Course Number: SS212

Course Title: Economy of Micronesia

STUDENT LEARNING OUTCOMES 

General  

1. Understand and apply the basic principles of macroeconomics and microeconomics to an analysis of the FSM national and state
    economies
2. Demonstrate a detailed knowledge and understanding of the dynamics of the FSM private sector and public sector economies and
    how they interact.
3. Demonstrate a detailed knowledge and understanding of the various sub - sectors of the FSM economy including their performance,
    constraints and prospects for the future
4. Demonstrate the ability to perform economic analyses of the various sectors of the FSM economy and to make policy
    recommendations for their development or reform.
5. Demonstrate an understanding of the FSM national and state economic planning and development processes

Specific 

Students will be able to:
Unit 1 -  Introduction to Macroeconomics (chapters 1&2)

 1. Explain the concept of scarcity as it relates to land, labor, entrepreneurship and capital
 2. Explain how the study of economics is basically a study of human choice.
 3. Define macroeconomics
 4. Define microeconomics
 5. Explain how theories and models are used to help us understand economic phenomena
 6. Explain how the ceteris paribus assumption and the confusion of association with causation can cause errors in economic thinking
 7. Compare and contrast positive economics with normative economics
 8. Explain the three fundamental economic questions Define opportunity cost
 9. Define marginal analysis
10. Discuss the production possibilities curve
11. Explain the law of increasing opportunity costs
12. Discuss the utility of shifting the production possibilities curve

Unit 2  -  Introduction to Microeconomics (chapter 3)

1. Explain the law of demand and apply it to the local situation
2. Distinguish between the individual demand cure and the market demand curve
3. Distinguish between changes in quantity demanded and changes in demand
4. Discuss upward and downward shifts in demand and apply it to the local FSM situation
5. Discuss the nonprice determinants of demand
6. Explain the law of supply
7. Distinguish between changes in quantity supplied and changes in supply
8. Discuss the nonprice determinants of supply
9. Demonstrate the ability to correctly apply market supply and demand concepts of market, surplus, shortage and equilibrium price and quantity

Unit 3 The Public Sector (chapter 16)

1. Explain how the factors of size and growth affect government expenditure patterns
2. Discuss typical government expenditure patterns and categories of expenditures.
3. Explain the various means by which government finance their budgets.
4. Discuss the various issues related to taxation including efficiency, equity, progressive taxes, regressive taxes and proportional taxes
5. Explain the public choice theory of government decision - making to allocate resources

 Unit 4  -  International Trade & Finance (chapter 21)

1. Explain why nations need trade
2. Explain the effects of specialization on national and world economies
3. Define comparative advantage
4. Define absolute advantage
5. Discuss the benefits of and arguments in favor of free trade
6. Discuss the benefits of and arguments in favor of protectionism
7. Explain the concept of balance of payments
8. Discuss the ways in which exchange rates affect national and international economies

 Unit 5  -  Private Sector Management in the FSM (2nd Economic Summit Report)

1. Discuss both the growth and contraction of various private sector enterprises in the FSM between 1986 - 2000
2. Characterize and discuss the present nature of the private sector in the FSM
3. Discuss the factors which limit private sector growth in the FSM including excessive government direction and intervention, large
    public sector employment, skill limitations, land tenure systems, variable transparency and efficiency, attitudes toward foreign
    investment, infrastructure and transportation, fuel costs
4. Discuss recent efforts to stimulate the FSM private sector including government downsizing and wage restraint, privatization,
    conducive regulatory environment, foreign investment, banking deregulation, land titling, business support and outreach
5. Discuss ideas for accelerating FSM private sector development in the future including more competitive markets, more efficient
    transactions, more effective public agencies, more efficient and cost effective infrastructure and commitment to economic reforms.
6. Discuss the performances, constraints and opportunities of the agriculture, fisheries and tourism sectors in the FSM.

Unit 6  -  Public Sector Management in the FSM (2nd Economic Summit Report)

1. Discuss the growth or contraction of the FSM economy between the periods of 1986-2000
2. Discuss the indicators used to determine economic growth or contraction including employment and wages, banking, fiscal
    performance, external debt and economic reform.
3. Discuss the key issues with FSM public sector management today including reduced reliance on foreign aid, revenue generation,
    delivery of public services, government interference in business, national and state fiscal prudence, improvement of government
    financial management and personnel management.