Macro Economics
bbasemester 2
Subject Code: ECO 202
Course Title: Macro Economics
Course No: ECO 202
Nature of Course: Theory & Practical
Full Marks: 100
Pass Marks: 50
Credit Hours: 3
Unit 1: Fundamentals of Macroeconomics 3 LHs
Nature of macroeconomics; Effect of macroeconomic variables and policies on economicenvironment for business; and Circular flow of income and expenditure in a closed and
open economy.
Unit 2: The Measurement and Structure of the National Economy 5 LHs
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 realinterest rates.
Unit 3: Consumption, Saving and Investment 4 LHs
Consumption function: concept, technical attributes and determinants; Saving function:concept and technical attributes; and Investment function: concept and types, marginalefficiency of capital, investment function, and determinants of investment.
Unit 4: Theory of Income and Employment 10 LHs
Classical theory of employment and output; Keynesian theory of income determination:two sector model, three sector model, four sector model; Multiplier: investmentmultiplier, government expenditure multiplier, tax multiplier and foreign trade multiplier;Paradox of thrift; and IS-LM model: derivation of IS and LM curves, determination ofequilibrium output and effect in equilibrium output due to change in monetary policy andfiscal policy.
Unit 5: Macroeconomic Issues and Policies 10 LHs
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.
Sloman, J. and Sutclife, M. Economics for Business, New Delhi, Pearson Education. Latest
Edition
Shreshtha, R. G. and Adhikari, G. M. Macroeconomics for Business: Theories and Applications,
Kathmandu, KEC Publication. Latest Edition
Various publications and journals of NRB, OECD, ADB, CBS, World Bank, Ministry of
Finance, National Planning Commission and so on.