One of the major important objectives of this course is to enable students to understand the sources of (or reasons for) three types of variation in per capita output: cross-sectional variation (e.g., international differences in living standards), low-frequency (long-run) time-series variation (economic growth), high-frequency (short-run) time-series variation (business cycles). To do this, we develop, analyze and perform simulations of two types of macroeconomic models: the Solow model and the Aggregate Demand/Price Adjustment model. These models enable us to evaluate the effects of a variety of factors, such as savings rates, population growth, consumer confidence and monetary and fiscal policy on variables such as GDP, inflation, interest rates and exchange rates.

This exam is appropriate for undergraduate economics majors and others with a strong economics background. Students planning to take exemption exams in both B6005 and B6006 (Managerial Economics) are required to take the Managerial Economics exam prior to the first term. B6005 must be taken prior to the second term.

Closed book, 3 hours, calculators permitted.

Abel, Andrew and Bernake, Ben. Macroeconomics. (New York: Addison-Wesley)

Hall, Robert and Taylor, John. Macroeconomics. Second edition, with Macrosolve software (New York: Norton, 1993), especially chapters 1-9.

Mankiw, N. Gregory. Macroeconomics. (New York: Worth, 1994) chapter 4, ("Economic Growth").

Wonnacott, Thomas and Wonnacott, Ronald. Introductory Statistics for Business and Economics. (New York: Wiley, 1972), chapter 23 ("Index number").