The course is an exposition of macroeconomic models and their application to less developed countries. It discusses the determination of macroeconomic equilibrium in the context of a small open economy. It reviews the problems of output and employment determination, monetary control and the general price level. It discusses problems of maintaining equilibrium in the external sector: balance of payments, exchange rates, external transmission of inflation, debt and stabilization problems.
EXPECTED LEARNING OUTCOMES
By the end of the course unit students should be able to:
· Explain the circular flow of income
· Discuss the determine, the factors affecting economic growth, aggregate demand and aggregate supply
· Describe the causes of fluctuation
· Explain the fiscal policy, and its role in stabilization