Theoretical and quantitative analysis are applied within the context of institutional and cultural constraints to solve economic problems in the private and public sectors.

The department of economics offers a bachelor of business administration in economics and a minor in economics for students not majoring in the College of Business Administration. IN addition, a bachelor of arts in economics is offered jointly with the College of Arts, Humanities, and Social Sciences

Kenneth Galchus

kegalchus@ualr.edu
501-569-8872

We assess the Economics Major in each of the three required upper level courses (Intermediate Macroeconomic Theory, Intermediate Microeconomic Theory, Business Forecasting) as well as other upper-level Economics course (International Economics and Environmental Economics). We assess in each of these classes by taking questions from tests (and possibly adding additional specific questions) that specifically relate to the Course Objectives and Major Objectives. The data are presented in the following manner for each of the courses. Each question is related to a Course Objective and Major Objective, and then the percent of the entire class that correctly answered each question is reported. Changes, in terms of class time spent on each topic will be adjusted based on which objectives students did “well” and “poor” on. In 2005, we continued testing course objectives in International Economics in order to compare with results in the previous year and started to collect data in Intermediate Macroeconomic Theory in order to assess different objectives than we have in the past.

Furthermore, in 2003, we began sequencing the principles classes with Principles of Microeconomics as a prerequisite for Principles of Macroeconomics. We are in the process of gathering data to study how this affects student performance.

This year, we will begin administering a standardized test in our Intermediate Macroeconomic Theory class that was developed by the National Council on Economic Education to assess potential deficiencies of our economics majors relative to the body of knowledge that a national organization believes are important concepts. The results will be used to start assessing student performance.

Furthermore, based on discussion with students, finance faculty, and an outside stakeholder, it was suggested that more data collection and analysis would help to better prepare our students. To accomplish this, 2 projects were given in the International Economics class and the students in the Intermediate Macroeconomic Theory class in 2005 had to prepare a mock Federal Reserve meeting where they analyzed macroeconomic data and prepared a policy recommendation.

This year, as with last year, we collected data on specific course objectives in the International Economics and Intermediate Macroeconomics classes. The results this year and last year are as follows:

2004 Results for International Economics

Course Objective tested - 2; Major Objective - 1
Free trade: average = 85%; 7 (A’s), 4(B’s), 1(C’s), 3 (D’s), 0 (F’s)
Trade barriers: average = 78%; 4 (A’s), 8 (B’s), 1 (C’s), 1 (D’s), 1 (F’s)

Course Objective tested - 3; Major Objective - 1
Effective and real exchange rates: average = 82%; 5 (A’s), 4 (B’s), 5 (C’s), 1 (D’s), 0 (F’s)

Course Objective tested - 5; Major Objective - 4
Convert currencies: average = 93%; 10 (A’s), 3 (B’s), 2 (C’s), 0 (D’s), 0 (F’s)
Bid and offer: average = 75%; 3 (A’s), 7 (B’s), 2 (C’s), 2 (D’s), 1 (F’s)
Interest rate parity: average = 93%; 9 (A’s), 3 (B’s), 3 (C’s), 1 (D’s), 1 (F’s)

Course Objective tested – 4; Major Objective – 4
Balance of Payments: average = 82; 6 (A’s), 5 (B’s), 2 (C’s), 2 (D’s), 0 (F’s)
Course Objective tested – 1; Major Objective – 1
Trade Theories (this is new this year): average = 74; 2 (A’s), 5 (B’s), 4 (C’s), 4 (D’s), 0 (F’s)

As can be seen from the above results, in 2004 the weakest areas were TRADE THEORIES and BID AND OFFER. In 2005, these areas were emphasized a bit more with more in-class discussion and examples. The 2005 Results for International Economics are as follows:

2005 Results for International Economics

Course Objective tested - 2; Major Objective - 1
Free trade: average = 78%; 4 (A’s), 4(B’s), 6(C’s), 3 (D’s), 1 (F’s)
Trade barriers: average = 74%; 4 (A’s), 6 (B’s), 5 (C’s), 3 (D’s), 0 (F’s)

Course Objective tested - 3; Major Objective - 1
Effective and real exchange rates: average = 88%; 10 (A’s), 5 (B’s), 3 (C’s), 0 (D’s), 0 (F’s)

Course Objective tested - 5; Major Objective - 4
Convert currencies: average = 92%; 10 (A’s), 7 (B’s), 1 (C’s), 0 (D’s), 0 (F’s)
Bid and offer: average = 78%; 3 (A’s), 8 (B’s), 6 (C’s), 0 (D’s), 1 (F’s)
Interest rate parity: average = 90%; 9 (A’s), 5 (B’s), 4 (C’s), 0 (D’s), 0 (F’s)

Course Objective tested – 4; Major Objective – 4
Balance of Payments: average = 86; 7 (A’s), 7 (B’s), 3 (C’s), 1 (D’s), 0 (F’s)

Course Objective tested – 1; Major Objective – 1
Trade Theories (this is new this year): average = 70; 3 (A’s), 6 (B’s), 3 (C’s), 5 (D’s), 1 (F’s)

As can be seen from the results, the results for FREE TRADE, TRADE BARRIERS, and TRADE THEORIES decreased from the previous year. We believe that this is primarily attributable to having a new professor teach the class. Prior to 2005, International Economics was solely taught by Dr. Elder, but in 2005 and for the foreseeable future, the class was team taught by Dr. Funk and Dr. Elder with Dr. Funk teaching the trade material. This was the first time that Dr. Funk taught this material at UALR.

2004 Results for Intermediate Macroeconomic Theory

From the report submitted in 2005, the following results were collected in 2004 for a comparison with 2005 in order to start changing the areas we assess.

Course Objective tested - 1; Major Objective - 3
IS-LM model: average = 72%; 2 (A’s), 4(B’s), 3(C’s), 3 (D’s), 1 (F’s)

Course Objective tested - 5; Major Objective – 3
Effects of Monetary Policy: average = 86%; 4 (A’s), 4 (B’s), 3 (C’s), 0 (D’s), 0 (F’s)
Effects of Fiscal Policy: average = 82%; 6 (A’s), 3 (B’s), 4 (C’s), 0 (D’s), 0 (F’s)
Monetary and Fiscal policy within open economy: average = 75%; 3 (A’s), 4 (B’s), 4 (C’s), 1 (D’s), 1 (F’s)

Course Objective tested - 6; Major Objective - 4
Solow Growth Model: average = 72%; 3 (A’s), 2 (B’s), 5 (C’s), 2 (D’s), 1 (F’s)

2005 Results for Intermediate Macroeconomic Theory

The following results were collected in 2005

Course Objective tested - 1; Major Objective – 3IS-LM model: average = 90%; 8 (A’s), 8(B’s), 0(C’s), 0 (D’s), 0 (F’s)

Course Objective tested - 5; Major Objective – 3
Effects of Monetary Policy: average = 73%; 4 (A’s), 3 (B’s), 8 (C’s), 0 (D’s), 1 (F’s)
Effects of Fiscal Policy: average = 82%; 1 (A’s), 8 (B’s), 6 (C’s), 0 (D’s), 1 (F’s)
Monetary and Fiscal policy within open economy: average = 85%; 12 (A’s), 3 (B’s), 1 (C’s), 0 (D’s), 0 (F’s)

Course Objective tested - 6; Major Objective - 4
Solow Growth Model: average = 78%; 4 (A’s), 6 (B’s), 4 (C’s), 2 (D’s), 0 (F’s)

As can be seen from a comparison of the 2004 and 2005 results, the students did significantly better on the IS-LM and Monetary and Fiscal policy within an open economy material, and much worse on the Effects of Monetary and Fiscal Policy material. We believe that this is primarily attributable to the fact that a higher than usual number of students in the Intermediate Macroeconomic Theory class had also taken the International Economics class where the Monetary and Fiscal Policy Within an Open Economy material was briefly discussed. It may seem odd that students did so well on Monetary and Fiscal policy within an Open Economy while doing so poorly on the Effects of Monetary and Fiscal policy material, but the latter involves much more subtle argument and more sophisticated topics. In the Intermediate Macroeconomic Theory class in 2006, much more attention will be devoted to the Effects of Monetary and Fiscal policy as it is believed that this material is central to the course. In addition, more attention will be devoted to developing and discussing the issues students have surrounding their FOMC project as this will presumably increase their understanding of Monetary policy.

Furthermore, in discussions with the Finance faculty, a couple of issues have been raised concerning the material that students should be learning in the Principles of Economics courses. Two such issues are the distinction between economic profit and accounting profit and the implications of competitive markets on economic profit. Although all the Economics faculty cover these topics, obviously the students are not retaining the information so it has been decided that these topics will be emphasized more in the Principles courses by all the Economics faculty. Related to this, it has been decided that we should have more regular and more formal meetings between the faculty to raise issues in the future that the College faculty need students to know so a more concerted effort will be made in the future to continue with these meetings.

The degree to which students have a “demonstrated ability/understanding” is measured by the percent of students correctly answering specific questions that are specifically tied to Course Objectives and Major Objectives (by the matrix relating Course Objectives to Major Objectives). As a major, we believe that a “demonstrated ability/understanding” exists if at least 70% correctly answer a question.

As mentioned above we believe we have two groups of stakeholders - Economics majors and the other disciplines of the College of Business (since we serve as a service department to a large extent teaching the core courses and as upper-level electives for other majors). In 2005, we had a departmental meeting where the Finance faculty commented on our program and the preparedness of our students with respect to Economics issues that the Finance faculty need students to retain. As mentioned above, the Finance faculty had a variety of comments that helped to redirect some efforts in the Principles of Economics courses.

In terms of communicating our assessment results with students, we make an effort at the beginning of each relevant class to discuss a basic outline of the topics that will be covered throughout the term and in so doing, emphasize how each particular term will be slightly different, in terms of coverage and time devoted to each topic, relative to the previous term.