Lahore University of Management Sciences

MECO 121– Principles of Macroeconomics

Spring 2019
Instructor Dr. Fahd Rehman
Room No. 323
Office Hours Tuesday and Thursday (12.30 pm to 2.15 pm) Other times by appointment only
Email fahd.rehman@lums.edu.pk
Telephone
Secretary/TA Muhammad Rehman
TA Office Hours TBA
Course URL (if any) suraj.lums.edu.pk

COURSE BASICS
Credit Hours 3
Lecture(s) Nbr of Lec(s) Per Week Duration
Recitation/Lab (per week) Nbr of Lec(s) Per Week Duration
Tutorial (per week) Nbr of Lec(s) Per Week Duration

COURSE DISTRIBUTION
Core Yes
Elective
Open for Student Category
Close for Student Category

COURSE DESCRIPTION
To provide the students with an introduction to the basic macroeconomic principles; to enable students to appreciate the workings
of real and asset/money markets and the nature of equilibrium in each market; to emphasize the role of macroeconomic policies
that affect internal and external deficits, inflation and growth of per capita income. Throughout the course a focus will be on
analyzing macroeconomic problems.

COURSE PREREQUISITE(S)

MECO 111

COURSE LEARNING OBJECTIVES

Upon successful completion of the course, students should be able to:

1. Develop an understanding of basic macroeconomic concepts and their application to real world situations.
2. Identify core macroeconomic issues related to global and Pakistan’s economy
3. Enable students to understand the macroeconomic linkages with Finance, Management and Marketing.

Moreover, students should also learn to:

4. Work independently and in teams (for group project)

5. Evaluate critically and apply economic models to solve real world problems.
 Lahore University of Management Sciences
UNDERGRADUATE PROGRAM LEARNING GOALS & OBJECTIVES
General Learning Goals & Objectives
Goal 1 –Effective Written and Oral Communication
Objective: Students will demonstrate effective writing and oral communication skills
Goal 2 –Ethical Understanding and Reasoning
Objective: Students will demonstrate that they are able to identify and address ethical issues in an organizational
context.
Goal 3 – Analytical Thinking and Problem Solving Skills
Objective: Students will demonstrate that they are able to identify key problems and generate viable solutions.
Goal 4 – Application of Information Technology
Objective: Students will demonstrate that they are able to use current technologies in business and management
context.
Goal 5 – Teamwork in Diverse and Multicultural Environments
Objective: Students will demonstrate that they are able to work effectively in diverse environments.
Goal 6 – Understanding Organizational Ecosystems
Objective: Students will demonstrate that they have an understanding of Economic, Political, Regulatory, Legal,
Technological, and Social environment of organizations.

Major Specific Learning Goals & Objectives

Goal 7 (a) – Discipline Specific Knowledge and Understanding
Objective: Students will demonstrate knowledge of key business disciplines and how they interact including
application to real world situations (Including subject knowledge).
Goal 7 (b) – Understanding the “science” behind the decision-making process (for MGS Majors)
Objective: Students will demonstrate ability to analyze a business problem, design and apply appropriate
decision-support tools, interpret results and make meaningful recommendations to support the decision-maker

Indicate below how the course learning objectives specifically relate to any program learning goals and
objectives.
PROGRAM LEARNING GOALS AND
OBJECTIVES
Goal 1 –Effective Written and Oral
Communication
Goal 2 –Ethical Understanding and
Reasoning
Goal 3 – Analytical Thinking and Problem
Solving Skills
Goal 4 – Application of Information
Technology
Goal 5 – Teamwork in Diverse and
Multicultural Environments
Goal 6 – Understanding Organizational
Ecosystems
Goal 7 (a) – Program Specific Knowledge
and Understanding
COURSE LEARNING OBJECTIVES COURSE ASSESSMENT ITEM
(CLO)
Minor goal: Operationalized through class CP,Project write up & presentation
participation and group project (CLO#4)
Minor goal: Application of microeconomic Quizzes and exams
principles in real world scenario (CLO #
1,2 & 5)
Minor goal: Operationalized through Project write up and presentation
preparation of group project reports and
presentations (CLO#4)
Minor Goal: Students have to work in Group project
random groups for project (CLO#4)
Major Goal: Comprehensive coverage of CP, quizzes and exams
topics in microeconomics (CLO# 1- 5)

Goal 7 (b) – Understanding the NA

“science” behind the decision-making
process
 Lahore University of Management Sciences
GRADING BREAKUP AND POLICY

Quiz(s) 20% (4 quizzes: 1 will be unannounced)

CP and Attendance 10%
Midterm Examination: 30%
Final Examination: 40%

 Late comers will be marked absent.

 Regular attendance and class participation is vital for better understanding of course. There will be no penalty for first
three absences. However, up to five absences, there will be 2% reduction in CP. After 8 absences your possibility of
continuing the course will be reconsidered.

EXAMINATION DETAIL

Midterm
Exam Yes

Final Exam
Yes

COURSE OVERVIEW
WEEK/
RECOMMENDED SESSION OUTCOME(S)
LECTURE/ TOPICS
READINGS (STUDENTS WILL BE ABLE TO …)
MODULE
A first look at Macroeconomics General Overview Demonstrate and review the Basic
1. and Chapter 24 macroeconomic concepts and their
measurements
National Income Accounts Chapter 24 Understand the concepts of National Income and
2.
difference between Real versus Nominal GDP
Measuring the cost of living Chapter 25 Understand the measurement of cost of living i.e
3. CPI and how it is measured?

Measuring the cost of living Chapter 25 Why the CPI is an imperfect measure of cost of
4.
living
Production and Economic Growth Chapter 26 Understand the Determinants of productivity and
5. growth

6. Production and Economic Growth Chapter 26 Understand the Determinants of productivity and
 Lahore University of Management Sciences
growth

Saving, Investment and Financial Chapter 27 Understanding of Financial Institutions, market for
7. System loanable funds and analysis of different policy
actions on market for loanable funds
Saving, Investment and Financial Chapter 27 Understanding of Financial Institutions, market for
8. System loanable funds and analysis of basic tools of
finance
Labor Markets and Unemployment Chapter 28 Comprehend the different labor market indicators
9.
and different types of unemployment rate
Labor Markets and Unemployment Chapter 28 To comprehend the different labor market
10. indicators and different types of unemployment
rate
The Monetary System Chapter 29 To understand different kinds of money and
11.
functions of money.
Central bank and Monetary Control Chapter 29 Demonstration of the role of Central bank and
12. Money Supply and analysis of different tools of
monetary control
Inflation: Causes and Costs Chapter 30 Demonstration of Quantity Theory of Money
13.
along with the concepts of money neutrality
14. Review Session Pre-Mid
15. Mid Term
Inflation: Causes and Costs Chapter 30 Understand the concept of inflation and deflation.
16.
Different types of inflation and cures of inflation.
Balance of Payment Chapter 31 To show the concept of International flows of
17. goods and financial resources and familiarity with
Balance of Payment Accounting
Exchange Rates Chapter 31 Explain the basic concepts i.e. nominal versus real
exchange rate, appreciation and depreciation and
18. purchasing power parity

Introduction to Business Cycles Chapter 31 To understand the business cycles and their
phases.
19.
Consequences of business cycles for firms and
managers
Aggregate Demand and Aggregate Chapter 33 Evaluation of aggregate supply and aggregate
Supply demand concepts and factors responsible for
20.
shifts in AD and AS

Aggregate Demand and Aggregate Chapter 33 Evaluation of aggregate supply and aggregate
Supply demand concepts and factors responsible for
21.
shifts in AD and AS

Fiscal Policy, Monetary Policy and Chapter 34 Implications of expansionary fiscal and monetary
Aggregate Demand policies for aggregate demand and role of
22.
automatic stabilizers

23. Fiscal Policy, Monetary Policy and Chapter 34 Implications of expansionary fiscal and monetary
Aggregate Demand policies for aggregate demand and role of
automatic stabilizers
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Inflation and Unemployment Chapter 35 Implications of short run relationship between
24.
inflation and unemployment
Inflation and Unemployment Chapter 35 Implications of Short Run relationships between
25.
inflation and unemployment
Pakistan Economy To be provided Evaluation of current state of Pakistan economy.
26. Problems faced by Pakistan economy and
different approaches to reduce such problems.
27. Review Session

TEXTBOOK(S)/SUPPLEMENTARY READINGS
Principles of Economics (5th Edition) by Gans, king, Stonecash and Mankiw

Suggested Readings and Websites

Economic Survey of Pakistan

www.finance.gov.pk

SBP Annual Reports

www.sbp.org.pk

Pakistan Bureau of Statistics

www.pbs.gov.pk