Monash University Business and Economics Handbook, 1997

ECO1010

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): 40%
* Examination (2 hours): 60%

Recommended texts

McTaggart D, Findlay C and Parkin M Macroeconomics 2nd edn, Addison-Wesley, 1996

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