ECON 305

Solve and interpret standard models of consumer behavior

• Define and calculate marginal utility and the marginal rate of substitution (I)
• Explain the role of expectations in consumer and firm choices (I)

Solve and interpret standard models of producer behavior

• Define and calculate marginal product and marginal rate of transformation (I)

Solve and interpret standard models of market interaction

• Calculate and interpret present values and net present values (I)
• Describe the interactions between various monetary assets (eg $ bills vs bank deposits, $ bills vs bitcoin) (I)
• Describe the Taylor principle of interest-rate setting, and why it is important (I)
• Describe the theory of Ricardian equivalence and its limitations in practice (I)
• Use a dynamic macroeconomic model to predict the response of macroeconomic variables to econ (I)
• Aggregate individual demands to market demand (I)
• Calculate and interpret the growth rate of total factor productivity (Solow residual) (D)
• Describe the characteristics of monetary assets (i.e., what makes money money) (D)
• Describe the quantity theory of money, its implications, and whether it fits the evidence (D)
• Describe the theory of purchasing power parity, its implications, and whether it fits the evidence (D)
• Explain the implications of diminishing vs. constant returns to capital for long-run growth (D)
• Use a one-period macroeconomic model to predict the response of macroeconomic variables to economic conditions and policy actions (D)
• Use supply and demand (liquidity preference?) to describe the relationship between the money supply and interest rates (D)
• Write and interpret the neoclassical aggregate production function (D)
• Calculate and interpret the effect of government fiscal policy on deficits, debt, national savings, and investment (D)
• Calculate growth rates from levels, and levels from growth rates (D)
• Describe the leading explanations for observed cross-country and time-series patterns in long-run growth (D)
• Distinguish between the short run and the long run (D)
• Identify the potential costs of inflation, deflation, and disinflation (D)
• Use supply and demand (labour market) to identify the determinants of employment and/or unemployment (D)
• Use supply and demand (loanable funds) to identify the determinants of interest rates, savings, and investment (D)

Interpret key economic data

• Identify the empirical impications of a macroeconomics model and compare them to data (I)
• Calculate and interpret the growth rate of total factor productivity (Solow residual) (I)
• Calculate and interpret the unemployment rate and labour force participation rate (D)
• Calculate real and nominal GDP and their expenditure components in a simple economy (D)
• Calculate the CPI, GDP deflator, and inflation rate in a simple economy (D)
• Describe concepts, methodology and limitations in the main macroeconomic statistics (D)

Interpret statistical evidence and methodology

• Describe standard methods for distinguishing trend from cycle in macroeconomic time series (I)

Discuss the role of theory, evidence, and measurement in economic analysis

• Describe the scientific method and its role in economics (D)

Critically evaluate assumptions in economic/econometric models

• Distinguish long-run and short-run demand/supply curves, understand how they change systematically (I)
• Explain the role of assumptions in economic models (D)
• Understand limited role of GDP as a measure of production (versus wealth, versus welfare) (D)

Compare and critically evaluate economic arguments

• Identify and critique the leading explanations for the business cycle (I)
• Distinguish between different explanations for unemployment (D)

Apply economics to everyday situations

• Predict the economy's response to changes in market conditions (D)

Use economics to evaluate specific policies

• Discuss the arguments for and against active stabilization policy (D)
• Discuss the arguments for fixed versus flexible exchange rates (D)
• Discuss the arguments for monetary versus fiscal policy (D)
• Explain the zero lower bound problem and the use of unconventional monetary instruments (D)
• Identify exchange rate policy choices and evaluate their consequences (D)
• Identify fiscal policy choices and evaluate their consequences (D)
• Identify monetary policy choices and evaluate their consequences (D)
• Evaluate policies and factors that influence long-run growth (D)

Evaluate current events using tools of economics

• Evaluate current events as they relate to the general course content (D)

Describe important institutions in the economy and their roles

• Describe the rationale for central bank independence, and the relationships between fiscal and monetary policy (I)
• Define money and describe its primary roles in the economy (I)
• Describe the Bank of Canada and its role in the economy (I)
• Describe and explain key aspects of fiat, commodity-based and digital currencies (I)
• Describe the characteristics of a bank run and the potential role of the lender of last resort (D)

Describe important events in economic history and their current relevance

• Describe key aspects of the industrial and demographic revolutions, and their link to modern development policy (I)
• Describe and explain key aspects of the gold standard, Great Depression, 1970's inflation episode, and 2008 financial crisis (D)
• Describe important cross-country patterns in long-run growth (D)
• Describe important patterns and events in Canada's main macroeconomic time series (D)