Adopted Reference Style

Course Description:

School/Portfolio: The Business School

Course Code/ID: BUECO1508

Course Title: Business Macroeconomics

Teaching Location: All Partners

Program(s): Bachelor of Commerce/Bachelor of Business

Author: Alex Millmow

Level: Introductory

Semester: Semester 2, 2013

Prerequisite(s): Nil

Corequisite(s): Nil

Exclusion(s): Nil

Credit Points/ 15 Progress Units:

ASCED Code: 091901

Adopted Reference Style APA

1 COURSE ORGANISATION:

1.1 Student Responsibility It is the responsibility of every student to be aware of the requirements for this course, and understand the specific details included in this document.

For full details of programs and school procedures, please refer to the University of Ballarat handbook (http://www.ballarat.edu.au/future-students/handbook ) and The Business School Programs Handbooks available at http://www.ballarat.edu.au/business/handbooks

Students should be aware of the content of the handbooks, particularly: :  Special Consideration process and forms  Appeal process  Assignment Coversheet  Unsatisfactory progress - Early  Submission of tasks and assignments Intervention  Grading codes

Semester 2, 2013- Insert Semester Detail followed by Teaching Location Page 1 of 13 CRICOS Provider Number 00103D Course Description: insert Course Code/ID and Course Title here

1.2 Staff The most appropriate contact is your teacher. If necessary they will contact the Course Coordinator at the University of Ballarat.

Coordinator Lecturer Tutor Name: Alex Millmow Email: [email protected] UB www.ballarat.edu.au Web:

1.3 Consultation Hours

Your lecturer will inform you about consultation hours. It’s best to contact me by email.

1.4 Prescribed Text This subject will be conducted on the basis that students have a copy of or, at least , have access to:

Essentials of Economics (2ed) by Hubbard, Garnett, Lewis and O’Brien

This was the same text used for BUE1507 Business Microeconomics

1.5 Plagiarism Plagiarism is presenting someone else work as your own and is a serious offence with serious consequences. As set out in the University Regulation 6.1.1, students who are caught plagiarising will, for a first offence, be given a zero mark for that task. A second offence will result in a failing grade for the course(s) involved and any subsequent offence will be referred to the Student Discipline Committee. Student must be aware of the University Regulation 6.1.1 Student Plagiarism, available at http://www.ballarat.edu.au/__data/assets/pdf_file/0005/44996/r6_1_1plagiarism.pdf . The link to the library website for more information is: http://www.ballarat.edu.au/library/assignment-and- research-help/referencing

Students must:  fully reference the source(s) of all material, even if you have re-expressed the ideas, facts or descriptions;  acknowledge all direct quotations; and  not submit work that has been researched and written by another person

Turnitin – Turnitin is a software application that allows students to check their assignments for referencing and citation omission or incorrect paraphrasing.

1.6 Late Submission Assessment tasks submitted after the due date, without prior approval/arrangement, will be penalised at 10% of the available marks per day. Requests for extension of time must be

made with the lecturer concerned and based on Special Consideration guidelines http://policy.ballarat.edu.au/student_services_and_administration/enrolment/special_conside ration/ch01.php.

1.7 Course Evaluation We welcome feedback as one way to keep improving this course. Students are encouraged to provide course feedback through eVALUate, UB’s online student feedback system. eVALUate will be accessed during Weeks 10 and 11 by the UB Student Survey dashboard system using UB student user names and passwords.

1.8 UBOnline UBOnline (also known as Moodle) is used to host course resources for all courses. Students can download lecture and tutorial notes to support class participation. Students login to the UBOnline at https://ubonline.ballarat.edu.au/login/index.php.

2. OBJECTIVES

This course is a prerequisite for second and third year Economics courses. It is also one of the prescribed courses accredited for professional qualifications in Accounting. The course aims to provide Students of B.Com, B.Bus. and B.Man. with the foundations for a better understanding of both the domestic and global macroeconomic business environment for firms and consumers. It focuses on the analysis of Economic Indicators to identify Economic problems, the use of Economic Theories to identify the causes of the problems, and the understanding of the impact of Economic Policies as solutions to Economic problems on business operations.

Knowledge

Students completing this course should attain the following:

 Understand the framework of the Macroeconomic business environment: the relationship between Macroeconomic problems, theories and policies  Appreciate the meaning of Macroeconomic indicators  Understand the nature of Macroeconomic problems  Understand the differences of Macroeconomic theories  Understand the functions of Macroeconomic policies  Understand the key economic forces within the global business environment

Skills

 Acquire basic Research skills in collecting and collating Macroeconomic data  Be capable of identifying Economic trends and problems  Have the capacity to apply relevant theories to explain the cause(s) of Macroeconomic problems

 Have the capacity to critically evaluate the impact of various policy options on business  Be able to apply Economics skills in the analysis of implications of the business environment for business  Have the oral and written communication skills to successfully conduct an Economic analysis for business purposes

Values

 Foster a habit to update with market information and follow key economic and business trends  Be reflective on economic problems  Value the role of economic theory as a way of analysing macroeconomic problems  Value the implications of economic policies for business  Develop an interest in economics and its association with business  Value the knowledge of Economics as a life-long activity for the self development of business skills

3 CONTENT:

Topics and sub-topics may include:

 Economic Indicators, National accounts, Circular flows  The Business cycle and Macroeconomic problems  The relationship between Economic performance and Business performance  Theories of Income Determination: the Classical model versus the Keynesian Income-Expenditure Theory  The role of Money and interest rates, Banks and the Reserve Bank of Australia in the economy  Economic Policies and Policy mix: Fiscal policy and Monetary policy, and the impact of Economic policy on business and consumers  Trade and exchange rates, the impact of globalisation

4 LEARNING TASKS AND ASSESSMENT:

Summary It is emphasised that this course requires a significant commitment outside of formal class contact. The learning tasks in this course may include classes (lectures, tutorials or seminars), required reading, the preparation of answers to set questions, exercises and problems, and self-study. In addition, students may be required to complete an assignment, test or examination.

Summary of suggested time allocations for this course

Classes 3 hours per topic for 12 36 hours topics

Reading 2 hours per topic for 12 24 hours topics Preparation of set questions, 4 hours per topic for 12 48 hours exercises and problems topics Preparation of assignment 20 hours Study and revision for test 22 hours and end of semester examination TOTAL 150 hours

Attendance and Participation It is in students’ interest to make every effort to attend all the classes for this course and to complete all preparatory and assessment tasks. It is our experience that those students who do not attend class or carry out the associated activities are more likely to do poorly or to fail the course completely.

Learning Task Assessment Weighting Week Due A closed book mid- Mid-semester test 20% Week 6 semester test Assignment Written Assignment 20% Week 10 A closed book examination Final Examination 60% Exam Period

Note on Assessment

At the University of Ballarat a PASS is usually achieved at 50%. For courses listed below, a mark of at least 40% in the examination must additionally be achieved.

BUACC1506, BUACC1507, BUACC1521, BUEBU1501, BUECO1507, BUECO1508, BUENT1531, BUHRM1501, BULAW1502, BULAW1503, BUMGT1501, BUMKT1501, BUMKT1503, BUTSM1501, BUTSM1502, BUACC5901, BUACC5930, BUACC5937, BUECO5903, BUHRM5912, BULAW5911, BULAW5914, BULAW5915, BUMGT5921, BUMKT5901, BUMKT5922.

Students are strongly advised to attempt ALL assessment tasks. Students who do not submit a task(s) or fail a task(s) in the semester will be identified as a ‘student at risk’ of unsatisfactory academic progress (outlined in the Business School Handbooks) and will be directed to the School’s Intervention Program. Students who encounter difficulties or who are otherwise concerned regarding their progress should consult their lecturer.

Assessment criteria set out the details by which performance in each task will be judged. This information will give a clear and explicit understanding of the expected standards to be achieved relative to the marks awarded.

Semester 2, 2013- Insert Semester Detail followed by Teaching Location Page 5 of 13 CRICOS Provider Number 00103D Course Description:

4.1. MID-TERM TEST

Before the middle of the Semester there will be a short Test worth 20%. The questions will be mostly Short Answer question(s). The Test will take place during one of the Lecture sessions. You do not have to pass this Test in order to pass the Subject. However it will determine your final aggregate score.

Macroeconomic Assignment

Submit answers to all the following questions. Be sure to explain your reasoning clearly and fully and use diagrams where appropriate. The questions are applied and analytical. They can only be answered by the student having a knowledge of macroeconomic principles. Students should note that this learning task must be an individual piece of work. That is, it must be the creation of the person submitting it.

DO NOT SCAN OR PHOTOCOPY MATERIAL INTO YOUR ANSWERS

1. Consider a macroeconomy was initially at equilibrium level of real GDP. Using an aggregate demand and aggregate supply diagram or model of the economy, graphically illustrate and discuss the short-run and long-run effects of the following events upon the economy:

(a) A political election campaign is held. (b) There is an increase in spending on infrastructure. (c) An increase in international economic turbulence. (d) A depreciation in the foreign exchange rate value of the economy’s currency. (e) A fall of business confidence within the economy (f) The country’s main exports rise in price while the goods the country imports fall in price ie its terms of trade improves in the country’ favour (3 marks)

2. Collect an article from an Australian newspaper that relates to the current Australian macro economy. In a paragraph indicate which section of the course it applies to, why you selected the article and provide a brief summary of what the article is actually about (1 mark)

3. Many people find the current unemployment figures for Australia at 5.5% unbelievable. Why is this? Why might the official statistics be inaccurate? (1 mark)

4. Using the simple Keynesian model to assess the implications for equilibrium GDP and the level of savings of an increase in the savings function. What

Semester 2 2013 Page 6 of 13 CRICOS Provider Number 00103D Course Description: BUECO1508 Business Macroeconomics

eventually happens to the level of savings? What would happen to equilibrium income if there is a sustained rise in private investment spending? (2 Marks)

5. State the difference between:

-economic contraction and economic expansion. -between appreciation and depreciation - between the balance of payments deficit and the budget deficit -between the bond rate and interest rate (2 marks)

6. When is monetary policy most effective? When is fiscal policy most effective (2 marks)

7. Distinguish between ongoing demand pull and ongoing cost push inflation. Carefully draw them. Why might it be difficult to establish the extent to which a given rate of inflation is either demand pull or cost push? (2 marks)

8. The Australian economy has gone nearly 22 years without a recession meaning a whole generation have grown up never experiencing a recession. What are the macroeconomic dangers now facing Australia? When commentators suggest that the Australian economy is a two -speed economy what specifically are they referring to? (2 marks)

9. Why do economists study economic indicators? What are some examples of Leading indicators?(2 marks)

10.The Australian dollar has fallen by 12 US cents in the last few months. What are the macroeconomic consequences of this currency movement? (3 marks)

Due Date: Week 10

4.2. Final Exam

The Examination will be held during the official University Examination period. The Examination will be a formal supervised testing situation in which students are required to make responses to unit-related questions. The purpose of the Examination is to enable the student to:

 Display their level of knowledge and understanding of the theories and content of the unit  Test your ability to think clearly under time constraints and to record this process in a clear and concise form.

ASSESSMENT OF EXAMINATION – The Examination will account for 60 percent of the total Assessment. The Examination will be of two-hour duration. Grading will be on an

individual performance basis. The Examination will be assessed according to the following criteria:

 The ability of students to display their level of knowledge and understanding of the theories and content of the unit  The ability to think clearly under time constraints and to record this process in a clear and concise form.

CONTENTS TO BE EXAMINED will be the work covered in Class and by the prescribed Text. This will be further clarified during the Revision period, prior to the Examination.

5 SCHEDULE:

As the semester’s timetable will vary across the UB locations, the following schedule outlines a set of topics that will be covered in this unit. The nominal teaching load is three hours a week for 11 to 12 weeks. If your location runs this course for less than 12 weeks, your lecturer will adjust the timing of the delivery of the materials.

Please note that the sequence and content of lectures and tutorials may need to be changed and the following information should be used as a guide.

AN INTRODUCTION TO MACROECONOMICS READING TUTORIAL S Why does Economics matter? Chapter 1 No Tutes  Introduction to Economics, What do Economists do First Week exactly?  Methodology in the Study of Economics “The price is right”- a quick look at the Market System. ‘As Good as it Gets’ : A quick trip around the current Chapter 12 Tutes Australian economy Begin The Washing Machine of our Economy Chapters 12  The Circular Income flow and macroeconomics and 13  What makes the economy grow?  The driving force of Macroeconomics - the Theory of Income determination  The Multiplier Income Determination - the Keynesian model of inflation Chapter 13 and unemployment The Powerhouse of the economy Chapter 14 the Keynesian analysis of the business cycle. What is inflation? Unemployment?

‘AS easy as AD-AS A simple model to understand the economy Showing inflation and unemployment using AD-AS model

Is it all about the Money?’ Chapter 15 The Nature and Role of Money – Functions of money, the Financial system The Money Market and supply and demand The essentials of Macroeconomic Policy Chapter 16

Macroeconomic Policy Goals Monetary Policy, interest rates Transmission Mechanisms

‘Fiscal policy. government spending and taxation Chapter 17 Contemporary overview of Australian Fiscal and Monetary policy

Let’s Trade Chapter 18

The basis for international trade Free trade versus protectionism Trade blocks and free trade agreements What’s Globalisation got to do with it? Chapter 19

A small, open and vulnerable economy: Australia in the global economy and our macroeconomic policy works.

The Balance of Payments Our foreign debt. What’s the Exchange rate? The economic consequences of Globalization Wrap up Fitting the theory to the practice-why are economic problems sometimes difficult to solve? Revision lecture and an update on the state of Australian economy and the challenges it faces

6. ADDITIONAL RESOURCES:

References on Business Economics (Library Dewey decimal number is U330). Do not just quote these to make it look like you have done extensive research. The main text cited for your assignment should be the Prescribed Text). Any more should imply further research.

Atkinson, G.B.J. (1998) Business Economics. Harlow, Essex: Addison-Wesley.

Brewster, David (1997) Business Economics: decision-making and the firm. London: Fort Worth.

Crompton, Paul, Swann, Michael, Hopkins, Sandra, and McEachern, William A. (2002) Macreconomics: a contemporary Introduction. Melbourne: Nelson.

Greenwood, Malcolm S. and Carter, M.J. (1997) Business Economics: concepts and cases. London: International Thomson Business Press.

Hornby, Win., Bob Gammie, and Stuart Wall. (2001) Business Economics. 2nd Edition. Sydney: Pearson.

Jackson, John. and McIver, Ron. (2003) Macroeconomics. Seventh Edition. Boston: McGraw-Hill

Neil Harris Business Economics: theory and application. 2001. Melbourne: Butterworth and Heinemann.

McAleese, Dermot (2001) Economics for Business: Competition, Macro-stability and Globalisation. 2nd Edition. Sydney: Pearson.

Perman, Roger. (1999) Business Economics. New York: Oxford University Press.

Sloman, J. and Norris, K., Principles of Economics, 2010, Third Edition

M Stewart (19670 Keynes and After Penguin Still the best and simplest guide to Keynes

Williams, Jeremy B. and Lawrey, Roger. (2000) New Economics for the Asia-Pacific: an issues-based modular approach. Sydney: The McGraw-Hill Companies, Inc.

Worthington, Ian., Chris Britton, and Andy Rees. (2001). Economics for Business: Blending theory and practice. Sydney: Pearson.

Additional References on Macroeconomics (Library Dewey Number is U338)

Abel, Andrew B. and Ben S. Bermanke (2001). Macroeconomics. 4th Edition. Sydney: Pearson.

Baumol, W.J; Binder, A.S; Gunther, A.W, & Hicks, J.R.C. (1992). Economies: Principles and Policy. 2nd Ed., Sydney: Harcourt Brace Jovanovich.

Blanchard, Olivier Jean. (2000) Macroeconomics with Active Graphs CD. 2nd Edition. Sydney: Pearson.

Colander, David and Edward Gamber (2002). (2002). Macroeconomics. Sydney: Pearson.

Cowie, Judy, John Snelling, and Vern Marshall. (2001) Reading Between the Lines 7th Edition. Sydney: Pearson.

Fraser, I; Fraser, S; Gionea, J. and Vickers, D. (1994). Economics for Business. Sydney, McGraw Hall

Froyen, Richard T. (2002) Macroeconomics: theories and policies. 7th Edition. Sydney: Pearson.

Gordon, Robert J. (2000) Macroeconomics. 8th Edition. Sydney: Pearson.

Hastings, T; Spiers, D. & Davis, B. (1996). Study Guide to Accompany Microeconomics, Third Australian Edition. Melbourne: Longman.

Jackson, J; McIver, R. (2003). Macroeconomics. 8th Ed., Sydney: McGraw Hill (A textbook we used in 2004, not a bad book if you can get your hands on it)

Lewis, Philip, Peter Drake, Anne Garnett, D Johannes Juttner, Keith Norris, and Malcolm Treadgold. (1998) Issues, Indicators and Ideas: a guide to the Australian economy. 2nd Edition. Sydney: Pearson.

Neal, Penny. (2002) Macroeconomics Study Guide to the 2nd edition of Economics and Macroeconomics by Sloman and Norris. Sydney: Pearson.

Waud, R.N. Maxwell, P.; Hocking, R; Bonnici, J. and Ward, I. (1996). Economics: Third Australian Edition. Sydney: Longman.

Williamson, Stephen (2002) Contemporary Macroeconomics. Sydney: Pearson.

Library resources:

Don’t forget the Library’s PRINT and online databases. Attend a library skill session if you need help with these.

Internet resources:

Australian Securities and Investment Commission: www.asic.gov.au

The Stock Exchange: www.asx.com.au

The Australian Bureau of Statistics: www.abs.gov.au

The Reserve Bank of Australia: www.rba.gov.au

The Commonwealth Treasury: www.treasury.gov.au

7. ADDITIONAL TIPS:

How to Study BUECO1508

The following is a guide assisting Students in studying this course. i) Have complete access to the textbook (and if possible study guide) over the whole course and the exam questions are built around it. ii) PLEASE DOWNLOAD THE POWERPOINT LECTURE NOTES, TAKE THEM TO CLASS AND SUPPLEMENT THEM BY TAKING DOWN NOTES FROM WITH WHAT YOUR LECTURER IS SAYING!!!! The Lectures are not taped. iii) Attend all lectures and read all recommended materials as this will give you a broad understanding of the topic and where it fits into the subject. iv) Tutorials will begin in the second week of the semester and follow weekly. v) Tutorial exercises will be placed on Moodle. vi) Prepare answers to all tutorial / workshop questions as you may be asked to present and explain a solution in class. vii) Tutors are not expected to cover all questions in tutorials, so access the solutions from the relevant Moodle folder in the following week. viii) Tutorials will be a forum for practical application of the theories you are taught in lectures. ix) Some interactive discussion and participation will be expected in tutorials. x) Lectures, tutorials and readings are not substitutes but complementary. xi) For some assignment and exam preparation extra reading may be required and you will be advised what to read in advance. xii) Revision exercises in the form of past mid-term tests and exam paper solutions will be made available for students to work through.

Semester 2 2013 Page 13 of 13 CRICOS Provider Number 00103D