Macro Economics

Nature of macroeconomics; Effect of macroeconomic variables and policies on economic environment for business; and Circular flow of income and expenditure in a closed and open economy.

Gross Domestic Product (GDP): concepts and measurement; Other national accounts: GNP, NNP, NI, PI, DI, GNDI and per capita income; Concept of Green GDP, Real GDP,price indexes and inflation; Saving and wealth; and Interest rates: nominal and real interest rates.

Consumption function: concept, technical attributes and determinants; Saving function: concept and technical attributes; and Investment function: concept and types, marginal efficiency of capital, investment function, and determinants of investment.

Classical theory of employment and output; Keynesian theory of income determination: two sector model, three sector model, four sector model; Multiplier: investment multiplier, government expenditure multiplier, tax multiplier and foreign trade multiplier; Paradox of thrift; and IS-LM model: derivation of IS and LM curves, determination of equilibrium output and effect in equilibrium output due to change in monetary policy and fiscal policy.

Inflation: demand-pull inflation and cost-push inflation, measurement and effects;Unemployment: concepts, types and costs; Business cycles: phases; Economic growthand development: concepts and determinants; Balance of payments: concepts andcomponents; Exchange rate: concept, fixed vs flexible exchange rate; Financial inclusion:concept and determinants; Fiscal federalism: concept and components; Public-privatepartnership: concepts; Monetary policy: concept, objectives and instruments; Fiscalpolicy: concept, instruments and objectives.