Prerequisites (applies to degree students only)EC1002 Introduction to economics and either MT105A Mathematics 1 or MT1174 Calculus.
This syllabus covers the main principles involved in the determination of real income, employment and unemployment, the price level and inflation in an open mixed economy, and the conduct of macroeconomic policy.
The main topics are:
Aggregate demand in a closed economy: the determinants of consumption, investment, demand for and supply of money; wealth effects; the IS-LM model and policy prescriptions.
Aggregate demand in an open economy: exchange rate regimes, international trade and capital flows, and external balance; the IS-LM-BP model and policy prescriptions.
Aggregate demand, aggregate supply and the price level: the aggregate demand curve; short and long run aggregate supply curves; the aggregate demand-aggregate supply model and its applications to the determination of the price level and real income, and demand management policy; the neo-classical (Solow) growth model.
Inflation and unemployment; models of inflation; costs of inflation; counter-inflationary policy; full employment and the natural rate of unemployment; types and causes of unemployment, and policies to reduce them.