This course comprises fundamentals of macroeconomics, measurement, and structure of the national economy, consumption, saving and investment, theory of income and employment, macroeconomic issues, and policies.

This course aims to provide an understanding of macroeconomic principles, issues, and policiesso that students can assess their effects on business environment, especially in the Nepali context.

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.