Economics

Module 1: Microeconomic Theory and International Trade This module is based upon the fundamental principles of economics: balancing costs and benefits, the concept of alternative costs, and the principle of diminishing returns. How consumer behaviour affects the demand for goods and services is studied in the light of the aforementioned principles. How the producer's production and cost structure influences the supply of goods and services is also covered. This module discusses how the public sector can influence a market through taxes and regulations as well as how taxes and regulations can be used as a means of increasing welfare in terms of information problems, environmental problems, and in cases of limited competition such as monopoly and oligopoly. In addition, international trade and investments are treated and problematised. The effects of trade restrictions such as duties and import quota are analysed. The reasons for businesses to move abroad instead of exporting from Sweden, for example, are also discussed. Module 2: Macroeconomy, Globalisation and Growth Macroeconomic theory explains aggregate quantities such as total production and its utilisation, inflation, unemployment, national budget, and balance of trade. Macroeconomic theory also shows how these quantities relate to one another. The course demonstrates both the possibilities and limits of economic policy. Economic policy is divided into fiscal policy which directly impacts real quantities in the economy, and monetary policy which influences the economy primarily through interest rates and the granting of credit by intermediate financial institutions. The various political monetary instruments of the Bank of Sweden are discussed. Different exchange rate systems are presented, partly according to their construction, and partly in terms of the various prerequisites of economic policy within different exchange rate systems. The causes of problems in the financial sector are discussed and how the problems can spread between countries when the financial system isincreasingly globalised. Another area in macroeconomic theory differentiates between longterm growth and short-term fluctuations and the underlying motivational forces for these are explained.