Unit I: Nature and Scope of Macroeconomics 4 hours
Meaning and Concept of macroeconomics; Basic issues in macroeconomics: unemployment, inflation, business cycles, and economic growth; Scope and importance of macroeconomics; Distinction and interdependence between microeconomics and macroeconomics.
Unit II: National Income: Concept and Measurement 10 hours
Circular Flow of Income and Expenditure: two, three and four sector economy, Meaning, definitions and various concept of National income, Methods of computing/measuring National income, Difficulties in the measurement of National income, Importance of National income analysis.
Unit III: Theories of Employment 5 hours
Classical theory of employment and output, Summary of the classical model (including Say’s law and Quantity theory of money), Principle of Effective Demand: Aggregate demand price, Aggregate supply price, Determination of effective demand, Importance of effective demand, Repudiation of Say's law and Full Employment Theory.
Unit IV: Consumption Function, Saving Function and Investment Functions 7 hours
Meaning of consumption function, Keynes's psychological law of consumption, Concept of MPC and APC, Determinants of the consumption function, Measures to raise the propensity to consume, Saving function, Meaning of capital and investment, Types of investment, Determinants of investment, Marginal Efficiency of Capital (MEC), Marginal Efficiency of Investment (MEI); Relation between MEC and the MEI.
Unit V: Macro-Economic Equilibrium 12 hours
Meaning and concepts goods market, Determination of equilibrium level of income in two-, three- and four- sector economy (Goods market equilibrium) with aggregate expenditure and aggregate output, Equilibrium with saving and investment, Concept of multiplier, Determination of multiplier in two-, three- and four-sector economy, Leakages of multiplier, Importance of multiplier. IS and LM Function: General Equilibrium of Product and Money Markets, The product (goods) market, Deriving the IS Curve, The money market, Deriving the LM Curve, Shift in the IS and LM functions, Changes in general equilibrium, Simultaneous shift in the IS and LM function, Derivation of aggregate demand curve (AD), Derivation of aggregate supply curve (AS), Equilibrium with AD-AS, change in macroeconomic equilibrium with shift in AD and AS.
Unit VI: Macro-Economic Phenomenon and Policies 10 hours
Inflation: Meaning and measures of inflation, inflationary gap, Causes of inflation, Effects of Inflation, The Phillips curve: The short-run relationship between unemployment and inflation, Business Cycles: Meaning of business cycles (economic fluctuations), Phases of a typical business cycle: Recovery; prosperity; recession, and depression, Counter cyclical measures, Fiscal and Monetary Policies: Objectives, tools and policy measures in developing countries.