University of Queensland - ECON2020: Intermediate Macroeconomics (Solutions)

This course further enhances critical thinking of students around macroeconomic theory topics such as determinants of national expenditure, income and employment in closed and open economies. It addresses the role of monetary and fiscal policy, and factors influencing interest rates, inflation and unemployment.

ECON2020 is a core course in the B.Econ and a prerequisite course for ECON2040 (Macroeconomic Policy) and ECON3020 (Advanced Macroeconomics). The course covers topics in macroeconomic theory atﾠthe intermediate level. Insights into the workings of the macroeconomy and the ability of economic policy to affect macroeconomic outcomes is achieved through the study of theoretical models. Focus is placed on four particular models - the Neo-classical Growth Model (and New Growth Theory extensions), the Aggregate Expenditure Model, the IS-LM Model and the Aggregate Demand / Aggregate Supply Model. The basic version of some of theseﾠmodels will be familiar to students from having studiedﾠIntroductory Macroeconomics. The policy focus is primarily on fiscal and monetary policy, and government debt, in both closed open economies in the short run and the long run, in the face of external shocks such as the global financial crisis and unexpected political changes.

✔ After successfully completing this course you should be able to:

• Command and utilise core theoretical macroeconomic models to explain real world observations, problems and puzzles. This command will show sensitivity for how macroeconomic conditions vary across countries and / or over time.
• Identify key contemporary macroeconomic problems, both domestic and international, and discuss possible solutions and potential innovations towards improving current policies and practices.
• Explain the connections between short run, long run, and very long forces on the economy, and the appropriate policy responses to each of them.
• Develop your confidence and abilities to use mathematics and logic to make reasoned arguments about economic issues.