ECO3201 Intermediate Macroeconomics II

Under Microeconomic theory, full employment of resources is generally assumed, so that the focus of analysis is on the determination of relative prices and the allocation of scarce resources among alternatives uses. On the other hand, Macroeconomics focuses on the level of utilization of resources especially the level of employment and the general level of prices. In addition, within macroeconomics consideration is taken of the question of what determines the rate of growth of resources, growth of potential output as well as the determinants of their level of utilization at any one time. 

Course Objectives

Whereas focus of classical microeconomics is on the allocation of scare resources and their best uses implicitly assuming full employment, scarcity of resources is the normal state of the economy usually the economy operates at a substantially less than full employment, resources are, at lest temporarily, really not scarce, and the opportunity cost of additional output of almost any kind is zero. Closely associated with economy-wide problem of unemployment is the challenge of inflation and growth. With that in mind Macroeconomic II while adopting advance analytical tools focuses on;

• Determination of aggregate output in the economy 
• Assessing the relationship between output, inflation and unemployment 
• Assess the Keynesian, monetarist and new neoclassical macroeconomics theories 
• Effects of fiscal and monetary policies on real variables  

Course Learning Outcomes
At the end of the course, student should be in position to; 

• Establish the equilibrium condition in an economy in terms of saving and investment using various approaches 
• Explain the effectiveness of monetary and fiscal policies under economic conditions 
• Articulate the Philips – Curve proposition and the counter monetarist and new classical arguments