Macroeconomics in business 2600-DSMz1MAB

1. Problems of macroeconomics and macroeconomic indicators
Modern taxonomy of economics – microeconomics, macroeconomics, mezzoeconomics and megaeconomics. The field of macroeconomic research. Resources and flows in the national economy. Macroeconomic measurement – systems of national accounts (MPS and SNA). Macroeconomic measures – GDP, GNP, and NNP, national income, personal and disposable income of population. GNP measurement. Methods allowing for price changes – nominal and real GNP. Drawbacks of GNP as a measure of the overall level of output and social welfare (indicator of net economic welfare). National income redistribution and circulation of incomes and outlays. Creation and distribution of national product in Poland.

2. Global demand, national budget, and foreign trade
Assumptions of a closed three-agent economy model. The effect of national expenditure on the level of national income. Changes in the net tax rate and in national expenditure, and the level of income balance. The multiplier effect of expenditure, taxes, and balanced budget – the public expenditure multiplier, the tax multiplier and the balanced budget multiplier. The national budget – the notion and functions. Budget policy rules. Budget deficit and surplus. Types of budget deficit. Effects of budget deficit. Financing deficit and the public debt problem. Export, import, and balanced national income. The export multiplier. Automatic stabilizers of the business cycle. Dependency between the income tax rate and national budget’s revenues – the Laffer curve.

3. Money, the banking system and monetary policy
Money – its emergence, evolution, and functions. Money and interest rate theories (types of circulated money, measures of money, monetization of economy, the quantity of money and the money multiplier mechanism, real money and nominal money, real and nominal interest rates, money demand, theories of money demand – I. Fisher’s quantitative theory of money, J.M. Keynes’ liquidity preference theory, M. Friedman’s neoquantitative theory of money. The central bank and monetary policy instruments (central bank’s assets and liabilities, monetary policy instruments – the obligatory reserve policy, refinancing loans, open market policy, direct control instruments). Monetary policy goals (clashes and hierarchy of monetary policy goals, monetary policy’s intermediate and operational goals).

4. State monetary policy and fiscal policy in an autarchic economy
Interest rate, investment demand, and consumer demand in an economy. The IS curve (algebraic analysis and reference to geometry). The LM curve (algebraic analysis and reference to geometry). Equilibrium in the market for goods and services and in the money market. Fiscal policy – shifts in the IS curve. Monetary policy – shifts in the LM curve. The transmission mechanism. The damping effect. State expenditure and the crowding-out effect. The IS-LM model in a three-agent economy (four quarters) and practical problems in economic policy. Management of aggregated demand and the character of stabilization policy.

5. Labour market and unemployment
Equilibrium and disequilibrium in the labour market. Concepts, measurement, consequences (economic and social), and types of unemployment. Key theories of unemployment (neoclassical and Keynesian approaches, labour market search theory).

6. Inflation
Concept and measurement of inflation. Types of inflation. Consequences of inflation. Short-run Phillips curve. Friedman-Phelps curve.