Honors Economics Mr. Crawford
HONORS ECONOMICS UNIT OBJECTIVES
UNIT I: FUNDAMENTALS OF ECONOMICS
The focus of this unit is scarcity. We will examine some methodological questions in economics, and cover such concepts as scarce resources, unlimited wants, and tradeoffs in decision-making. We will analyze the different economic systems--market, command and traditional--that have been used to answer the questions of what to produce, how to produce and for whom to produce. Finally, this unit will introduce the student to the economic way of thinking.
OBJECTIVES

1. Describe and analyze the "economic way of thinking"
2. Describe the methodology used in economics
3. Graph and interpret data
4. Graph and distinguish between inverse, direct and zero relationships
5. Graph and distinguish between constant and variable relationships
6. Identify the conditions that give rise to the economic problem of scarcity
7. Define Opportunity Cost
8. Identify the Opportunity Costs involved in various courses of action
9. Construct a Production Possibilities curve from sets of hypothetical data
10. Apply the concept of Opportunity Cost to a Production Possibilities Curve
11. Analyze the significance of different locations on, above or below a Production Possibilities Curve
12. Identify the three economic questions every economic system must answer
13. Compare and contrast the economic philosophies of Adam Smith and Karl Marx
14. Describe and analyze the economic goals of different economic systems
15. Analyze the advantages and disadvantages of different economic systems
UNIT II: SUPPLY AND DEMAND
The laws of Supply and Demand are the absolute fundamentals of economics; as President John F. Kennedy once said: "Teach a parrot to say 'supply and demand' and you'll have an economist." Supply and Demand are tools for understanding a wide variety of specific issues as well as the operation of the entire economic system. In this unit, we will learn that Supply and Demand curves are models for human behavior, and we will learn to analyze the determinants of Supply and Demand and the ways in which changes in these determinants affect Supply and Demand curves. Emphasis will be placed on the process by which equilibrium price and quantity are determined and the impact of government policies such as price floors, taxes, tariffs and quotas. In particular it is important to be able to make the distinction between movements along the curves and shifts in the curves themselves.

We will then move on to the material that is the heart of a Macroeconomics course. We will build the components of the Classical Aggregate Supply and Aggregate Demand model, including the consumption function, the investment function, the marginal propensity to consume and to save, and the multiplier, and will practice the simple algebra of income determination and equilibrium.

OBJECTIVES

  1. Describe the behavior of buyers and sellers in a competitive marketplace

  2. List and explain the determinants of Demand

  3. Differentiate between a "change in demand" and a "change in quantity demanded"

  4. List and explain the determinants of Supply

  5. Differentiate between a "change in supply" and a "change in quantity supplied"

  6. Define and distinguish between the Income and Substitution effects

  7. Draw a graph of a Supply and Demand schedule from data

  8. Define Equilibrium

  9. Determine what Equilibrium price and quantity will be when given the Demand and Supply data for a good

  10. Define and graph Price Ceilings and Price Floors

  11. Analyze the effects of Price Ceilings and Price Floors on a competitive market

  12. Define and describe the concepts of Surplus and Shortage and how they relate to Price Ceilings and Price Floors

  13. Describe the phases of the Business Cycle

  14. Identify the phases of the Business Cycle when given the appropriate economic data

  15. Define and graph Aggregate Demand, Aggregate Supply

  16. List and explain the basic causes of shifts in Aggregate Demand and Aggregate Supply

  17. Determine equilibrium Aggregate Demand and Aggregate Supply

  18. Describe what determines the amount of goods and services produced and the level of employment in the Classical theory of Aggregate Supply-Aggregate Demand
UNIT III: MEASURES OF ECONOMIC PERFORMANCE
The "nuts and bolts" performance of any national economy is usually measured in terms of Gross National Product, Gross Domestic Product, and the levels of inflation and unemployment. This unit will cover the components of gross income measures and the costs of inflation and unemployment. Students will learn to distinguish between nominal and real values, and how to use price indices to convert nominal magnitudes into real magnitudes. As the course moves from static descriptions to dynamic models, we will discuss the actual levels of inflation, unemployment, GNP and GDP in the United States.
OBJECTIVES
  1. Analyze the components of the Circular Flow Diagram and use it to explain how a single purchase can influence all the Macro flows in the country
  2. Describe the purpose of National Income Accounting
  3. Explain how we measure GNP and GDP
  4. Explain what Goods and Services are counted in GNP and GDP as Consumption, Investment, Government Expenditures, and Net Exports
  5. Describe the purpose of a Price Index
  6. Explain how a Price Index is calculated
  7. Use a Price Index to calculate the rate of Inflation
  8. Distinguish between Demand-Pull inflation and Cost-Push Inflation
  9. Describe the difference between Nominal and Real GNP
  10. Explain how Unemployment is measured in the United States
  11. Calculate Unemployment and Employment Rates from appropriate data
  12. Differentiate between Frictional, Cyclical, Structural and Seasonal Unemployment
UNIT IV: POLICY ECONOMICS
An important step in analyzing Aggregate Demand and understanding the debate among policy-makers is to study the theories and effects of Fiscal and Monetary Policy. You will build the components of the Classical and Keynesian models, including the consumption function, the investment function, the marginal propensity to consume and to save, and the multiplier, and will determine Keynesian equilibrium. You will identify the goals, tools, and expectations of fiscal policy before moving on to the definition of money, fractional reserve banking, and the Federal Reserve System. You will learn the determinants of the supply and demand for money, and how equilibrium in the money market determines interest rates creates changes in Aggregate Supply and Aggregate Demand.

Finally, you will explore the deep divisions among economists about Macroeconomic policy, and will examine the policy debates between Keynesian, Neo-Classical, Rational Expectations, and Supply-Side economic theorists.
OBJECTIVES

  1. Explain how Consumption and Saving are related to Disposable Income in the Keynesian model

  2. Describe and calculate from given data the Marginal Propensity to Consume and the Marginal Propensity to Save

  3. Describe the Multiplier

  4. Describe how Fiscal Policy can be used to stabilize the economy
  5. Explain and show graphically how Fiscal Policy can be used to reduce and Inflationary or Recessionary Gap
  6. Distinguish between Automatic and Discretionary Stabilizers
  7. Evaluate Macroeconomic conditions and determine the Fiscal Policy that can be used to improve those conditions
  8. List and explain the complications encountered in employing Fiscal Policy
  9. Define and explain the functions of money, and explain how the banking system creates money
  10. Define and contrast the definitions of M1, M2, and M3
  11. Describe the organizational structure of the Federal Reserve System
  12. Define and compare Required Reserves and Excess Reserve, and calculate the Money Multiplier
  13. Explain how Open Market Operations, the Discount Rate, and the Reserve Requirement are used to expand or contract the money supply
  14. Given a series of data, identify the economic problem and prescribe the proper Monetary Policy to correct that problem
  15. Evaluate the effectiveness of the three main tools of Monetary Policy
  16. Describe and discuss the essence of the Classical, Keynesian, Monetarist, Supply-Side, and Rational Expectations theories
  17. Analyze the tradeoffs involved in various economic policy prescriptions
  18. Compare and contrast the effectiveness of Monetary and Fiscal Policy as tools of economic stabilization