As someone who has devoted her professional life to the study and teaching of economics, it is my conviction that a basic knowldedge of economics and its decision-making methodology is essential for a variety of purposes. The economy affects everything in our lives: our salary, the range of products availabe to buy, the prices of those products, and how we plan for the future. Understanding the economy makes us better informed consumers, workers, and voters.

This course introduces you to the basic foundations and tools of the discipline of economics, and in particular to the central topics affecting the economy as a whole. These topics include the measurement and movement of the nation's output, unemployment rate, and inflation rate, along with the role of the government in preventing recessions and promoting economic growth. Issues affecting the global economy, like trade and exchanges rates, are examined as well.

I have divided the course content into five parts. Each part contains several chapters. The first part of this course will introduce you to the discipline of economics, the tools used by economists, and the role of private and public sectors in the economy. What is economics? How do we as a society determine what is produced, how it is produced, and who gets it? We build a model of private markets where the decisions of buyers and sellers determine how much of a good or service is produced, and how much it costs. We examine the role of government in the economy. Presidential candidates George W. Bush and Al Gore both have outlined economic policies: are they any good? Does the President of the United States have the power to affect the economy?

The second part of this course will cover the measurement and movement of key economic variables, like GDP, unemployment and inflation. We will document the economic expansion of the 1990s and examine the costs of GDP being too low or unemployment and inflation being too high. With the coming election in November 2000 the recent performance of the economy will have a huge say in who occupies the White House for the next four years.

The third [part of this course builds a model of the economy that shows how the level of GDP, unemployment, and prices are determined, and what causes them to change. Our model includes the behavior of consumers, firms, government, and the role of money. Federal Reserve Chairman Alan Greenspan has a huge impact on the economy, from the interest rates on a mortgage to the ease of finding a job after graduation. In this section we examine how consumers, firms, President Clinton, Congress, and Mr. Greenspan all have an impact on overall economic conditions in the United States.

The fourth part of this course takes our model of the economy and looks and short-run and long-run economic goals and policy alternatives. Here we debate the wisdom of different policies and look at alternative opinions from different schools of macroeconomic thought. We also examine why the theory of how a policy should work may differ substantially from how a policy actually works.

The fifth part of this course expands our view from the U.S. economy to the global economy. We look at the benefits of international trade and debate the merits of protecting domestic jobs versus opening up markets to the free flow of goods and services across borders. We also study the flow of money across countries. Why does the value of the dollar fluctuate relative to other currencies such as the yen and the euro?

Throughout this course we will take some time to reflect on what we have learned, why it is important, and how will we use this foundational knowledge of economics.