Economics
Ms Cathy Fletcher
6 points * Two 1-hour lectures and one 1-hour tutorial per week * First, second semester * Clayton * Pre-/corequisite: ECO1000 * Prohibition: ECO1030, ECO1110
Objectives On completion of this subject students should have a conceptual understanding of the nature of general equilibrium relationships and of their microeconomic underpinnings; understand the mutual dependence between financial transactions and trade in goods and services, between the accumulation of foreign debt and the domestic income-expenditure balance; be acquainted with the components of the aggregate economic structure, and their role in the Australian economy; be familiar with the nature and causes of economic growth and of the cyclical patterns of inflation and unemployment; be able to assess and critically evaluate government economic policies; be able to proceed to the study of other economics subjects which have the introduction to economics as a prerequisite.
Synopsis The scope of macroeconomics and its microeconomic underpinnings; aggregation problems; distinction between partial equilibrium and general equilibrium analysis; the circular flow of income as a general equilibrium model; the mutual dependence of financial flows and flows of goods and services; sectoral composition of aggregate demand: households and consumption/saving behaviour; business and investment behaviour; government spending and taxation; external balance and determination of current and capital accounts; labour market and aggregate supply; money, credit, and the conduct of monetary policy; inflation and unemployment; macroeconomic effects of deregulation in Australia: exchange rates and financial institutions.
Assessment Written (class tests and assignments): 30% * Examination (2 hours): 70%
Recommended texts
McTaggart D and others Economics Addison-Wesley, 1992
or
Stiglitz J Economics Norton, 1993