DEPARTMENT OF ECONOMICS

ECO 112: BASIC MACROECONOMICS

COURSE OUTLINE 2023/24
JANUARY 2024

TEACHING STAFF
Group
Time Lecture Room Instructor Office and Contacts
(Lecture)

MWF Office: Block 240/260

A (01) 7.00am-8.00am 252/09 Dr J.B. Tlhalefang Phone: 355 2724
Tlhalefj@ub.ac.bw
MWF Office: Block 230/209
240/002 ( week
B (02) 8.00am-9.00am 1 only) Ms. M. Seemule Phone: 355 2377
252/009 seemulem@ub.ac.bw
MWF Block: Block 240/111

C (03) 12.00pm-1.00pm 240/011 Dr M. M. Ntsosa Phone: 355 2751

ntsosamm@ub.ac.bw

M 1.00pm-2.00pm 203/001 Office: Block 240/263

Dr M. Kolobe
D (04) W 1.00pm-2.00pm 252/004 Phone: 355 2726
(COORDINATOR)
F 1.00pm-2.00pm 252/001 mmoalosi@ub.ac.bw
Tu &Thu 8.00am-
235/003 Office: Block 240/261
9.00am
E (05) Dr L. Sekwati
W 8.00am-9.00am 228/005 Phone: 355 2727
sekwatil@ub.ac.bw
MWF Office: Block 240/102
F (06) 7.00am-8.00am 240/010 Prof.H.k. Siphambe Phone: 355 5860
siphambe@ub.ac.bw
MWF Block: Block 230/218
G (07) 12.00pm-1.00pm 240/001 Prof. G.R. Motlaleng Phone: 355 2376
motlaleg@ub.ac.bw
MWF Office: Block 242B/004
H (08) 8.00am-9.00am 240/013 Ms. K. Molosiwa Phone: 355 5022
molosiwak@ub.ac.bw
Tu &Thu 1.00pm-
203/001 Office: Block 240/259
2.00pm
I (09) Mr. M. Rathedi
F 1.00pm-2.00pm 240/010 Phone: 355 2728
rathedim@ub.ac.bw

COURSE DETAILS:
Credits 3

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Type Core
Semester 2
Pre-requisites None
Co-requisites None

ASSESSMENT:
1. Continuous Assessment (40%)
2. Final Examination (60%)
3. Final Mark (100%) = Continuous Assessment (40%) + Final Examination (60%)
NOTE: YOU ARE REQUIRED TO SCORE A MINIMUM OF 40% OF THE
CONTINUOUS ASSESSMENT MARK (16/40) TO BE ELIGIBLE TO SIT FOR THE
FINAL EXAMINATION

Continuous Assessment (40%)

Assessment Weight Due date
Test 1 20% Sunday 10th March 2024, 0900 – 1015
Test 2 20% Sunday 28th April 2024, 0900 – 1015

AIMS:
The aim of the course is to provide the student with a good understanding of fundamental
principles of macroeconomics, money and banking and public finance and apply them to
specific macroeconomic issues and policy alternatives.

LEARNING OBJECTIVES:
The learning objectives are to enable the student to:
(a) Understand the significance of macroeconomic concepts and principles,
(b) Acquire the ability to reason and debate current macroeconomic issues and develop an
interest in economics,
(c) Possess adequate knowledge to pursue further learning in advanced courses in the
discipline of economics, and
(d) Be able to comprehend the economic issues of Botswana.

RATIONALE
The course provides students of the undergraduate programme with the tools necessary to get
a clear understanding of basic macroeconomic concepts and their relevance to policy
analysis.

COURSE SYNOPSIS
Determination of National Income and equilibrium GDP: The circular flow model; National
income accounting; Measuring domestic product; National income and the Price Level;
Botswana national income accounts. Aggregate expenditures and equilibrium GDP:
Consumption, saving and investment functions and the multiplier. Finance and banking:
functions of money, role of Commercial banks and Central banks. Elements of public
finance: Government budget, taxation, public expenditure and national debt, Tax system in
Botswana. Macroeconomic problems and policies: Unemployment and inflation,
unemployment and inflation in Botswana. The role of Macroeconomic policies: Monetary
policy and fiscal policy.

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Topic Subtopics References
National Income Measuring Domestic output and national McConnell, Chs. 2
Determination and income & 24
Equilibrium GDP  The market system and the circular flow – Van Rensburg et al.,
private, mixed, closed and open economy Chs. 2 & 15
models Case & Fair Ch. 22
 Importance of national income accounting Hardwick, Ch. 17
for assessing the economy’s performance Statistics Botswana,
 Definition of GDP National Income
 GDP a monetary measure Accounts of
 Double counting Botswana
 Measurement of GDP- Income and Charles Harvey &
expenditure approaches S.R. Lewis, Jr. Chs.
 Other national accounts: GNP, NDP, NI, PI 3
and DI
 Limitations/shortcomings of GDP
 Botswana National Income Accounts McConnell, Chs. 27,
Basic Macroeconomic Relationships and the
28 & 29.
Aggregate Expenditure Model
 Income-Consumption and Income-Saving Rensburg et al., Chs.
Relationship 16 and 17
 The consumption and saving schedules Case and Fair, Chs.
 Average and Marginal Propensities 24 & 25
 Non-income determinants of consumption and
saving
 Investment and investment schedule
 Determinants of investment
 Investment demand curve and shifts of the
investment demand curve
 Concept of investment multiplier
 The multiplier effect
 Aggregate expenditure (C+Ig) and equilibrium
GDP in a private closed economy
 Aggregate expenditure (C+Ig+G) and
equilibrium GDP in a mixed closed economy
 Aggregate expenditure (C+Ig+G+Xn) and
equilibrium GDP in a mixed open economy
 Injections and leakages in income generation
process and changes in Equilibrium GDP
Macroeconomic Unemployment McConnell, Chs. 26
Problems  Definition of unemployment & 36
 Measurement of Unemployment Van Rensburg et al.,
 Types of unemployment- Frictional, Structural Ch. 19
and Cyclical unemployment Hardwick, Chs. 27
 Economic and non-economic costs of & 28
unemployment Bank of Botswana
 Control of unemployment- monetary and Annual Reports
fiscal measures Statistics Botswana
 Unemployment in Botswana Reports

Inflation
 Meaning of inflation
 Measurement of inflation

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  Types of Inflation and their causes - demand
pull and cost push inflation
 Redistribution effects of inflation
 Control of inflation- monetary and fiscal
measures
 Inflation in Botswana

Money and Banking  Definition of money McConnell, Chs. 31,

 Properties of money 32 & 33
 Functions of money Rensburg et al., Chs
 Forms of money- M1, M2 and M3 components 12 and 13
of money supply Hardwick, Ch. 21
 The demand for money- transactions demand Bank of Botswana
and asset demand Annual Reports
 Commercial Banks and their Functions Bank of Botswana
 Money creation by commercial banks and (1998), Primer on
money multiplier Money and Banking
 Functions of Central Banks NDP 8 - 11
 Monetary Policy
 Objectives and instruments/tools of monetary
policy
 Expansionary monetary policy and
contractionary monetary policy
 Monetary policy in Botswana

Public Finance Elements of Public Finance and the role of McConnell, Ch. 16,
the Public Sector 17 & 30
 The functions of Government Rensburg et al., Ch.
 Definition of public vs private goods 21 and 22
 Government Budget- Taxes and expenditure Hardwick, Chs. 11
 Surplus, Deficit and Balanced Budget & 14
Charles Harvey &
S.R. Lewis, Jr. Chs.
Taxation 8&9
 Basic principles of taxation- ability to pay Botswana Annual
principle and benefits received principle Budget Speeches
 Types of Taxes: Progressive, Regressive and Statistics Botswana
Proportional Taxes Reports
 Direct and Indirect Taxation NDP 8, 9 & 10 Ch. 5
 Advantages and Disadvantages of different &6
types of taxes
 Tax Incidence of tax burden
 Sources of Tax Revenue in Botswana
 Fiscal policy
 Objectives and instruments of fiscal policy
 Expansionary fiscal policy and contractionary
fiscal policy
 Fiscal policy in Botswana

READING LIST
Recommended Textbooks
1. Campbell R. McConnell and Stanley L. Brue (2009) Economics,
Mc Graw Hill, 18th Edition

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 2. Van Rensburg, Campbell R Mc Connell and Stanley L. Brue, Economics Southern
African Edition, Mc Graw Hill, 2011
3. Philip Hardwick et al, (1999), An Introduction to Modern Economics, Longman,
4th Edition.

Supplementary Readings
1. Carl E. Case and Ray C. Fair (2000) Principles of Economics, Prentice Hall, 5th
Edition
2. Siphambe, H. K. et al, Economic Development of Botswana, Facets, Policies,
Problems and Prospects
3. Statistics Botswana, Statistical Bulletins.
4. Bank of Botswana (BOB), Annual Reports
5. Statistics Botswana, National Income Accounts.
6. Government of Botswana, Annual Budget Speeches.
7. Government of Botswana, National Development Plans

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