McMaster University Economics Department

Econ 2HH3 Intermediate Macroeconomics II

Winter Term 2014

Classroom: KTH B135

Instructor: Rashid Khan

Office: KTH 420
e-mail: khanr@mcmaster.ca
Telephone:
525-9140 ext. 27389
Office Hours:
Monday 2:30-3:20 PM
Tuesday 10:30-11:20 AM
OBJECTIVES:
The course will start with unemployment and growth theories. We review the open
economy macro model and analyze short-run macroeconomic policies. We derive the
Aggregate Supply curve, Phillips curve and Sacrifice Ratio. We bring the core of
macroeconomic policy debates in the areas of stabilization policies (fiscal and monetary
policies). We develop consumption function, investment function, and money demand
and money supply functions.
REQUIRED TEXT:
Macroeconomics, 4th Canadian edition: N.Mankiw and W.Scarth
COURSEWARE prepared by the Instructor published by the McMaster Bookstore
Marking Scheme
3 in-class Tests
40%
Best 3 out of 4 in-class Quizzes
10%
Final Exam (3 hours)
50%
Bonus Quizzes
1.5%
Bonus Assignment
1%
Bonus Quiz #1
Regular Quiz #1
Test #1

Monday January 13, 2014

Monday January 20, 2014
Monday February 27, 2014

Bonus Quiz #2
Regular Quiz #2
Spring Break
Test #2

Monday February 3, 2014

Monday February 10, 2014
Monday February 17 22
Monday February 24, 2014

Bonus Quiz #3
Bonus Quiz # 4
Quiz #3
Test #3

Monday March 3, 2014

Monday March 10, 2014
Monday March 17, 2014
Monday March 24, 2014

Quiz # 4
Make-up test
Final Exam (3 hours)

Monday March 31, 2014

TBA
TBA

Best 3 out of 4 Bonus Quizzes (10 minutes duration) will be worth 1.5 marks (to be
added to the total grade marks).

If you missed one test, you need to fill out McMaster Absence Forms on time.
Accommodation for missed test requires you to see the instructor.
No accommodation will be granted through e-mails.
Accommodation for missed test = write a make-up test
See important note below

If you have written 3 tests and if you have passed all 3 tests, I will take the
best 2 tests out of 3 tests.
If you have passed two tests, but failed one test, you must write the make test
and pass the make-up test. Now I will take the best 2 tests out of 3 tests.
If you missed only one test, you must write the make-up test and pass the
make-up test. Now I will take the best 2 tests out of 3 tests.
In all other cases, weight of each test will be 13.33 percent.

If you missed one test/quiz, you need to fill out McMaster Absence Forms on time.
Accommodation for missed test requires you to see the instructor.
No accommodation will be granted through e-mails.
Accommodation for missed test: write a make-up test.

Bonus Assignment: Avenue Drop Box Deadline: 11:59 PM Monday March 3, 2014
Select one case study either from chapter 12 or chapter 13 and critique the case
study.
Explain what macroeconomic hypothesis is studied in the case study and what
should be the direction of future research.

The following course outline is based on the 4th edition of the textbook
1.
Unemployment
Chapter 6
Pages: 176-188, 206-210
2.
Growth Theories
Chapter 7 and 8
Pages 220-240, 250-253, 270-271, 280-285
3.
Basic Mundell-Flemming Model
Chapter12
Pages: 379-401, 410-412, 417-419
4. Aggregate Supply
Chapter13
Pages: 426, 430, 432-435, 443-444
5.* A Dynamic Model of Aggregate Demand and Aggregate Supply
Chapter14
Pages: 460-488
6.
Stabilization Policy
Chapter 15
Pages: 512-514, 517, 519-524, 528, 532-533
7.
Government Debt and Budget Deficits
Chapter 16
Pages: 536-537, 540-542, 545-550, 553-554
8.
Consumption
Chapter 17
Pages: 574-591, 592-593, 596-597
9.
Investment
Chapter 18
Pages: 606-612, 616-617, 623-625
10. Money Supply and Money Demand
Chapter 19
Pages: 637-640, 645-651
11.* Epilogue
Pages: 657-664
* If time permits

Practice Problems:
Students are encouraged to attempt all of the problems in the Courseware dealing with
each section of the course. You are encouraged to spend much of your study time in this
course working out the solutions to problems, either alone or in study groups. It is to be
emphasized that the discussions that arise while working in small groups can be of great
help in mastering the material at hand.
Academic Dishonesty
Academic dishonesty consists of misrepresentation by deception or by other fraudulent
means and can result in serious consequences, e.g. the grade of zero on an assignment,
loss of credit with a notation on the transcript (notation reads: Grade of F assigned for
academic dishonesty), and/or suspension or expulsion from the university.
It is your responsibility to understand what constitutes academic dishonesty. For
information on the various kinds of academic dishonesty please refer to the Academic
Integrity Policy, specifically Appendix 3, located at
http://www.mcmaster.ca/senate/academic/ac_integrity.htm
The following illustrates only three forms of academic dishonesty:
Plagiarism, e.g. the submission of work that is not ones own or for which other credit has
been obtained. (Insert specific course information, e.g. style guide)
Improper collaboration in group work. (Insert specific course information)
Copying or using unauthorized aids in tests and examinations.
(If applicable) In this course we will be using a software package designed to reveal
plagiarism.