McMASTER UNIVERSITY

McMaster University Economics Department

Winter Term 2014Econ 2HH3 Intermediate Macroeconomics IIClassroom: KTH B135Instructor: Rashid Khan

Office: KTH 420 e-mail:khanr@mcmaster.ca

Telephone:525-9140 ext. 27389 Office Hours:

Monday 2:30-3:20 PMTuesday 10:30-11:20 AM OBJECTIVES:The course will start with unemployment and growth theories. We review the open economy macro model and analyze short-run macroeconomic policies. We derive the Aggregate Supply curve, Phillips curve and Sacrifice Ratio. We bring the core of macroeconomic policy debates in the areas of stabilization policies (fiscal and monetary policies). We develop consumption function, investment function, and money demand and money supply functions.

REQUIRED TEXT: Macroeconomics, 4th Canadian edition: N.Mankiw and W.Scarth

COURSEWARE prepared by the Instructor published by the McMaster Bookstore

Marking Scheme

3 in-class Tests

40%

Best 3 out of 4 in-class Quizzes10%

Final Exam (3 hours)

50%

Bonus Quizzes

1.5%

Bonus Assignment

1%Bonus Quiz #1

Monday January 13, 2014

Regular Quiz #1

Monday January 20, 2014

Test #1

Monday February 27, 2014 Bonus Quiz #2

Monday February 3, 2014Regular Quiz #2

Monday February 10, 2014Spring Break

Monday February 17 22

Test #2

Monday February 24, 2014

Bonus Quiz #3

Monday March 3, 2014Bonus Quiz # 4

Monday March 10, 2014Quiz #3

Monday March 17, 2014

Test #3

Monday March 24, 2014

Quiz # 4

Monday March 31, 2014

Make-up test

TBA

Final Exam (3 hours)

TBABest 3 out of 4 Bonus Quizzes (10 minutes duration) will be worth 1.5 marks (to be added to the total grade marks).If you missed one test, you need to fill out McMaster Absence Forms on time. Accommodation for missed test requires you to see the instructor. No accommodation will be granted through e-mails.

Accommodation for missed test = write a make-up test

See important note below If you have written 3 tests and if you have passed all 3 tests, I will take the best 2 tests out of 3 tests. If you have passed two tests, but failed one test, you must write the make test and pass the make-up test. Now I will take the best 2 tests out of 3 tests. If you missed only one test, you must write the make-up test and pass the make-up test. Now I will take the best 2 tests out of 3 tests. In all other cases, weight of each test will be 13.33 percent.If you missed one test/quiz, you need to fill out McMaster Absence Forms on time. Accommodation for missed test requires you to see the instructor. No accommodation will be granted through e-mails.

Accommodation for missed test: write a make-up test.

Bonus Assignment: Avenue Drop Box Deadline: 11:59 PM Monday March 3, 2014Select one case study either from chapter 12 or chapter 13 and critique the case study.Explain what macroeconomic hypothesis is studied in the case study and what should be the direction of future research.

The following course outline is based on the 4th edition of the textbook1.Unemployment

Chapter 6

Pages: 176-188, 206-2102.Growth Theories

Chapter 7 and 8

Pages 220-240, 250-253, 270-271, 280-285

3.Basic Mundell-Flemming Model

Chapter12

Pages: 379-401, 410-412, 417-4194. Aggregate Supply

Chapter13Pages: 426, 430, 432-435, 443-4445.*A Dynamic Model of Aggregate Demand and Aggregate Supply

Chapter14

Pages: 460-488

6.Stabilization Policy

Chapter 15

Pages: 512-514, 517, 519-524, 528, 532-533

7.Government Debt and Budget Deficits

Chapter 16

Pages: 536-537, 540-542, 545-550, 553-554 8. Consumption Chapter 17

Pages: 574-591, 592-593, 596-5979.Investment

Chapter 18

Pages: 606-612, 616-617, 623-62510.Money Supply and Money Demand

Chapter 19

Pages: 637-640, 645-65111.*Epilogue

Pages: 657-664

* If time permitsPractice Problems:

Students are encouraged to attempt all of the problems in the Courseware dealing with each section of the course. You are encouraged to spend much of your study time in this course working out the solutions to problems, either alone or in study groups. It is to be emphasized that the discussions that arise while working in small groups can be of great help in mastering the material at hand.

Academic Dishonesty

Academic dishonesty consists of misrepresentation by deception or by other fraudulent means and can result in serious consequences, e.g. the grade of zero on an assignment, loss of credit with a notation on the transcript (notation reads: Grade of F assigned for academic dishonesty), and/or suspension or expulsion from the university.

It is your responsibility to understand what constitutes academic dishonesty. For information on the various kinds of academic dishonesty please refer to the Academic Integrity Policy, specifically Appendix 3, located at http://www.mcmaster.ca/senate/academic/ac_integrity.htm

The following illustrates only three forms of academic dishonesty:

Plagiarism, e.g. the submission of work that is not ones own or for which other credit has been obtained. (Insert specific course information, e.g. style guide)

Improper collaboration in group work. (Insert specific course information)

Copying or using unauthorized aids in tests and examinations.

(If applicable) In this course we will be using a software package designed to reveal plagiarism.