Number: 45753
Title: Macroeconomics
Concentration: Required
Prerequisites: 45750 - Managerial Economics
Description: Strategic business decisions are continually influenced by international trade and regulation and by business cycles. The 1990 US recession altered the paths of important variables such as interest rates prices exchange rates and expected sales--variables that clearly influence production marketing and investment decisions made by managers. At the international level the potential free trade agreement with Canada and Mexico could have profound effects on the variables listed above as well as affecting the location decisions of plants wage rates paid to employees and the distribution of income and consumption. Macroeconomics outcomes can often determine the success or failure of business decisions so decisions must be based on assumptions about business cycles and growth. A new product launched in a recession may appear unprofitable merely because of poor timing. This class uses basic economic principles applied to aggregate economic activity to develop analytical models that are presented in a lecture format and are then followed by applications and case studies. The emphasis is on the applications. Issues addressed include the role of the Federal Reserve an its impact on interest rates the causes and consequences of the devaluation of the dollar the effects of capital gains tax on savings and interest rates the effects of changing in the distribution of income on consumer purchasing decisions the sources of changes in productivity and economic growth the prospects for future inflation and the quality of economic forecasts.