiatives.