Lecture1_week1_MAE120

Course Information

• Course Title: MAE 120: Money, Growth and the Economy

• Instructor: Dr. Xueli Tang

• Contact Number: 03 92517405

• Email: xtang@deakin.edu.au

• Tutors:

  • Prof: Mike Kidd

  • A/Prof: Francesco Carli

  • Dr: Xuan Nguyen

  • PhD candidate: Sai Siddhardha Kalla

Textbook

• Authors:

  • R. Glenn Hubbard

  • Anne M. Garnett

  • Philip Lewis

  • Anthony O'Brien

• Title: Macroeconomics (4e)

• Publisher: Pearson Australia

• ISBN: 9781488612527

Textbook Requirement

• Comment: Textbook purchase is personal; optional resources like MyLab Economics are available for purchase.

Assessments

• 30%: Individual written assignment (due: 4 April 2025, week 5)

• 30%: Individual written assignment (due: 9 May 2025, week 9)

• 40%: Final exam (2 hours duration)

Study Tips

• Stay consistent with weekly work.

• Prepare seminar answers in advance.

• Use CloudDeakin regularly.

• Engage in class discussions and ask questions.

Course Topics

1. Introduction to the Global Economy (week 1)

2. Measuring the Economy: GDP (week 2)

3. Economic Growth, the Financial System (week 3)

4. Long Run Economic Growth: Sources and Policies (week 4)

5. Unemployment and Inflation (week 5)

6. Aggregate Expenditure and Output in the Short Run (week 6)

7. Aggregate Demand and Supply Analysis (week 7)

8. Monetary System and Monetary Policy (week 8)

9. Fiscal Policy (week 9)

10. The Open Economy and the International Financial System (week 10)

• Review Week: week 11

Introduction to Macroeconomics

• Definition: Study of aggregates; examines overall economic performance and change over time.

• Key Aggregates:

  • Gross Domestic Product (GDP): Total production of goods/services.

  • General Price Level: Average price measure in an economy.

Reasons to Study Macroeconomics

• Develop effective economic policies.

• Understand personal financial decisions influenced by macroeconomic factors (e.g., interest rates, unemployment).

Demand and Supply Interactions

• Learning Objectives:

  • Analyze factors influencing demand/supply.

  • Illustrate market equilibrium with graphs.

  • Assess price/quantity changes using graphs.

Demand Definitions

• Quantity Demanded: Amount consumers want to buy at a specific price.

• Demand Schedule: Table of price-quantity relationships.

• Demand Curve: Graphical representation of demand schedule.

• Market Demand: Total demand from all consumers.

Law of Demand

• Observation: Price decrease leads to quantity demanded increase; price increase leads to quantity demanded decrease (ceteris paribus).

Demand Curve Shifts

• Shifts right (D1 to D2): Increase in demand.

• Shifts left (D1 to D3): Decrease in demand.

Supply Definitions

• Market Supply: Total supply from all firms.

• Law of Supply: Price increase leads to quantity supplied increase; price decrease leads to quantity supplied decrease.

Supply Curve Shifts

• Shifts right (S1 to S3): Increase in supply.

• Shifts left (S1 to S2): Decrease in supply.

Market Equilibrium

• Definition: Quantity demanded equals quantity supplied.

• Types: Competitive market equilibrium involves multiple buyers and sellers.

Surplus and Shortage

• Surplus: Quantity supplied > quantity demanded.

• Shortage: Quantity demanded > quantity supplied.

Effects on Equilibrium

• Increase in supply leads to lower equilibrium price and higher quantity.

• Increase in demand leads to higher equilibrium price and quantity.