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2020ECO152 - Introduction Week 1

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25 views19 pages

2020ECO152 - Introduction Week 1

Uploaded by

WAZEER ELLIOT
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as KEY, PDF, TXT or read online on Scribd
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ECO152: Macroeconomics

Introduction
Welcome to ECO152 Macroeconomics
- Some Admin before we begin:
Lecturer details
Course Outline
Textbooks
Assessments (Notional hours)
Tutorial homework exercises
Tutorial assessments
Assignment
Module Tests
Ikamva demonstration
Group assignment
Other matters
Course Outline – Textbooks and materials
Mohr, P. 2018. Understanding Macroeconomics, 2nd edition. Pretoria: Van Schaik Publishers.

UWC Economics Department Youtube channel:


https://www.youtube.com/channel/UC-OFOPCuh0zDUyh1CZnQEXg

Exercise workbook:
Yu, D. 2020. ECO133, ECO151 & ECO152 Exercise Book. Bellville: University of Western Cape,
Department of Economics.

CORE- Econ
It is available as an open resource online at: https://www.core-econ.org/.
Assessment Schedule
Assessment Weight Marks & Duration Structure Date*
Tutorial homework 4% x 4 = 16% Submitted during
20 marks Structured questions
exercise each tutorial
Completed online in
Tutorial online 30 minutes Multiple choice
3% x 6 = 18% the week after a
assessment 20 marks questions (MCQs)
tutorial session
Date, time and venue to be
Assignment 6% 20 marks Report announced

Date, time and venue to be


1 hour 20 marks MCQs
Module Test #1 30% 40 marks 20 marks structured questions
announced

Date, time and


1 hour 20 marks MCQs
Module Test #2 30% 40 marks 20 marks structured questions venue to be
announced
Date, time and
2 hours 30 marks MCQs
Exam 100% 70 marks 40 marks structured questions venue to be
announced
Ikamva
DEMONSTRATION of resources available on Ikamva – Course
outline, slides, past test series
Complete the short 5 mark test on Ikamva
Group Assignment
Due in Term 2 (more details will follow)
Students will be assigned to a group.
The assignment is a report structured around the annual Burger
Young Economist competition. The aim is to prepare and inform the
students about this competition.
Students will be required to predict macroeconomic outcomes like
economic growth rate, inflation rate, repo rate, exchange rates, Brent
crude oil and gold prices.
Other matters
Feedback on assessments
Absenteeism from tests
Tutorials are compulsory – Please attend the group that you have
been allocated to
Academic honesty
Any form of academic dishonesty, whether during test or the fraudulent
submission of documents, will be subject to the rules outlined in the
UWC General Calendar. Tutorial tests must also be your own work, not
a group effort.
What is economics? “MACRO Chapter 1”
The science of household management where the household could
be individuals, households, or nations.
It studies the decision-making of these units in face of scarcity.
Scarcity is when we have unlimited wants, but limited means to satisfy these
wants.
What is macroeconomics? “MACRO
Chapter 1”
It studies the structure and performance of national economies and
the policies to affect it.
It looks at the “big picture” or aggregate economy.
Topics include:
Total production, income and expenditure
Economic growth
Employment and unemployment
General price level and inflation
Balance of payments
Sources of economic data
SARB Quarterly bulletin (resbank.co.za)
National accounts, business cycles
Statistics South Africa (statssa.gov.za)
Quarterly Labour Force Survey
National Treasury (http://www.treasury.gov.za/)
National budget
World Bank (data.worldbank.org)
Macroeconomic indicators for many countries
News papers
NEWS
Questions we will study…
Why is there unemployment?
Why is there inflation?
Why do some economies growth faster than others?
Why do people earn different incomes?
How can a government change any of these things?
Capitalist revolution –CORE Chapter 1
Since the 1700s, increases in average living standards became a permanent
feature of economic life in many countries.
This was associated with the emergence of a new economic system called
capitalism, in which private property, markets and firms play a major role.
Under this new way of organizing the economy, advances in technology and
specialization in products and tasks raised the amount that could be
produced in a day’s work.
This process, which we call the capitalist revolution, has been accompanied
by growing threats to our natural environment, and by unprecedented global
economic inequalities.
Economics is the study of how people interact with each other, and with the
natural environment, in producing their livelihoods.
Industrial
Revolution

GDP per capita for five centuries – CORE Chapter 1


A brief history of economic thought
Mercantilism (16th to 18th century)
Dutch and British East India Companies
Focused on maximising exports of the country (often at the expense of other
countries)
Classical Economics (18th to early 20th century)
Adam Smith (1776) – An Inquiry into the Nature and Causes of the Wealth of
Nations
Invisible hand – economic co-ordination happens spontaneously without
intervention from government or institutions
Laissez-faire thinking – governments should not intervene in economies
Say’s law: Supply always equals demand
A brief history of economic thought
Keynesian Economics (Early 20th century)
John Maynard Keynes (1883-1946) – The General Theory of Employment,
Money and Interest (1936)
Great Depression (1929- late 1930s)
Called for fiscal and monetary policy to help with Depression
Mostly what we focus on
Monetarism (Late 20th century)
Milton Friedman (1912-2006)
Quantity theory of money: Governments should only aim to improve long-
term economic growth and not intervene in markets
Impossible trinity of money
The Great Depression
Where are we now?
Globalisation
How economies interact with each other
Institutional economics
How institutions (like property rights) impact economic outcomes
Behavioural economics
Are we rational human beings like often assumed by economic models?
Environmental economics
What are the impact of economics on the environment? And how do we use the environment for economic gain?
Developmental economics
How to tackle poverty and development?

Economics is a complex field with elements of different schools of thought often intermingled with
each other and builds on one another.
More course at higher levels which cover these topics in-depth.
Up next…
Basic concepts, relationships and issues

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