Economics A101:2, 15 Credits

Contents

Module 1, Macroeconomic analysis in the short-run – The business cycle and unemployment (7,5 ECTS)
The overall objective of the module is to introduce macroeconomic theory and how the economy works in the short-run. The module aims at giving the student the necessary tools to analyze welfare over time and across countries.
To facilitate an analysis of the economy central concepts as Gross Domestic Product (GDP), Balance-of-Payments (BoP), growth, unemployment, inflation and exchange rates are introduced. GDP will be the starting point for the further analysis of its determinants and how fluctuations in GDP affect unemployment. The BoP will be the starting point for an analysis of international trade where the students also are introduced to theoretical trade models.
The module continues with stabilization policy, i.e. active fiscal- and monetary policy, the different tools available for the Government or the Central Bank to use. The objective is to give the student a good understanding of macroeconomic models but also the possibilities and limitations of fiscal- and monetary policy.

Moment 2, Macroeconomic analysis in the long-run – inflation and growth (7,5 ECTS)
Module 2 continues where the previous module ends. The focus changes from the short-run to a medium to long-run analysis of the economy. The module starts by introducing how price changes and inflation affects the possibilities for stabilization policy. Focus lies on how changes in demand influence the inflation rate in the economy.
The second part of the module concerns economic growth and the determinants of growth in the long-run. Theories describing the role of savings and technology are introduced and the question of why some countries are rich and some poor are discussed. The module tries to capture the variety of economic crises and discusses how to design the economic-political framework. Focus is on the European example and it current topics.
The objective is to give the student a good understanding of macroeconomic models but also the possibilities and limitations of fiscal- and monetary policy in the long-run.

Expected learning outcomes

Module 1, Macroeconomic analysis in the short-run – The business cycle and unemployment (7,5 ECTS)
Upon completing this module, students should be able to:
• Define and calculate the level and change in material welfare over time and across countries
• Explain and illustrate the effects of different shocks to the economy on GDP in the short-run
• Explain and illustrate the relationship between the goods market and the money market in the short-run and describe the possibilities and limitations of monetary- and fiscal policy in an open economy.
• Describe the origins to, and consequences of, unemployment
• Describe basic trade theory
• Exemplify and apply macroeconomic models on relevant problems.

Moment 2, Macroeconomic analysis in the long-run – inflation and growth (7,5 ECTS)
Upon completing this module, students should be able to:
• Explain and illustrate the connection between aggregate supply and aggregate demand, and describe the possibilities and limitations of monetary- and fiscal policy in an open economy in the long-run.
• Describe the determinants of economics growth
• Explain and illustrate how changes in savings, technology and population growth affects material welfare in the long-run
• Explain the European integration, EMU and other monetary arrangements
• Explain different the implications of different exchange rate regimes and different economic policy frameworks
• Exemplify and apply macroeconomic models on relevant problems.

Required Knowledge

Mathematics C, English B and Social Science A from Swedish gymnasium or the equivalent.

Form of instruction

The education is given in form of lectures, group sessions and seminars.

Examination modes

The examination can consist of mid-module exams (duggor), written examination in the end of each module, assignments and seminars. The result from the mid-module exams, assignments and seminars are only valid during the current semester.
A second exam opportunity is offered within a short time span after the regular exam date for those students not achieving a Pass, except Module 2 during spring semesters. Subsequent exam opportunities are either the re-take opportunity the week before the fall semester or the next regular exam date.
The following grading system will be used: Pass with Distinction (Väl Godkänd) Pass (Godkänd) Fail (Underkänd).
Grades on the course are awarded when the student has passed all examinations and compulsory course elements on all four modules. The grade Pass with Distinction on the course requires the grade Pass with Distinction on at least three out of four modules.
When a student has failed an examination on two occasions, he or she has a right to have another grading teacher. A written request for an alternative examiner should be handed to the Head of the Umeå School of Business and Economics no later than two weeks before the next examination opportunity.
Rules and regulations concerning the production of academic texts and correct referencing will be applicable to all written assignments.

Credit transfer
Academic credit transfers are according to the University credit transfer regulations.