| 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 |
| Pre-requisites |
Economic Principles 1 |
| Co-requisites |
None |
| School/department | School of Economics, Finance and Management |
| Faculty | Faculty of Social Sciences and Law |
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.
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.
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
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.
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.
