Economics 242: Macroeconomic Theory and Policy
Professor Ellen Foster
Economics 242 is one of the core requirements for all majors and minors in Economics. The course is designed to provide a firm basis in modern macroeconomic theory and policy. We will use the tools of analysis developed in the theoretical segments of the course to analyze real-world macroeconomic issues and problems. Topics covered include the determination of aggregate levels of output (GDP) and income, employment, inflation, wages, and interest rates. We will study the behavior of the macroeconomy in the short run, medium run, and the long run. We will also discuss the government’s budget deficit, and its possible link with the trade deficit, the national debt, and saving and investment.
Students intending to major in economics should try to take this course by the beginning of their junior year. This course may also be attractive to some non-majors, especially those who are interested in gaining a better understanding of the national economic environment, or in learning about monetary and fiscal policies and their effect on the economy.
Classes will be a mixture of lecture, discussion and in-class exercises. Grades will be based on two term tests, graded homework assignments and a final exam. Students are expected to keep up with current economic news and actively participate in class discussions. By the end of this course, you should be able to read publications like The Wall Street Journal or The Economist and understand their coverage of macroeconomic issues.
Economics 101 and Math 101, 110, 113 or equivalent AP credit are the prerequisites for this course. The course will extensively incorporate graphs and equations.