AIR UNIVERSITY SCHOOL OF MANAGEMENT-AUSOM

Macroeconomics (Fall 2018)

Course Title: Macroeconomics

Class: BBA 3 (A & B) Lab (No)
Credit Hrs.: 3 Hours
Prerequisites For this Course: Microeconomics
This Course is Prerequisite For: Nil
Instructor: Sara Farhan
E-mail : sarah.farhan@mail.au.edu.pk
Text Book:
 Gregory Mankiw, Macroeconomics, Ninth Edition (International Edition), Worth
Publishers, 2016.
Other Readings:
 Cases – Six
 Notes (Will be provided before the relevant class

Course Description:
The course will cover the performance of the economy in the long-run and in particular the
determination of national income, the determinants of long-run economic growth, inflation and
unemployment, and economic pathologies such as persistent unemployment and
hyperinflation. It will also cover the behavior of the economy in the short run, including
business cycle fluctuations, the design and effects of monetary and fiscal policy, budget deficits
and government debt and the open economy

Course Learning Outcomes:

On successful completion of this course, student will be able to:
1. Locate and interpret macroeconomic data; and identify and explain important
macroeconomic concepts.
2. Analyze simple macroeconomic models and use these models to explain and interpret
behavior of key macroeconomic variables.
3. Identify current economic issues and debates, then apply simple macroeconomic
models to analyze and interpret policy issues.
4. Explain the determinants of a country’s trade deficit and the mechanism behind
exchange rate fluctuations.
5. Recognize alternative ways of measuring a country's economic performance.

Grading Policy:
The grading will be done as per the policy of the university as follows:
1. Final Exam (45%)
 2. Mid-Term Exam (25%)
3. Class Participation (10%)
4. Quizzes/Assignments (20%)
Lecture Plan:
Week Sessions Topics Contents Activity
1 1&2 Introduction Ten Principles of Economics
Chapter 1-2 Introduction to various
(Mankiw) macroeconomic variables and
data
The Economy in the Long-Run
2 3&4 National Income National Income: Discussion on
Chapter 3 components and determination of
(Mankiw) national income and various
indicator for measuring national
income
3 5&6 Money and Money and Inflation: Functions of
Inflation money, Money demand and the
Chapter 4-5 quantity theory of money,
(Mankiw) Inflation and money growth;
seigniorage; hyperinflation, The
costs of inflation, Inflation and
interest rates
4 7&8 Inflation in Determination of Inflation
Pakistan indicators in Pakistan Quiz
PBS Handout
5 9 & 10 Labor Markets Discussion on types of
and unemployment and various
Unemployment components of labor market
Chapter 7
(Mankiw) How France Used Unemployment
Benefits to Kick start
Entrepreneurship (Case)
The Economy in the Very Long-Run
6 11 & 12 Economic Economic Growth: The main facts
Growth I of growth and Solow Model
Chapter 8 Assignment
(Mankiw)

7 13 & 14 Economic Economic Growth: Endogenous Quiz

Growth II growth model
Chapter 9
(Mankiw) The Solow Model Unleashes
 (Casework)
8 Mid –Term
9 17 & 18 The Open International trade and borrowing,
Economy nominal and real exchange rate,
Chapter 6 macroeconomic policy in the open
Mankiw) economy

Nike versus New Balance: Trade

Policy in a World of Global Value
Chain (Case)
The Economy in the Short Run
10 19 - 22 Economic Introduction to economic
Fluctuation and fluctuation and building the IS-LM
Aggregate model
Demand I
11 Chapter 10-11 Macroeconomic Forces, The
(Mankiw) National Hockey League, And
Winning the Stanely Cup (Case)
23 & 24 Aggregate Applying IS-LM model
Demand II
12 Quiz
Chapter 12
(Mankiw)
13 25 & 26 Aggregate Aggregate supply and short-run
Supply tradeoff between inflation and
Chapter 14 unemployment.
(Mankiw)
Brazil 2003: Inflation Targeting
and Debt Dynamics (Case)
Macroeconomic Policy
14 27 - 29 Debt and Discussion on government debt
Pakistan and budget deficit
Chapter 19
15 (Mankiw) and
Pakistan The Greek Crisis: Tragedy or
Economic Survey Opportunity (Case)
Revision