|Course objectives (competences):
After completion of the course, students should be able to explain:
- Why economics is a science of how people and societies choose to allocate scarce resources and how market economies are solving the central economic problem;
- How in an environment of market economy, the consumer maximizes its utility, and how the firm makes decisions on its production and prices in order to maximize the profit while operating within different market structures;
- How markets for production factors work, and what are the specific features of supply of and demand for the different factors of production: labor, capital, land and entrepreneurship;
- What is the role of government regulation of business in correcting the failures of the market.
- What is the basic macroeconomic model: aggregate demand, aggregate supply and equilibrium real gross domestic product.
- How are the key macroeconomic aggregates defined and measured, including: gross domestic product, inflation, unemployment, saving, investment, exchange rates and etc,
- What are the interrelationships among the macroeconomic aggregates.
- What is long term economic growth, how it is measured and what are the determinants/factors for economic growth.
- What is business cycle and how macroeconomic aggregates move during the cycle.
- What are the policy goals and instruments used by the monetary policy, particularly as a macrostabilization policy.
- What are the policy goals and instruments used by the fiscal policy, particularly as a macrostabilization policy.
- What are the main aspects of international economics: international trade and investment flows; economic effects of tariffs and quotas; balance of payments; foreign exchange rate and its determinants.
- What are the dominant schools of thought within the contemporary macroeconomics.
Economics as a Science: Definition, Methodology, Basic Principles of Economic Thinking
Principles of Microeconomics:
- Demand, Supply and Market Equilibrium. Theory of Consumer Choice. Theory of Production. Costs of Production. Perfect Competition. Imperfect Competition: Monopoly; Oligopoly. Markets for Production Factors. Labor Market. Government and Business: Market Failures and Government Regulation.
Principles of Macroeconomics:
- Basic Macroeconomic Model: Aggregate Demand, Aggregate Supply and Macroeconomic Equilibrium. Measuring Macroeconomic Activity. Consumption, Saving and Investment. Economic Growth. Business Cycles. Money and Banking. Unemployment and Inflation. Fiscal Policy. Monetary Policy. International Economics – Basic Aspects: Competitive Advantages, Free Trade vs Protectionism, Balance of Payments, Foreign Exchange Rate. Schools of Thought in Modern Macroeconomics.