Skip to main content

Unit information: Economic Principles 2 in 2015/16

Please note: you are viewing unit and programme information for a past academic year. Please see the current academic year for up to date information.

Unit name Economic Principles 2
Unit code EFIM10007
Credit points 20
Level of study C/4
Teaching block(s) Teaching Block 2 (weeks 13 - 24)
Unit director Dr. Katerina Raoukka
Open unit status Not open

Economic Principles 1



School/department School of Economics, Finance and Management
Faculty Faculty of Social Sciences and Law

Description including Unit Aims

This unit follows on from Economic Principles 1 and develops microeconomics and macroeconomics at a more rigorous level.

On the microeconomic side it covers material such as consumer theory, factor pricing, general equilibrium and welfare and international trade.

The key aim is to introduce the student to a wide range of models which are useful in economic analysis of consumers, firms and policy-makers.

On the macroeconomic side, the key aim is to introduce the student to a dynamic 3-equation model of the whole economy and equip them with the tools to use that model to understand and interpret macroeconomic events.

Intended Learning Outcomes

Students will be able to:

1. Recognise the various contexts in which consumer choice theory can be applied (e.g., work-leisure choice and inter-temporal choice).

2. Explain the operation of factor markets under various forms of competition.

3. Appreciate the interrelatedness of key economic variables and to analyse these interrelationships using simple general equilibrium models.

4. Assess and judge the welfare consequences of various policies and market configurations.

5. Understand the basic principle of comparative advantage.

6. Explain important concepts such as the output gap, the Phillips curve and the monetary policy rule.

7. Analyse the behaviour of the output gap, the interest rate and the rate of inflation using a simple 3-equation model of an economy that is disturbed by various shocks, some of which will have originated abroad.

8. Recognise the complexity of policy making in a highly uncertain environment and with an imperfect knowledge of the way key macroeconomic variables interact and are determined over time.

9. Develop a deeper understanding of key components of aggregate demand, including aggregate consumption and aggregate investment.

Teaching Information

27 lectures (15 Macro; 12 Micro)

8 exercise lectures (4 Micro; 4 Macro)

10 tutorials (5 Micro; 5 Macro) with groups of no more than 15 students

Assessment Information

Summative Assessment:

3 hour examination in May/June worth 100%. This tests all the learning outcomes.

Formative Assessment:

Students will complete 4 pieces of formative assessment during the unit each consisting of a short (1000-word) essay and a few analytical questions. All the learning outcomes will be assessed.

Reading and References

Same textbooks as in Economic Principles 1:

Nechyba, Thomas. Microeconomics: An intuitive approach with calculus

Varian, Hall. ntermediate Microeconomics, a Modern Approach

Perloff, Jeffrey. Microeconomics with calculus

Jones, Charles I. Macroeconomics, 2nd ed.

Mankiw, Gregory. Macroeconomics, 7th ed.

Blanchard, Amighini and Giavazzi. Macroeconomics: A European Perspective, 2nd ed.