Course Details

Course Information Package

Course Unit CodeABSE204
Course Unit Details
Number of ECTS credits allocated5
Learning Outcomes of the course unitBy the end of the course, the students should be able to:
  1. Understand the nature of money and its functions
  2. Distinguish money aggregates and understand factors, determining money supply. Analyze factors, affecting money demand and the equilibrium in the money market
  3. Indicate the tools used by the Central Bank to influence the money supply and interest rates
  4. Construct the aggregate supply curve and compare and contrast short run and long run macroeconomic equilibrium
  5. Distinguish sources and factors of economic growth and analyze indicators of economic growth.
Mode of DeliveryFace-to-face
Recommended optional program componentsNONE
Course Contents

Money and the functions of money:

The nature of money; the evolution of money; the forms of money; the functions of money. Liquidity and money aggregates; a basic understanding of money supply

The demand for money:

Definition. Motives for money demand: transactionary motive, precautionary motive, speculative motive (liquidity preference). The real vs. the nominal interest rate. The money demand curve. Factors, affecting money demand.

Banking and the supply of money:

Modern frictional-reserve banking. The process of deposit creation and the deposit multiplier. The balance sheet of the commercial bank.

Central Banking and monetary policy:

The role of the central bank. The balance sheet of the central bank. Monetary policy: goals and instruments. Open market operations; discount rate policy; the minimum reserves requirement. Effectiveness of the instruments. Monetary policy in the AD-AS framework. Monetary effects in the long run. From aggregate demand to aggregate supply.

The foundations of aggregate supply:

Short run vs. long run in macroeconomics. Deriving the short run aggregate supply curve. The segments of the SRAS curve. Determinants of aggregate supply in the short run. The long run aggregate supply curve – slope and determinants.

Inflation and unemployment:

Unemployment: nature, forms and measurement. Inflation – sources, forms and measurement. The trade-off of inflation and unemployment – the Phillips’ curve. The short run Phillips’ curve and the SRAS curve. The long run Phillips’ curve and the LRAS curve. The natural rate of unemployment and the potential GDP again.

Economic growth:

Definition. Conditions, factors and measurement of economic growth. Theories of growth. Models of growth and approaches to economic development. Alternative models of growth in developing countries.

Recommended and/or required reading:
  • Violaris Ioannis, Economics a bilingual approach, Epiphaniou editions, 2008
  • Samuelson & Nordhaus, Economics, McGraw Hill, 19th edition, 2008, or more recent one
Planned learning activities and teaching methods

Ex cathedra lectures and discussions in class, by means of traditional tools or using computer demonstrations. Some of the key issues are revealed on the basis of simulation games.

Auditory exercises, where examples regarding matter represented at the lectures, are solved and further, questions related to particular open-ended topic issues are compiled by the students and answered, during the lecture or assigned as homework.

Topic notes are compiled by students, during the lecture which serve to cover the main issues under consideration and can also be downloaded from the lecturer’s webpage. Tutorial problems are also submitted as homework and these are solved during lectures or privately during lecturer’s office hours. Further literature search is encouraged by assigning students to identify a specific problem related to some issue, gather relevant scientific information about how others have addressed the problem and report this information in written or orally.

Assessment methods and criteria
2 Quizzes16%
Home-work assignments and participa10%
Final Exam60%
Language of instructionEnglish
Work placement(s)NO

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