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Theory of Economics

Course developers

Course abstract

The course provides students with an opportunity to learn theoretical principles and economic relationships at both micro- and macro-level, build up an understanding of how to practically apply them as well as comprehend macroeconomic regularities and trends in the economy of Latvia.

Learning outcomes and their assessment

Students will be able to demonstrate:
KNOWLEDGE of
key market economic relationships and basic theoretical principles at both micro- and macro-level. Tests 1 and 2.
SKILLS to
perform a practical analysis of basic microeconomic and macroeconomic problems by using the theoretical knowledge acquired; simulate changes in the market equilibrium, analyse the motivation of consumer and producer market behaviours, predict the functioning of the market mechanism, depending on the degree of competition in the market. Tests 1 and 2.
COMPETENCES to
independently acquire, select and systematize necessary information, independently analyse and solve problems, make reasoned decisions, hear and discuss practical solutions and make proposals according to the economic situation by using the theoretical knowledge acquired. Independent work.

Course Content(Calendar)

1. Concept of economics. (1 h lecture)
2. Market demand and supply. (1 h lecure, 1 h practical)
3. Demand and supply flexibility. (1 h lecure, 1 h practical)
4. Consumer behaviour in the market. (1 h lecure, 1 h practical)
5. Production, costs. (1 h lecure, 1 h practical)
6. Forms of market competition, their features. (1 h lecure, 1 h practical)
7. Market for the factors of production (resources). (1 h lecure, 1 h practical)
Test 1: Analysis of market demand, supply and production costs. (2 h practicals)
8. Key macroeconomic indicators. Price indices. (1 h lecure, 1 h practical)
9. Aggregate demand and supply. (1 h lecure, 1 h practical)
10. Cyclical nature of economic growth. (1 h lecure, 1 h practical)
11. Employment and unemployment. (1 h lecure, 1 h practical)
12. Inflation. (1 h lecure, 1 h practical)
13. Money and the banking system. (1 h lecure, 1 h practical)
14. Fiscal and monetary policy. (1 h lecure, 1 h practical)
15. Governmnet budget and tax policy. (1 h lecure, 1 h practical)
16. International economic relations. (1 h lecure, 1 h practical)

Test 2: Calculation and analysis of key macroeconomic indicators. (1 h practical)

Requirements for awarding credit points

The student must take two tests during the semester, submit homework on consumer motivation in the market and defend a presentation (PowerPoint) on a current macroeconomic problem. The course ends with a final examination.

Description of the organization and tasks of students’ independent work

Homework 1. Consumer motivation in the market – three examples of how businesses try to make consumers buy more than they need to. The homework is answered orally during practicals, within the time specified.

Homework 2. Statistical data on a current macroeconomic problem have to be acquired, summarised, represented and analysed. The homework must be presented as a PowerPoint presentation and defended.

Criteria for Evaluating Learning Outcomes

Students who have scored at least 70% have an opportunity to automatically earn a cumulative mark. The cumulative assessment consists of the tests taken and homework completed during the semester. The cumulative assessment cannot include the tests retaken.
All students who have not earned a cumulative mark must take a written examination. All the tests and homework must have a passing mark.

Compulsory reading

1. Bikse V. Makroekonomika: teorija un politika, LiepU, 2015.269 lpp.;
2. Nešpors V. Mikroekonomikas teorijas pamati. Rīga: RTU, 2015, 244 lpp.;
3. Williamson D. Stephen. Macroeconomics, 6th edition, published by Pearson Education 2018. 731p.
4. Wang S. Microeconomics Theory Fourth Edition. Singapore: Springer Verlag, 2018. 461 p.
ISBN: 978-981-13-0040-0

Further reading

1.Šenfelde M. Makroekonomika. 5. izd. Rīga: RTU, 2014. 245 lpp.

2. Olney L. Martha. Macroeconomics a Second Language. Copyright 2011 John Wiley& Sons, Inc. 334 p.;

Periodicals and other sources

1. Makroekonomika www.makroekonomika.lv
2. Trading economics www.tradingeconomics.com
3. EUROSTAT www.eurostat.com

4. DOING BUSINESS Measuring Business Regulations www.doingbusiness.org

Notes

General study course for the VMF second-level professional bachelor programme Veterinary Medicine