Econ 101 – Principles of Macroeconomics

View Syllabus (download)
Latest Course Offering: Fall 2010, Session 1
Course Time: Tuesday and Thursdays, 8:10-10:15
“Office” Hours: Mondays, 6:30p – 8:30p at the Downtown Starbucks.
Location: RASM 212
Contact: tom schenk jr at gmail dot com

Instructional Resources

  1. Textbook: Economics by David Colander, 7th Edition, McGraw-Hill, Irwin: 2006 ISBN: 0-07-340286-9
  2. Periodicals: The EconomistThe Wall Street JournalThe Des Moines RegisterNew York Times
  3. Blogs: Greg MankiwMarginal RevolutionBrad DeLongMacroblog,Economist’s ViewGrowth Commission
  4. Data Sources: EconoMagic (almost everything), St. Louis FRED (monetary data), BLS (unemployment, inflation), BEA (GDP, income), GapMinder (international economic & demographic data), WolframAlpha (like Google, but for data).
  5. Course website:

Grading -

All assignments will be scored on a 100 percent scale. The final grade, Y, will be derived using the following formula:

Y = 0.2 * E1 + 0.2 * E2 + 0.3 * F + 0.2 * A + 0.07 * P + 0.03 * C

Y=0.35 * F + 0.5 * A + 0.12 * P + 0.03 * C


E1 = Exam #1
E2 = Exam #2
F = Final
A = Average of assignments
P = Participation
C = Company score

Exams: Two exams will be administered throughout the semester. Both exams will be take-home tests. The exams will consist of a multiple choice, argument, and long problems. Multiple choice questions will test basic economic vocabulary and elementary relationships. Argument questions will ask the student to reply to a normative statement using economic reasoning taught in class. I may use quotes from recent periodicals and/or blog posts. Finally, long problems will be multi-part and will test whether the student can work through an economic model. Each exam will implicitly be cumulative insofar as the principles of economics are tightly intertwined, but the emphasis will be on the contemporary lesson.

Final: The final will explicitly be cumulative, although the emphasis will be slightly more on the latter third of the class. The format will be similar to exams: multiple choice, essay, and long problems. The test is worth slightly more and, thus, will be slightly longer than exams. The final will also be a take-home exam.

Assignments: Assignments will be given throughout the semester through the course website. Homework will be distributed on Tuesday and will be due at the beginning of the following Tuesday. Assignments shall be completed in Excel and turned-in electronically. Assignments will be graded using the following metric: 0 = did not turn in; 1-2 = tried without serious effort; 3-4 = tried with effort; 5=(nearly) perfect. For grade purposes, a 0 is considered 0%, 1-2 is between 40%-60%, 3-4 is between 60%-90%, a 5 is between 90% – 100%. Assignments are graded on a traditional scale between 0 and 100 percent. Assignments are not meant to be taxing, but to help the student prepare for exams and the final. Most assignments will involve a question that will resemble an exam’s ‘long problem.’

Participation: Students are expected to regularly participate in classes and, if not in class, in out-of-class communication with the professor. Lack of participation and irregular attendance will be especially noticed if the student is struggling in class. The professor will warmly reward struggling students who seek help through email and questions.

Company Score: Students will be randomly assigned to companies of 3 to 4 individuals, depending on the final class size. Companies will accumulate points throughout the semester based on exams, assignments, participation, and any other metric the professor feels is appropriate. These activities are meant to be fun and introspective, while being educational. At the end of the semester, points will be assigned as the inverse of company rank multiplied by 100, e.g., first place: (1/1)*100 = 100, second: (½)*100 = 50, etc. The company score is especially helpful toward boarderline students.

Final Course Score

A = 90-100%
B = 80-89%
C = 70-79%
D = 60-69%
F = < 60%

Reading List

31 Aug:   Review of the syllabus and introduction

What is Economics?

***Chp. 1 – Colander
**OKCupid, Political Evolution
**An Essay on the Nature & Significance of Economic Science. Lionel Robbins, 1945:
**“Politics versus Economics” in Applied Economics: Thinking Beyond Stage One. Thomas Sowell, 2004: pp. 1-29.
*(Negative Liberty) “Economic Liberalism—introduction” in Western Liberalism: A History in Documents from Locke to Croce. Eds. E.K. Bramsted and K.J. Melhuish, 1978: pp. 250-258.
*(Socialism) “The Elements of Socialism” in The Strength and Weakness and Socialism. Richard T. Ely, 1899: pp. 9-18.
*(Corporatism) “Economic Fascism” by Thomas J. Dilorenzo in The Freeman: Ideas on Liberty. Foundation for Economic Education, Vol. 44(6): 1994

Production possibilities frontier

***Chp. 2 – Colander

**Chp. 2, Appendix A – Colander

Algebra Review

Find your favorite algebra book and/or begin Chp. 5, Appendix A – Colander, pp. 121-123

2 Sep: Economic institutions

***Chp. 3 – Colander

Gross Domestic Product

***Chp. 23 25 – Colander

**Brad DeLong, Ungiven NIPA Lecture, August 30, 2010

7 Sep: The Macroeconomy: Inflation, Unemployment, and Business Cycles

***Chp. 24 – Colander
**Increased Working Hours versus Increased Hiring, Amy Ellingson, Macroblog, June 25, 2010.

**National Bureau of Economic Research, Determination of the December 2007 Peak in Economic Activity. 2008.
*Amanda Cox, The New York Times, Turning a Corner? July 2, 2009.
*The Role of Education in the Economy: Unemployment Rate by Educational Attainment

9 Sep: Sources of Growth, Malthusian Economics, and Growth Theories

***Chp. 26 – Colander

14 Sep: Model Building I: Aggregate Demand & Aggregate Supply

***Chp. 27 – Colander

**What shocks have there been to aggregate demand? Tyson’s Keynesian Confusion, Mark A. Calabria, CATO @ Liberty, August 30, 2010.

16 Sep: Model Building II: Multipliers Model Building I: Aggregate Demand 7 Supply

***Chp. 28 – Colander

21 Sep: Sources of Growth: Malthusian Economics, and Growth Theories

***Chp. 26 – Colander

**What shocks have there been to aggregate demand? Tyson’s Keynesian Confusion, Mark A. Calabria, CATO @ Liberty, August 30, 2010.

28 Sep: Model Building II: Multipliers

***Chp. 28 – Colander

30 Sep: Income & Taxes; Fiscal Policy & Deficits

***Chp. 30 – Colander

***Chp. 31 – Colander

**Does Stimulus Spending Work? “Stimulus Spending Doesn’t Work”, Robert J. Barro, Wall Street Journal, October 1, 2009
*Propping up industries as fiscal policy “The Confidence Game”, Ken Rogoff, Project Syndicate, 2009

5 Oct: Money & Interest Rates

***Chp. 27 – Colander

7 Oct: Class will not meet, lecture notes online

Bonds and Investing

***Chp. 27, Appendix A – Colander

12 Oct: Yield Curve, Inflation & Phillips Curve

***Chp. 29 – Colander

14 Oct: Monetary Policy & How Economists Were Once Wrong

***Chp. 28 – Colander

*Paul Krugman, “How Did Economists Get It So Wrong?New York Times, September 2, 2009.
*Robert Shiller (interview), “The Subprime Solution

Where did the financial collapse come from?

***Subprime Mortgages: A Primer, Mara Lee,, March 23, 2007
***”Forget About Housing, The The Real Cause Of The Crisis Was OTC Derivatives“, by Ron Hera, May 11, 2010, 2:50 PM

Where didn’t the financial collapse come from?

***”Don’t Blame the CRA (The Sequel)“, Real Time Economics, Wall Street Journal, December 4, 2008

***”What’s the Fed Up To?“, David Altig, June 16, 2005.

***”What’s the Fed Up To? Part 2” David Altig, June 16, 2005.

**”Can Interest Rates Explain the US Housing Boom and Bust?“, Edward Glaeser, Joshua Gottlieb, & Joseph Gyourko, VoxEU, August 29, 2010 (Somewhat technical, but read to get the main jist).

Exchange rates

**Chp. 32 – Colander

Take Home Final

Missed Exams and Assignments

Assignments will be due at the beginning of class every Tuesday and tests will be given on the days denoted below. Late assignments will be penalized 40 percent. Students must notify the professor of an upcoming absence. Students will be allowed to make up exams ONLY when the professor received prior notification for the inability to complete the exams. In extreme cases where prior notification is impossible, the student must provide written documentation—not by the student—explaining the absence. Students who miss a test for an unexcused absence will receive a zero.


Students will be expected to attend every class. Irregular attendance will be reflected in participation and company exercise scores. Those who already anticipate missing two or more classes are encouraged to enroll at another time.

Writing and Critical Thinking

Modern economics is intensely mathematical, but few people possess the training to grasp a mathematical model. As such, economics is typically communicated in written periodicals so it is no coincidence that well-known economists tend to be good writers—e.g., Paul Krugman, Henry James, John Gailbraith, and Milton Friedman. Employers often lament and seek those with sharp writing ability. Writing is particularly valued when one can capture complex ideas and explain them to those unfamiliar with the topics.  Although writing ability is hard to notice during an application procedure, employers will often quickly promote those who effectively communicate.

This class will challenge student to reply to assertions during an examination. Students will need to synthesize economic theory and writing to convince the professor the original argument was either fallacious or correct. This experience will be different from writing an essay or research paper. Argument portions of the exam will give the student little room to wonder or “add fluff”.


  1. Political economy and opportunity costs – Due Sept. 8 at the end of the day
  2. Inflation, Unemployment, & Real GDP – Due Sept. 23 by 8p

4 thoughts on “Econ 101 – Principles of Macroeconomics

  1. Mr. Schenk,

    When will you be posting the new homework for this week?

    1. Shelly-

      Looking at the schedule for the rest of the year, I’ll be posting homework tomorrow (Tuesday, Oct 4th), which won’t be due until the following week. It was suppose to be posted this past Saturday, but I will have some schedule conflicts this week which will prohibit me from being available for questions.

  2. Have you returned the most recent homework assignment? I would like to review your comments before starting the final. Thank you.

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