Define, calculate, and critically assess the key economic indicators of income, expenditure, and national accounts.
Introduction to Principles of Economics - Macro
This subject introduces the process and principles of macroeconomic thought as they have been developed to explain the determination of the levels of national income and output, employment, the price level and other macroeconomic aggregates. The implications of these principles of public policy in Canada will be examined in the contexts of money and banking, stabilization efforts, international trade, the structure of the Canadian economy, and responses to the emerging patterns of global competition.
Upon successful completion of this subject the student will be able to:
- Define, calculate, and critically assess the key economic indicators of income, expenditure, and national accounts.
- Define, measure, and assess economic growth and fluctuations, unemployment and inflation, in the context of the Canadian economy.
- Demonstrate the relationships between consumption and income, saving and income, interest rate and investment.
- Examine the determinants of consumption, saving, investment, and the multiplier effect.
- Use the aggregate expenditure model to determine equilibrium levels of employment, output and income in various types of economies.
- Trace the operation of the spending multiplier in closed and open economies.
- Derive aggregate demand from the aggregate expenditures model when price level is changing or constant, with reasons for movements along and shifts of the aggregate demand curve.
- Delineate the differences and links between short-run and long-run aggregate supply.
- Chart macroeconomic equilibrium and gaps using the long-run AD/AS model.
- Assess policies for dealing with recession and cyclical unemployment, demand-pull and cost-push inflation, and the promotion of growth, full employment and stable prices.
- Analyze the purposes, tools, and limitations of fiscal policy and its possible applications for amending the AD/AS model, and thereby closing inflationary and recessionary gaps.
- Explain money and its functions, money supply, and the structure and evolution of the Canadian financial system, money creation with respect to the monetary base, desired reserves, and the money multiplier.
- Interpret the role of the Bank of Canada and the operation of the tools of monetary policy.
- Discuss the demand for money, the structure of interest rates, the monetary transmission mechanism, and evaluate restrictive and expansionary monetary policy using the AD/AS model.
- Summarize the importance of international trade to Canada in terms of overall volume.
- Evaluate the short-run trade off between inflation and unemployment (Phillips curve).
Essential Employability Skills
Communicate clearly, concisely and correctly in the written, spoken and visual form that fulfils the purpose and meets the needs of the audience.
Respond to written, spoken, or visual messages in a manner that ensures effective communication.
Apply a systematic approach to solve problems.
Use a variety of thinking skills to anticipate and solve problems.
Locate, select, organize, and document information using appropriate technology and information systems.
Analyze, evaluate, and apply relevant information from a variety of sources.
Show respect for diverse opinions, values, belief systems, and contributions of others.
Manage the use of time and other resources to complete projects.
Take responsibility for one`s own actions, decisions, and consequences.
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