LV EN RU DE FR

Theory of Economics

Course developer

Course abstract

The aim of the study course: to develop knowledge and understanding of regularities in economics and basic principles at the macroeconomic level, and the possibilities of their practical application.

The course builds up an understanding of consumption theory, market laws and producer motivation as well as knowledge of various types of competition, efficient exploitation of resources at the micro- and macro-levels and the consequences of disequilibrium in the national economy.

Learning outcomes and their assessment

Students will be able to demonstrate:
KNOWLEDGE of
the laws of market functioning, the basic principles of cost formation, efficient resource exploitation and economic growth. Practical assignments, tests 1 and 2.
SKILLS to
perform a practical analysis of a micro and macroeconomic situation and independently draw reasoned conclusions, simulate changes in market equilibrium by critically assessing the economic situation and perform production cost calculations and an analysis of an enterprise’s performance at various levels of competition based on the theoretical knowledge acquired. Practical assignments, discussions, tests 1 and 2, homework.
COMPETENCES to

independently define and analyse a particular economic problem as well as describe the market situation based on economic laws, substantiate decisions and, if necessary, perform an additional analysis, as well as independently obtain, select and systematize the information needed for drawing reasoned conclusions and developing reasoned proposals based on the theoretical knowledge acquired. Practical assignments, tests 1 and 2.

Course Content(Calendar)

1. Basic problem for economic analysis. (Lecture - 1h)
2. Demand and supply. (Lecture - 1h, practical - 1h)
3. Elasticity of supply and demand. (Lecture - 1h, practical - 1h)
4. Consumer behaviour in the market. (Lecture - 1h, practical - 1h)
5. Production, production costs. (Lecture - 1h, practicals - 2h)
6. Types of market competition, their specifics. (Lecture - 1h)
7. Market for the factors of production (resources). (Lecture - 1h, practical - 1h)
Test 1 - Analysis of a market, demand, supply and production costs. (1h)
8. Basic macroeconomic indicators. Price indices (Lecture - 1h, practical - 1h)
9. Aggregate demand and supply. Disequilibrium in the economy. (Lecture - 1h, practical - 1h).
10. Cyclical nature of economic growth (Lecture - 1h)
11. Employment and unemployment. (Lecture - 1h, practical - 1 h)
12. Inflation. (Lecture - 1h, practical - 1h)
13. Money and the banking system. (Lecture - 1h, practical - 1h)
14. Fiscal and monetary policies. (Lecture - 1h)
15. Government budget and tax policy. (Lecture - 1h, practical - 1h)
16. International economic relations. (Lecture - 1h)
Test 2 - Calculations and analysis of main macroeconomic indicators. (1h)

17. PowerPoint presentation of independent work - (practicals - 2h)

Requirements for awarding credit points

During the semester, the student must pass two tests, submit and defend homework on innovative products developed in Latvia as well as present and defend a PowerPoint presentation of a current macroeconomic problem or an important industry. The course ends with an examination.

Final assessment of the study course – final grade (mark) is given as an accumulative assessment of the study results.

Description of the organization and tasks of students’ independent work

Homework 1. To describe the roles of value added and exports in the economy, it is necessary to give three examples of innovative products developed in Latvia, as well as sales markets for and prices on the products. Homework 1 must be submitted within the specified time for it and defended orally during a practical.

Homework 2. The student must obtain, compile, represent and analyse statistical data on a current macroeconomic problem or an important industry. Homework 2 must be submitted in PowerPoint and defended within the time specified.

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 (2x30%) and homework (40%) done during the semester. Both tests must be passed and both pieces of homework must be submitted and defended. The students who have not earned a cumulative mark must take a written examination.

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.Šenfelde M. Makroekonomika. 5. izd. Rīga: RTU, 2014. 245 lpp.;
4. Rakesh V Vohra. Prices and Quantities: fundamentals of microeconomics. Cambridge: Cambridge University Press, 2020. 207 p.;

5. Williamson D. Stephen. Macroeconomics, 6th edition, published by Pearson Education 2018. 731p.

Further reading

1. Olney M. L. Macroeconomics as a Second Language. Hoboken: John Wiley & Sons, Inc., 2011. 334 p.
2. Bikse V. Ekonomika un bankas. Latvijas Komercbanku asociācija, Konsultāciju Mācību centrs, 2009. 224 lpp.
3. Ekonomiskā krīze Latvijā: “veiksmes stāsta” pēcgarša / S.Kruka redakcijā. – Rīga: Rīgas Stradiņa universitāte, 2016. 225 lpp.
4. Plotkāns A. Cita ekonomika. Rīga: SIA Dienas Grāmata, 2010. 192 lpp.
5. Liepiņš A. Analītiskā makroekonomika / 2., papild. izd.. – Rīga: Biznesa augstskola Turība, 2007.54 lpp.
6. Gods U. Makroekonomika / 2., papild. izd. – Rīga: Biznesa augstskola Turība, 2004. 360 lpp.
7. Lībermanis G. Makroekonomika. - Rīga: Kamene, 2006. 445 lpp.
8. Latvijas ekonomikas konkurētspēja un investīciju nozīme tā veicināšanā: Monogrāfija. E. Dubras red. Rīga: LU Akadēmiskais apgāds, 2009. 168 lpp.
9. Medvedevs R. Latvijas globalizācija un kopsavilkuma plāns: Pasaules ekonomikas globalizācija un tās ietekme uz Latvijas ekonomiku. Rīga, 2009. 127 lpp.

10. Bikse V. Ekonomikas teorijas pamatprincipi: Mācību līdzeklis. Rīga: SIA Izglītības soļi, 2007.454lpp.

Periodicals and other sources

1. Latvijas Centrālās statistikas pārvaldes mājas lapa: http://www.csb.gov.lv.
2. Latvijas Republikas Ekonomikas ministrija. Latvijas tautsaimniecība: makroekonomiskais apskats, Rīga (periodisks izdevums reizi ceturksnī).
3. Latvijas Bankas mājas lapa: http://bank.gov.lv.
4. Latvijas Republikas Finanšu ministrijas mājas lapa: http://www.fm.gov.lv.
5. Kapitāls. Periodisks izdevums. Rīga : SIA „Jaunais Kapitāls”. ISSN 1407-2505.
6. Eurostat mājas lapa: http://ec.europa.eu/eurostat.
7. Journal of Monetary Economics ISSN: 0304-3932 https://www-sciencedirect-com.ezproxy.llu.lv/journal/journal-of-monetary-economics

8. Journal of Development Economics ISSN: 0304-3878 https://www-sciencedirect-com.ezproxy.llu.lv/journal/journal-of-development-economics

Notes

General study course for the Faculty of Environment and Civil Engineering second-level professional bachelor programme Civil Engineering and the Faculty of Engineering academic bachelor programme Agricultural Engineering.