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Introductory Macroeconomics
Semester 2, 2011

Coordinator: Dr Mark Melatos
Phone: 9036 9257, Email:
Office: Room 335, Merewether Building
Consultation Time: Monday 2-4pm

Lecturer: Dr Debajyoti Chakrabarty
Phone: 9351 3670, Email:
Office: Room 360, Merewether Building
Consultation Times: tba
Tutorial and Course Administrator: Bonnie Nguyen
Phone: 9351 2840, Email:
Office: Room 345, Merewether Building
Consultation Times: tba

Lecture Times and Venues:
Stream 1: Monday 10am-12pm (Merewether Lecture Theatre 1)
Stream 4: Wednesday 11am-1pm (Merewether Lecture Theatre 1)
Stream 5: Thursday 11am-1pm (Merewether Lecture Theatre 1)
Stream 6: Friday 11am-1pm (Merewether Lecture Theatre 1)
(NB: Streams 2 and 3 have been discontinued.)

1. Unit of study information
1.1. School handbook description
Introductory Macroeconomics addresses the analysis of the level of employment and economic
activity in the economy as a whole. It is a compulsory core unit for the Bachelor of Economics and
an alternative core unit for the Bachelor of Economic and Social Sciences. Introductory
Macroeconomics examines the main factors that determine the overall levels of production and
employment in the economy, including the influence of government policy and international trade.
This analysis enables an exploration of money, interest rates and financial markets, and a deeper
examination of inflation, unemployment, and economic policy.
1.2. Pre-requisite units
There are no pre-requisite units of study for this unit.

1.3. Assumed knowledge or skills
Prior knowledge of macroeconomics is not required for this unit of study. However, students are
expected to be familiar with basic algebra, graphical analysis and very simple economic concepts
such as opportunity costs. Reading chapters 1 (and chapter 1 appendix) & 2 of the main text is
strongly encouraged to refresh your memory or to provide you with the basic tools you will need
for this unit.

ECON1002 Introductory Macroeconomics
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1.4 Learning situation and assessment overview
There will be one 2 hour lecture and a 1 hour tutorial per week. Students must attend their
designated tutorial class. The assessment comprises online quizzes (10%), an essay (15%), a
mid semester exam (25%) and a final exam (50%). See section 5 for details.

2. Learning objectives and outcomes
For graduate attributes, visit the website
2.1. Aims of the unit
This Unit of Study introduces students to fundamental macroeconomic concepts and
models. In this way, it provides a basic framework with which to analyse the aggregate
behaviour of the economy as well as government policies affecting national income,
consumption, investment, inflation, unemployment, external balances and exchange rates.

2.2. Learning outcomes
On successful completion of this subject students should be able to:
Interpret the meaning and measurement of macroeconomic aggregates such as Gross
Domestic Product and Inflation;
Explain and use the Keynesian model of national income determination;
Describe the roles of money and the financial system in the macroeconomy;
Critically analyse macroeconomic policies appropriate to the achievement of the
macroeconomic objectives;
Explain and apply the aggregate demand/aggregate supply model;
Explain what determines unemployment and inflation;
Explain analytically the long run determinants of a nations standards of living and use the
analytical tools to discuss government policies
Analyse the factors influencing the balance of payments and the exchange rate.
Understand a day-by-day macroeconomic issue and critically evaluate current
macroeconomic policies.
2.3. Learning and teaching activities
Lectures: Regular attendance at lectures is a first step toward a successful learning outcome.
Students are strongly encouraged to attend all lectures and are expected to spend at least an
hour to read through the lecture notes/related textbook chapters before they come to lectures.
Important announcements may often be made in lectures. You should not expect to
instantaneously "understand" all the material in each lecture; that will almost certainly require
you to go away from the lecture and think carefully about what you have heard and been shown,
assimilate further material from the textbook, actively participate in the tutorial program and
work diligently through quizzes. Lecture overheads will be posted onto the course website in
advance of each lecture. Note that lecture overheads will not be thorough or complete unless
you take notes and work through diagrams etc during the lecture.
Tutorials are essential for helping you clarify any misunderstandings and apply concepts to
more difficult problems. During the tutorials you will be asked to participate in discussions and
solving problems and may also be asked to give a short presentation on an assigned problem.
Note that tutorials will begin in Week 2.
Blackboard: Lecture outlines for each week along with all handouts and announcements about
classes or assessment will be available on the University's Blackboard site.

How to log into ECON1002 Blackboard website:
See the link: http:/ / elearning/ student/ getstart/ webct_ login.shtml
ECON1002 Introductory Macroeconomics
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Netiquettes and classroom courtesy
E- mail policy: E-mails to teaching staff should be sparingly used, typically to make an
appointment, or to let the staff know any urgent issues. Questions concerning the course
material should be asked in person during the staff consultation hours (available on the course
website). When sending an e-mail, students should always use the university e-mail address and
identify their names and student ID. Otherwise, no reply may be given.
Classroom courtesy: To avoid distracting the lecturer and other students in the classroom,
please make every effort to arrive on time. If you happen to arrive late or should leave early,
you should use the rear entry/ exit, without any noise. Students who chat repeatedly during
lecture may be asked to leave. No prior warning may be given. Mobile phones must be switched
off before each class begins.

3. Topic Schedule

Reading Lecture content Tutorial*

July 25

BOF Ch 1
1.1 Introduction to Macroeconomics

1.2: Measuring Macroeconomic
Performance: Output

No tutorial in
Week 1


Aug 1

BOF Ch 1,
2.1: Measuring Macroeconomic Performance:
The Price Level

2.2: Measuring Macroeconomic Performance:
Savings and Wealth

Lecture topic


Aug 8

BOF Ch 3

BOF Ch 4
3.1: Measuring Macroeconomic Performance:
Unemployment and the Labour Market

3.2: An Introduction to Short-term Economic

topics 1& 2


Aug 15

BOF Ch 5

4: Macroeconomics in the Short-Run: The
Basic Keynesian Model

Lecture topic

Quiz 1

Aug 22

BOF Ch 6

BOF Ch 7
5.1: Fiscal Policy
5.2: Money, Prices and the Reserve Bank

Lecture topic


Aug 29

BOF Ch 8
6: The Reserve Bank, monetary policy and
the Economy

Lecture topic


Sept 5

Mid- semester Examination
There will be no lectures scheduled this
week. However, tutorials will run normally.

Lecture topic


Sept 12
BOF Ch 9
7: Aggregate Demand and Aggregate Supply

Go over

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Sept 19

BOF Ch 10

BOF Ch 11
8.1. An Introduction to Economic Growth

8.2. The Production function approach to

Lecture topic

AVCC non-teaching week (26-30 September 2011)

Oct 3

BOF Ch 12

9.1. Savings, capital formation and growth

9.2. The convergence hypothesis and
empirical evidence

Lecture topic


Oct 10

BOF Ch 14

10: Exchange Rates and the Open Economy

Lecture topic


Oct 17

BOF Ch 14

11.1: Exchange rates and Equilibrium

11.1: Fixed Exchange rates and the balance
of payments

Lecture topic


Oct 24

BOF Ch 15

BOF Ch 16

12.1: The Balance of Payments Crises

12.2: Some global macroeconomic issues:
What have we learnt?

12.2: Overview, future study and career
options, and evaluation

Lecture topic

Quiz 2
14 StuVac

*Tutorial content

The detailed tutorial content will be separately available on a week by week basis for downloads
on Blackboard.

4. Texts and Other Resources
Bernanke, Ben; Olekalns, Nilss; Frank, Robert, Principles of Macroeconomics, 2010, 3RD
Edition (hereafter BOF).

The textbook is available for purchase from the Co-op bookshop in the campus. Fisher library
should also have a number of copies for borrowing.
It is strongly recommended that students have their own copy of the prescribed textbook.

Supplementary Material
The publisher provides a range of support material for the textbook details available in the
textbook. While the support material may provide useful additional assistance to your study
of the subject matter, the support material is not required reading. Students must make their
own judgement as to whether accessing and using the support material is worthwhile. The
examinable content of the textbook is defined by the Lecture Outline and the Tutorial

Additional Readings
ECON1002 Introductory Macroeconomics
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In a subject like this, it is important that you keep up to date with current macroeconomic
affairs, as they related to the Australian economy and the rest of the world. This subject will
be taught on the basis that you are reasonably well informed about current macroeconomic
events, such as a recent change in the official interest rate announced by the Reserve Bank of
Australia. For this, students are strongly encouraged to refer to newspapers (the Sydney
Morning Herald, the Australian Financial Review, etc.), periodicals (The Economist), and the
broadcasting media (e.g. Lateline program). There are also many useful internet sources from
which you can download useful readings and macroeconomic data: the Reserve Bank of
Australia ( for both policy statements and Australian macroeconomic
data etc. There is a list of carefully selected essential readings that will help you deepen your
understanding. These readings will be electronically available from either the course website
or the library course readings website.

5. Assessment
5.1 Assessment Schedule

Assessment items Weight Due Date
1). Two Online Quizzes

2*5%=10% Throughout semester
See 5.2 below for further details
2). Mid-semester test 25% Week beginning 5
See 5.2 below for further details
3). Structured research essay

15% Week beginning 3
See 5.2 below for further details
4). Final examination 50% November exam period

Total 100%

5.2 Detailed Assessment Information

1) Online Quizzes
The aim of the online quizzes is to help students develop good study habits and understand key
concepts and theories by practicing multiple choice questions on a regular basis.
You will have to do 20 multiple-choice questions on the lecture topics covered previously. Make
sure that you allocate sufficient time to do them. Do not expect to complete them at the last
minutecomputers are not always available. No excuses will be accepted unless there was a
significant incident or illness which can be documented. Unacceptable excuses include computer
or internet unavailability, employment, holiday, sports etc. Note that you are given 72
hours to do the quiz.
The quizzes will be available on Blackboard under Online Quiz on particular Mondays at 5pm.
They will have to be completed online by Thursday at 5pm. The timetable for online quizzes is:

WEEKS 8 TO 12.

NOTE: Provided a quiz is still available and not yet SUBMITTED, you can correct any previously
saved answer before the deadline.
On the assignment page, you will find two buttons in the bottom right hand corner -"Save",
"Submit". You may save your work by clicking on the "Save" button and continue the assignment
at a later time.
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DO NOT CLICK on the "SUBMIT" button unless you have completed the assignment and want to
get it graded.
You can submit the assignment only "ONCE".
The quizzes will be computer-marked. You will be able to see your score and correct answers
once all students have submitted their answers. Note that the GRADE is FINAL. Students are
strongly advised to keep a copy of the receipt of this electronic submission.

Warning!: I t cannot be helped if you mistakenly submit your answer too early OR if
you fail to submit your answer before it is closed. If you do not submit answers by the
deadline for a quiz, you will not get marks. The quiz will disappear immediately at the deadline.
Students are strongly advised to have a soft or hard copy of the questions and answers
they attempted and submitted.

2) One mid-semester exam (one hour) during the week of September 5 (time and venue
to be advised). If you have a clash with another unit at this time, contact your lecturer
immediately. The mid-semester exam will be a closed-book exam. It will involve 10 multiple
choice questions, and analytical problems based on topics studied for the first half of the

3) Structured research essay (1.5 hours) during the week of October 3 (time and venue
to be advised). Students will be required to write a short essay under exam conditions on a topic
to be provided.

4) One end-of-semester exam (two hours) (time and place to be announced centrally by the
University Examinations Office). The end-of-semester exam will be closed-book. It will involve
multiple choice questions, essay questions or analytical problems based on ALL topics studied in
the course. Questions will primarily come from the second-half of the course, but not exclusively.
Note that no past exam papers will be available.
Students may refer to the Information for Students on Assessment of Coursework available on ]

5.3 Feedback
Feedback on assessments should be taken seriously to help you achieve your learning goals. In this unit you
will receive the following types of feedback:
Marks will be posted into the Blackboard Grade Centre when all results for an assessment have been
compiled. Marks will not be given by email or over the phone. Final marks will not be posted in Grade
Centre. Marks for online quizzes are available immediately upon completion and marks for mid-
semester exams will be available as soon as all exams have been marked.
Errors made in exams are typically identified on the paper. A summary of class-wide errors and
appropriate improvement action for each criterion is provided in class.
If you would like further feedback on an assessment task, you are encouraged to ask your lecturer after
class or during consultation hours.

6. Student feedback and evaluation
Student feedback plays a very important part in helping develop this unit and degree program in general.
Students are encouraged to approach the lecturer with feedback about the unit during the semester. Students
will also have the opportunity to fill-out a confidential unit of study evaluation for each unit of study in the
program at the end of the semester.

7. University and Faculty Policies and Support

7.1 Attendance requirements and penalties for non-attendance
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7.2 Submission of work and academic honesty

Academic honesty is important to protect students' right to receive due credit for work submitted for
assessment. It is clearly unfair for students to submit work for assessment that dishonestly represents the work
of others as their own and gain marks and degrees, which are not based on their own efforts and abilities.
Deliberate breaches of academic honesty constitute academic misconduct. These breaches include: plagiarism,
fabrication of data, recycling previously submitted material, engaging someone else to complete an assessment
on ones behalf and misconduct during supervised assessments.

The penalties for academic misconduct may include: a mark of zero on the assessment; a fail grade in the unit
of study, additional assessment (including an unseen exam), and reference of the matter to the University

Academic dishonesty involves more than just copying material. Cooperation and helping other students may at
times trigger academic dishonesty proceedings if it appears you have worked too closely with another student.

Individual assignments must be written and prepared alone. You may consult with other students about ideas
and possible research sources but the analysis and writing of the assignment must be done alone. Group
assignments should be prepared within the group. Students should contribute fully to the group and take part
in all group activities, contributing ideas, analysis and writing to the final product. While students within the
group should assist each other freely, students should not carry this level of cooperation outside the group.
One group may cooperate and help another group about ideas and possible research sources but the analysis
and writing of the assignment must be done by the group alone.

7.3 Late work policy
Students must respect deadlines for assignments and should familiarise themselves with the Faculty policy on
late work, available at:

7.4 Special Consideration
All applications for Special Consideration together with supporting documentation must be submitted
online at:

Faculty policy
The Faculty of Arts and Social Sciences assesses student requests for assistance relating to completion
of assessment in accordance with the regulations set out in Part 5 of the University of Sydney Academic
Boards policy on Assessment and Examination of Coursework. Students are expected to become
familiar with the Universitys policies and Faculty procedures relating to Special Consideration and
Special Arrangements. A summary of the Faculty of Arts and Social Sciences regulations is available at:

School of Economics policy
If an application for Special Consideration is approved, the following form of consideration will be

Assessment Action taken by student Consideration that will be granted
Final exam Did not attend exam Further test (after end of semester exam period)
Class test / mid-semester test Did not attend the test Further test (after end of semester exam period)
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Further test Did not attend further test Second further test (start of following semester)
Second further test Did not attend second further test
EITHER Grade of Absent Fail ( for repeated short-
term illness) OR grade of Discontinue (Not to count
as Fail) for ongoing serious illness or misadventure
Assignment Late submission Grant extension or reweight other assignments
Optional assignment or test Did not attend the test None
Tutorial Did not attend Reweight other tutorials
Tutorial written work Not submitted Reweight other tutorials
All other assessment not listed Not submitted Reweight or alternative assessment offered

7.5 Appeals against academic decisions
University policy
Faculty Policy

7.6 Student Support
Faculty Policy

7.7 Students with a disability
Students with a disability who wish to obtain reasonable adjustments for their disability must register
with and seek the support of the Disability Services Office.
A student who is registered with the Disability Services Office, and has in place reasonable adjustments
for a disability, may also make a separate claim for special consideration due to illness or misadventure
(see 7.4 above).

ECON1002 Introductory Macroeconomics
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PASS information for the Unit of Study Outline: S2, 2011

PASS Program: Peer Assisted Study Sessions
The Faculty of Arts and Social Sciences funds an additional program for economic students called
PASS. PASS stands for Peer Assisted Study Sessions. Research from the UK, USA and Australia
has consistently demonstrated that students who regularly attend PASS are likely to improve their
academic performance and are less likely to fail or drop out. In 2010, 99% of respondents to end
of semester, anonymous surveys reported they learnt during PASS and 97% reported that they
enjoyed the program. One student commented I loved everything about PASS it was GREAT for
clarifying ideas from class [and] helped my studies. I also had the opportunity to make many
friends through PASS.

Whats in it for you?
Weekly, hour-long sessions lead by senior, high achieving students.
A focus on mastery of course content through discussion and peer learning.
Extra learning opportunities, including problem solving practice where relevant, in areas directly
related to understanding the concepts more thoroughly.
Great opportunities to meet other students and study effectively together in relaxed, interactive,
small groups.

Registering for the PASS program
Attendance in PASS is voluntary but highly recommended. Registrations open the first week of
semester. PASS starts in week 2 of semester. Spaces in the PASS program are limited. Students
register for PASS online at:
Email all enquiries about the PASS program to:

PASS Blackboard
Students will be able to access PASS materials via the ECON1002 Blackboard site.
You will find the PASS agendas for each week, under the PASS tab, plus a range of useful links
that may assist you to learn and study more effectively.