MacroeconomicsMacroeconomicsDay 1Day 1

Dr. Andrew L. H. ParkesDr. Andrew L. H. Parkes““A Macroeconomic Understanding for use in A Macroeconomic Understanding for use in

Business”Business”

卜安吉卜安吉

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Syllabus and Our CourseSyllabus and Our Course

The syllabus provides an The syllabus provides an outline of what we will outline of what we will cover during the term: cover during the term: Chapters 23 through 33 Chapters 23 through 33 & 35 of the textbook.& 35 of the textbook.

This week we will talk This week we will talk about Chapters 23 & 24.about Chapters 23 & 24. The required textbook

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Lectures and Practice Lectures and Practice ProblemsProblems

Lectures:Lectures: 4 hours per week I will 4 hours per week I will introduce the new material to you.introduce the new material to you.

Practice Problems:Practice Problems: We will do We will do assignments from my slides and assignments from my slides and from the textbook.from the textbook.

You will have to prepare assignments You will have to prepare assignments for every class; there is NO class for every class; there is NO class without without homework (sometimes just reading). homework (sometimes just reading).

You will do You will do all of your own workall of your own work during during the course. the course. Copied assignments will be Copied assignments will be given 0 marks.given 0 marks.

Notice you must have access to WSJ, FT Notice you must have access to WSJ, FT (also investopedia.com – Forbes, etc.).(also investopedia.com – Forbes, etc.).

Keep up to date withEconomics related issues

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GradingGrading

Midterm Exam - 20%Midterm Exam - 20% Final ExamFinal Exam - 50% - 50% Homework Homework - 20% - 20% QuizzesQuizzes - 10% - 10%

Total Total - 100% - 100%

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Principles of MacroeconomicsPrinciples of Macroeconomics (Ch. 23) (Ch. 23) Nothing is required Nothing is required

to begin this course!to begin this course! Definitions: We know Definitions: We know

MANY of these MANY of these already!already!

Real GDP, CPI, GDP Real GDP, CPI, GDP deflator, deflator, Unemployment rate, Unemployment rate, ……

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Principles of MacroeconomicsPrinciples of Macroeconomics (Ch. 23) (Ch. 23)

A “snapshot” from A “snapshot” from The EconomistThe Economist online magazine: online magazine: http://www.economist.com/node/16909167http://www.economist.com/node/16909167 (China’s private vehicles are growing faster than the amount (China’s private vehicles are growing faster than the amount of express highways is growing. The growth rates are of express highways is growing. The growth rates are expressed in the graph above as the slopes of the lines.) expressed in the graph above as the slopes of the lines.)

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SEE MY WEBSITE: SEE MY WEBSITE: andrewparkes.comandrewparkes.com

1.1. Often and regularlyOften and regularly

2.2. Kept ahead of classKept ahead of class

3.3. Links and PPT Links and PPT

4.4. Other informationOther information

Like this =>Like this =>Total Public Debt Outstanding

$ 9,139,880,193,861.94 11/29/2007

3/19/2009 $ 11,039,686,130,898.10

9/06/2010 $ 13,442,057,367,029.28

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Yuan trades at what rate Yuan trades at what rate today?today?

See my website for articles we See my website for articles we discuss!discuss!

Three Goals of any Three Goals of any MACROECONOMYMACROECONOMY

– Full Employment – Unemployment RateFull Employment – Unemployment Rate

– Economic Growth – REAL GDPEconomic Growth – REAL GDP

– Price Stability - CPIPrice Stability - CPI

– KNOW what real GDP and CPI meanKNOW what real GDP and CPI mean

– Quiz next class!!! – 5 ptsQuiz next class!!! – 5 pts

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U. S. Real GDP 2005 - 2009U. S. Real GDP 2005 - 2009

http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm

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Personal Income & SpendingPersonal Income & Spending

http://www.bea.gov/newsreleases/national/pi/pi_glance.htm

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Trade Balance in the U.S.Trade Balance in the U.S.

http://www.bea.gov/newsreleases/international/transactions/trans_glance.htm

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Consumer Price Index 1999 - Consumer Price Index 1999 - 20092009

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KNOW WHO THE FED IS!?!KNOW WHO THE FED IS!?!

See my website if you need more See my website if you need more info …info …– PPT from week 2 or 3 IntroPPT from week 2 or 3 Intro– U.S. Macroeconomic SitesU.S. Macroeconomic Sites

People’s Bank of ChinaPeople’s Bank of China– Website is available from mineWebsite is available from mine– Know who they are and what they do!Know who they are and what they do!– These are the most important financial These are the most important financial

institutions in this class!institutions in this class!

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Geographic Distribution of Geographic Distribution of Unemployment,Unemployment,

July 2009July 2009

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Problem Set 1: GraphingProblem Set 1: Graphing Price Price

Floors Floors and and CeilingsCeilings

Demand Demand and and Supply Supply changeschanges