Introductory MacroeconomicsGwen Eudey's ClassesCourse Materials and InformationFall 2007 |
Answer Keys to the Spring 2007 Final Exams:NonhonorsHonorsLink to the Spring 2007 Course Materials Page |
Weekly Outlines and Assignments |
Textbook/Background Material
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Using the model: Current events and applications of the course material
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Quiz, Experiment, and Exam Dates |
Week 19/5-9/7 FYI:
No recitation this week No homework this week |
Eudey, Ch 1: An Introduction to Macro Eudey, Ch 2: Macro Data--price indices Corrected Chapter 2 "boxes" for those of you with the first edition of the textbook
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Week 29/10-9/14 FYI Blackboard Homework due 9am Thursday |
Eudey, Ch 2: Macro Data--price and output indices
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Week 39/17-9/21 Blackboard Homework due 9am Thursday |
Eudey, Ch 3: Looking at Macro Data Eudey, Appendix to Ch 3: U.S. Employment Data
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The August Employment report (analyzed by Moody's Economy.com) Why is the employment report so important? Why is it often subject to large revisions? What do these revisions imply for GDP revisions? What are the two employment surveys in the report and what are weaknesses of each? Why is the labor force participation rate such an important economic indicator? The August retail sales report (analyzed by Moody's Economy.com) What are strengths and weaknesses of retail sales data? What aggregate expenditures component of GDP do they inform us about? Do you expect the September retail sales report to be better or worse than that for August? Why? What impact will that have on your forecast for third quarter GDP? The July business inventories report (analyzed by Moody's Economy.com) Why are the inventory data important indicators? How do they affect the revision from the "advance" to the "preliminary" GDP release? Why are they hard to interpret except in combination with other data? Given what we now know about the August economy, how would you interpret the July inventory data--as indicating strength or weakness in the overall economy? Moody's Economy.com Risk of Recession report for August What is the probability that the economy will go into recession (according to Moody's)? Did that probability rise or fall in August? What are some factors (i.e. pieces of data as well as events) that likely influenced the August Risk of Recession report? What impact do you expect the interest-rate policy to have on Consumption and Investment spending? Explain. Why did they undertake the policy? Do you expect the policy to have any impact on any other sectors of the economy? How will the policy, in your opinion, affect Moody's Risk of Recession report for September?
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Week 49/24-9/28 *Note there are two aplia experiments this week |
Eudey, Ch 4: The production function and the market for labor Eudey, Appendix to Ch 4: The labor market model and the labor market data
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Aplia Labor Supply ExperimentWednesday 9/26 at 8pmor on the makeup dateThursday 9/27 at 8pm
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Aplia Labor Market ExperimentWednesday 9/26 at 9pmor on the makeup dateThursday 9/27 at 9pm |
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Week 510/1-10/5 FYI: market place morning report address seen/heard in lecture Blackboard Homework due 9am Thursday **note change in chapter ordering posted 9/17 |
Eudey, Ch 4: The market for Capital Eudey, Ch 7: Financial Market Arbitrage** **note change in chapter ordering posted 9/17 |
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First QuizMonday, October 1in lecture(you must attend the lecture time to you which you are assigned; there are no quiz makeups) |
Week 610/8-10/12 *Midterm Review held during each of Monday's lectures
No homework this week No recitation this week |
Eudey, Ch 5: Economic Growth Eudey, Appendix to Ch 5: MFP data
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The September Employment Report (analyzed by Moody's Economy.com) How do the September payroll data look compared to the August report? Were there any revisions to the August payroll data? How do the unemployment data look? How does the report affect your view about the risk of recession? How stock markets react to economic news (from The Economist on-line edition) Why might stock markets rise (prices rise) with good news about stronger corporate profits? Use arbitrage theory to explain why bad economic news, which can trigger interest-rate policy, may cause stock prices to rise. |
Midterm Review given during lecture on MondayFirst MidtermTuesday Oct 97:30-8:30pmexam locations |
Week 710/15-10/19 No class on Monday FYI: Blackboard Homework due 9am Thursday |
Eudey, Ch 6: The Business Cycle
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United Nations Millennium Development Goals website Why do economists expect per-capita growth levels to converge (e.g. why do economists expect countries with low standards of living to have faster GDP per-capita growth than the U.S.) Why might the UN focus on poverty rather than on GDP when setting these economic goals? Many of the UN goals relate to health issues: Use the poverty trap graph to help illustrate how health affects poverty (the opposite causality should be more obvious, that poverty affects health). On the whole, and according to the UN data, is worldwide poverty rising or falling? What regions are doing relatively well and which relatively badly? (If you are interested, there are some articles about this in the "FYI" sub-folder in the Blackboard course documents folder.) Poverty Trap and UN Millennium Development Goals handout
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First MakeupWednesday Oct 176-7pm |
Week 810/22-10/26 Blackboard Homework due 9am Thursday FYI: |
Eudey, Ch 8: Exchange rates
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UBS Index of Investor Optimism for October UBS and Gallop together conduct a monthly phone survey of 1000 lenders and ask them about their expected returns, how they view credit market conditions, and what their personal saving/spending plans are for the near term. The investors in the survey all have portfolios of at least $10,000. Given the survey results, what do you expect to happen in the next few months to the U.S. capital account? to the value of the dollar? to GDP? Does the survey make you think this is a good or bad time to buy stocks? Explain, using the language and theory from class (there is no one right answer to any of these questions--it all depends on your arguments). What is the Big Mac Index and how is it a test of whether exchange markets are in equilibrium? What are some strengths and weaknesses of the Big Mac Index as a test of whether the U.S. dollar is in equilibrium in any exchange market? What factors might currently be causing under-valuation of the dollar in some markets? over-valuation in some markets? |
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Week 910/29-11/2
Blackboard Homework due 9am Thursday FYI |
Eudey, Ch 9: Household behavior
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Practice considering how changes in the current-conditions component and the future-conditions component might each separately affect household spending and saving plans depending on whether the household is rational, rational-with-credit-constraints, or follows a rule-of-thumb. Then consider also the implications of your answer in each case for the other components of AD (i.e. how the savings decision affects the capital and international markets). |
Second QuizMonday October 29in lecture(you must attend the lecture time to you which you are assigned; there are no quiz makeups)
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Week 1011/5-11/9 *Midterm Review held during each of Monday's lectures No homework this week No recitation this week |
Eudey, Ch 10: Aggregate Demand and Aggregate Supply *Note: There is a typo on the bottom of page 104 in Chapter 10. It should read "AD = C + planned I + G + X - M" rather than "+ M"
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Week 1111/12-11/16
FYI: Blackboard Homework due 9am Thursday |
Eudey, Ch. 11: The AD-AS model Eudey, Ch. 12: Fiscal Policy
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The Housing Market and the Risk of Recession This article is a nice summary of what went wrong in the housing market and why it might yet affect Consumption spending and therefore Aggregate Demand. Practice graphing both how a housing boom and a subsequent housing crisis might affect the business cycle using the AD-AS framework (you may assume no shift in LRAS). Make sure to explain what is happening in labor markets as move you move along and/or shift the AS curve, as well as any shifts-in or movements-along AD. This analysis is of course separate from any impact the housing crisis may have had or may yet have on Investment spending, exchange markets, or the trade balance. You should think about those impacts separately and think about the total impact of the crisis on AD. If you are interested in Ben Bernanke's opinion of events (he's the chairman of the U.S. Central Bank), read the related November 8th article in the "FYI" folder of the "course documents" section on Blackboard.
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Second MakeupTuesday Nov 136-7pm
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Week 1211/19-11/23
No Wednesday lecture No Homework this week No recitation this week |
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Week 1311/26-11/30 Blackboard Homework due 9am Thursday
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Eudey, Ch. 13: Money Eudey, Ch. 14: Money and Banking
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The U.S. Economy (November 15, 2007) This article has lots of applications of the course material. It is also a nice summary of where the economy stands as of November 2007. Page 1, paragraph 3: Practice showing the impact of rising demand for U.S. exports on the markets for goods and labor (you may assume we start in a long-run equilibrium). Show how the economy moves to a new long-run equilibrium and explain any assumptions and movements along and/or shifts in curves. Page 1, paragraph 4: Practice showing the impact of falling Consumption spending on the markets for goods and labor (you may assume we start in a long-run equilibrium). Show how the economy moves to a new long-run equilibrium and explain any assumptions and movements along and/or shifts in curves. Page 2, paragraph 2: Same graph as above, but now the fall is in Investment spending! Page 2, last three paragraphs: Why are houses not liquid assets? Why do home values affect Consumption spending? Page 3: What is happening to overall wealth in the U.S.? How will lower interest rates (the result of policy) affect thath overall wealth? Page 4: Why are higher oil prices associated with falling MFP? Why are oil price increases historically associated with recessions? Explain and show graphically using the markets for goods and labor (you may assume we start in a long-run equilibrium). Show how the economy moves to a new long-run equilibrium and explain any assumptions and shifts in curves (you should explalin movements along curves in the labor market only) Page 5: Why is it that we may technically avoid a recession and yet the economy may be doing badly? How do we define a recession? Is it possible for welfare to be falling and yet not technically be in a recession? |
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Week 1412/3-12/7 Blackboard Homework due 9am Thursday *Note there are two aplia experiments this week |
Eudey, Ch. 15: Monetary Policymaking in the U.S. Chapter 16: Summary
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Federal Reserve Vice-Chairman Kohn hints about FOMC policy (11/28) What is the arbitrage relationship that causes the stock market to rally when analysts forcast an interest-rate cut? In principal, you might think things could work the other way, as a rate cut might signal an insider (FOMC) view that the economy is in trouble. Why might that interpretation of Kohn's remarks have caused the market to move the other way?
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Third QuizMonday December 3in lecture(you must attend the lecture time to you which you are assigned; there are no quiz makeups)
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Aplia Fixed Prices ExperimentMonday 12/3 at 8pmor on the makeup dateTuesday 12/4 at 8pm |
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Aplia Flexible Prices ExperimentMonday 12/3 at 9pmor on the makeup dateTuesday 12/4 at 9pm |
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Week 15,16 no lecture or recitation |
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Final ExamTuesday Dec 183-4:30pm*note that date and time do not necessarily correspond to those for your lecture time slot
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Contact Information:Dr Gwen Eudey 506 McNeil 215.898.7676 eudey@econ.upenn.edu Office hours:Friday 10am -12pm Course SyllabusLink to BlackboardLink to Aplia (both the registration instructions and the course key are included in the course syllabus)Link to Document outlining Economics Department course policies |
