Postgraduate Course: Understanding Economies (MBA) (CMSE11244)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Not available to visiting students |
| SCQF Credits | 10 |
ECTS Credits | 5 |
| Summary | This course is designed to provide a sufficient understanding of macroeconomics to allow an understanding of relevant articles in the Financial Times, Economist, etc and reports by government agencies, the World Bank, or consultants. This is seen as essential to an understanding of business because Macroeconomics affects all companies by
(a) level of demand for products;
(b) interest rates - with their effect on the costs of the firm;
(c) the exchange rate - which tends to intensify or reduce competition even for firms not overtly engaged in trade;
(d) and each of these elements interact both with themselves and with other factors, such as government policy.
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| Course description |
Demand, Supply and the Market
The "Market"; demand and supply curves; behind the demand curve; Tastes, Prices and Incomes; behind the supply curve: technology, input costs and government regulations.
The Determination of National Income
The circular flow of income; actual values of consumption, investment, saving, government expenditure, and foreign payments. Components of aggregate demand: planned amounts of consumption, planned investment spending; aggregate demand; equilibrium output; the equality of planned savings and planned investment expenditures.
The Multiplier, Fiscal Policy and Foreign Trade
a) The Multiplier
The multiplier; the paradox of thrift.
b) Fiscal Policy and Foreign Trade
The government and aggregate demand; the balanced budget multiplier; the government budget; deficits and the fiscal stance; automatic stabilisers; the limitations on active fiscal policy; The National Debt and the deficit; foreign trade and income determination.
Money and Modern Banking
Money and its functions; commercial banks and the money supply; the money multiplier; competition between banks. The demand for money.
Interest Rates and Monetary Transmission
The Bank and the money supply; reserve requirements; the discount rate; open market operations; the repo market; the lender of the last resort. Equilibrium in financial markets.
Monetary control; the targets and instruments of monetary policy; the transmission mechanism: wealth effects and the credit channel.
Aggregate Supply and Inflation
Aggregate demand; aggregate supply; equilibrium inflation. Labour market and wages. Short run aggregate supply. Adjustment to equilibrium, supply and demand shocks.
Inflation
Definition of inflation. The Phillips curve in the long run and in the short run, supply shocks. Costs of inflation; controlling inflation.
Exchange Rates and the Balance of Payments
The Forex market; Exchange rate regimes; the balance of payments, determinants of the current account; the capital account; speculation and interest rate parity; internal and external balance. Long run equilibrium, the role of foreign debt or assets.
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Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | For Business School PG students only, or by special permission of the School. Please contact the course secretary. |
Course Delivery Information
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| Academic year 2014/15, Not available to visiting students (SS1)
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Quota: None |
| Course Start |
Semester 1 |
| Course Start Date |
15/09/2014 |
Timetable |
Timetable |
| Learning and Teaching activities (Further Info) |
Total Hours:
100
(
Lecture Hours 20,
Summative Assessment Hours 30,
Programme Level Learning and Teaching Hours 2,
Directed Learning and Independent Learning Hours
48 )
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| Assessment (Further Info) |
Written Exam
100 %,
Coursework
0 %,
Practical Exam
0 %
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| Additional Information (Assessment) |
Written Exam 100 % |
| Feedback |
Not entered |
| Exam Information |
| Exam Diet |
Paper Name |
Hours & Minutes |
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| Main Exam Diet S1 (December) | | 2:00 | |
Learning Outcomes
Knowledge and Understanding:
¿ The elements measured by GNP, GDP and National Income
¿ The role of savings and investment - and more generally the role of leakages (savings, taxation and imports) and injections (Investment, Government expenditure and Exports) in determining the level of GDP
¿ The implications of rising GNP for tax revenues and the current account of the balance of payments
¿ The role of government in expanding aggregate demand through fiscal policy
¿ The creation of money by the banking system and the limits due to reserve requirements
¿ The role of the interest rate in affecting the demand for money
¿ The role of money supply in inflation
¿ The use of monetary policy to control inflation and the role of the central bank
¿ The determinants of changes in the current and capital accounts of the balance of payments ¿ and their impact on exchange rates
Cognitive Skills:
This course is principally geared to providing an understanding of the macro-economy. Skills training is not explicitly part of the course. However, developing this understanding inevitably develops and exercises the following important skills:
(a) Logical thought in analysing cause and effect in the presence of interdependence
(b) Clarity of exposition in explaining complex systems
(c) The use of symbols and simple equations to model real-world phenomena
(d) Understanding data in the presence of multi-causal phenomena (in which it complements the course on statistical analysis)
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Additional Information
| Graduate Attributes and Skills |
Not entered |
| Keywords | Not entered |
Contacts
| Course organiser | Prof Jonathan Crook
Tel: (0131 6)50 3802
Email: j.crook@ed.ac.uk |
Course secretary | Miss Kate Ainsworth
Tel: (0131 6)51 3854
Email: Kate.Ainsworth@ed.ac.uk |
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