ECN502 - Introduction to Principles of Economics - Macro

Outline info
Last revision date 2018-06-01 14:25:33.025
Last review date 2018-07-16 00:15:01.248

Subject Title
Introduction to Principles of Economics - Macro

Subject Description
This subject introduces the process and principles of macroeconomic thought as they have been developed to explain the determination of the levels of national income and output, employment, the price level and other macroeconomic aggregates. The implications of these principles of public policy in Canada will be examined in the contexts of money and banking, stabilization efforts, international trade, the structure of the Canadian economy, and responses to the emerging patterns of global competition.

Credit Status
Accounting and Finance Program - Economics 502 (together with Economics 501) is a required subject for the Accounting and Finance Program as currently recognized by the Certified General Accountant's Association of Canada. Students must earn at least a B grade in both subjects for the CGA credit. For those students transferring from the Accounting and Finance Program to another program, they may only use one of either ECN501 or ECN502 as a credit towards their general education requirements.

Learning Outcomes
Upon successful completion of this subject the student will be able to:

  1. Define, calculate, and critically assess the key economic indicators of income, expenditure, and national accounts.
  2. Define, measure, and assess economic growth and fluctuations, unemployment and inflation, in the context of the Canadian economy.
  3. Demonstrate the relationships between consumption and income, saving and income, interest rate and investment.
  4. Examine the determinants of consumption, saving, investment, and the multiplier effect.
  5. Use the aggregate expenditure model to determine equilibrium levels of employment, output and income in various types of economies.
  6. Trace the operation of the spending multiplier in closed and open economies.
  7. Derive aggregate demand from the aggregate expenditures model when price level is changing or constant, with reasons for movements along and shifts of the aggregate demand curve.
  8. Delineate the differences and links between short-run and long-run aggregate supply.
  9. Chart macroeconomic equilibrium and gaps using the long-run AD/AS model.
  10. Assess policies for dealing with recession and cyclical unemployment, demand-pull and cost-push inflation, and the promotion of growth, full employment and stable prices.
  11. Analyze the purposes, tools, and limitations of fiscal policy and its possible applications for amending the AD/AS model, and thereby closing inflationary and recessionary gaps.
  12. Explain money and its functions, money supply, and the structure and evolution of the Canadian financial system, money creation with respect to the monetary base, desired reserves, and the money multiplier.
  13. Interpret  the role of the Bank of Canada and the operation of the tools of monetary policy.
  14. Discuss the demand for money, the structure of interest rates, the monetary transmission mechanism, and evaluate restrictive and expansionary monetary policy using the AD/AS model.
  15. Summarize the importance of international trade to Canada in terms of overall volume.
  16. Evaluate the short-run trade off between inflation and unemployment (Phillips curve).

Essential Employability Skills
Communicate clearly, concisely and correctly in the written, spoken and visual form that fulfils the purpose and meets the needs of the audience.

Respond to written, spoken, or visual messages in a manner that ensures effective communication.

Apply a systematic approach to solve problems.

Use a variety of thinking skills to anticipate and solve problems.

Locate, select, organize, and document information using appropriate technology and information systems.

Analyze, evaluate, and apply relevant information from a variety of sources.

Show respect for diverse opinions, values, belief systems, and contributions of others.

Manage the use of time and other resources to complete projects.

Take responsibility for one's own actions, decisions, and consequences.

Cheating and Plagiarism
Each student should be aware of the College's policy regarding Cheating and Plagiarism. Seneca's Academic Policy will be strictly enforced.

To support academic honesty at Seneca College, all work submitted by students may be reviewed for authenticity and originality, utilizing software tools and third party services. Please visit the Academic Honesty site on for further information regarding cheating and plagiarism policies and procedures.

All students and employees have the right to study and work in an environment that is free from discrimination and/or harassment. Language or activities that defeat this objective violate the College Policy on Discrimination/Harassment and shall not be tolerated. Information and assistance are available from the Student Conduct Office at

Accommodation for Students with Disabilities
The College will provide reasonable accommodation to students with disabilities in order to promote academic success. If you require accommodation, contact the Counselling and Disabilities Services Office at ext. 22900 to initiate the process for documenting, assessing and implementing your individual accommodation needs.

ECN 501 or equivalent.

Co-requisite EAC 149 or equivalent

Topic Outline

  • Measuring the economy's performance
  • Economic growth, unemployment, and inflation
  • The basic macroeconomic relationships
  • The Aggregate Expenditures Model
  • The Aggregted Demand (AD) and Aggregate Supply (AS) Model
  • Fiscal policy and the AD/AS Model, deficits, surpluses and the public debt
  • Money and banking
  • Chartered banks and the creation of money
  • The Bank of Canada, interest rates, and monetary policy and the AD/AS Model
  • Trade policy
  • The unemployment/inflation relationship (Phillips Curve)
  • Trade policy, exchange rates, and the balance of payments

Mode of Instruction
There are two modes of delivery for this course:

1. In-class: Students attend classes on campus each week. All instruction is delivered in a face to face environment.

2. Online: All class work is completed in a fully online environment. Students do not attend any classes on campus; however, the final exam must be written in-person at the Test Centre.

Teaching and Learning Methods:
To ensure that students are engaged as much as possible in the learning process, instructors can use such teaching methods as class and small group discussions, essays and research, individual and group presentations, readings, lectures, workshops, in-class exercises, and/or web-based instruction. The mode of delivery will dictate the most appropriate teaching methods available to an instructor

Prescribed Texts
Traditional Classroom:
CR McConnell, Brue & Barbiero. Macroeconomics w/Connect, 14th Canadian Edition, McGraw Hill Ryerson, Toronto, ISBN# 9781259267222.

Sexton/Fortura /Kovacs. Exploring Macroeconomics w/MindTap. 4th Canadian Edition, Nelson,  Hard copy:  ISBN# 9780176706708.  E-text:  ISBN# 9780176701420.
MindTap code is required.

Reference Material
Students are referred to the following website for the Seneca College Library APA Style Guide and Guide to Integrating Quotations (APA Style):


Required Supplies

Promotion Policy

Grading Policy
A+ 90%  to  100%
A 80%  to  89%
B+ 75%  to  79%
B 70%  to  74%
C+ 65%  to  69%
C 60%  to  64%
D+ 55%  to  59%
D 50%  to  54%
F 0%    to  49% (Not a Pass)
EXC Excellent
SAT Satisfactory
UNSAT Unsatisfactory

For further information, see a copy of the Academic Policy, available online ( or at Seneca's Registrar's Offices.

Modes of Evaluation

To be successful in this course, you must complete all course work as specified and achieve an overall grade of 50% or higher. For further information on evaluation and academic standing, see a copy of the Academic Policy available at Seneca registration offices.

Term work:
All term work assignments must be completed prior to the time of the final exam or last class.  Students must contact faculty in advance of the assignment due date to discuss the possibility of an extension.  Late assignments may be subject to the awarding of a penalty resulting in a lower grade assigned. 
Make-up opportunities for assignments must also be made in advance of the scheduled due date.  If an assignment is missed due to class absence, official documentation must be submitted to the faculty member on or before the next scheduled class. Make-up opportunities may not apply to all graded assignments.

Traditional Classroom:

Term Assignment 20%
Term Tests (min. 2) 45%
Final Examination 25%
Presentation 10%


Assignments 30%
Team Assignment & Peer Evaluation 20%
Discussions 10%
Final Examination (Online - non invigilated) 40%

Student Success:
Please come prepared to participate in class. Make sure you bring your course text to each class, participate in class discussions, hand in any assigned work on time and attend each and every class. Following these suggestions will increase your chances of success.
Please access the course every week (or more) and keep up with assigned readings. Make sure you participate in online discussions and hand in any assigned work on time. Following these suggestions will increase your chances of success.

Students should keep all assignments (including drafts and outlines) and exercises until they receive their final grade. Students may appeal any final grade in a subject or any decision by the College, following the recommendation of a Promotion Committee, with respect to the student's academic standing, continuation or status in a program, School, Faculty or the College.  It is the policy of the College that a student who invokes this appeal process will be given a fair  hearing.  For further information on appeals, please see Section 12 of the Academic Policy Handbook.


Approved by: Fiona Bain-greenwood