Macroeconomics for Business
bbssecond year
Subject Code: MGT 209
Course Title: Macroeconomics for Business
Course No: MGT 209
Nature of Course: Theory & Practical
Full Marks: 100
Pass Marks: 35
Credit Hours: 150
Unit 1 : INTRODUCTION TO MACROECONOMICS (LH 6)
Macroeconomics: concepts, scope, uses and limitations; and Macroeconomic concepts: stockand flow variables; equilibrium and disequilibrium; static and dynamic equilibrium analysis.
Unit 2 : NATIONAL INCOME ACCOUNTING (LH 20)
Circular flow of income and expenditure in two sector, three sector and four sector economy;Different concepts of national income: GDP, NDP, GNP and NNP at market price and factor cost, personal income (PI), disposable personal income (DI), per capita income (PCI); Real GDP, nominal GDP and GDP deflator; Computation of national income: product method,income method and expenditure method; and Difficulties in the measurement of national
income. Numerical Exercise
Unit 3 : CLASSICAL THEORY OF EMPLOYMENT (LH 6)
Unemployment: concept and types; Say’s law of market: concept, assumptions and implications; and Classical theory of employment: assumptions, components and criticisms.
Unit 4 : KEYNESIAN MACROECONOMICS (LH 30)
Principle of effective demand; Consumption function: concepts, psychological law of consumption, technical attributes and determinants; Saving function: concepts, technical
attributes and determinants; Paradox of thrift; Investment function: concept and types of investment, marginal efficiency of capital, investment demand curve and determinants of
investment; Income and output determination in the two-sector economy; Investment multiplier: concept, income generation process and leakages; Income and output
determination in three sector and four sector economy; and Derivation of government expenditure multiplier; tax multiplier and foreign trade multiplier. Numerical Exercise
Unit 5 : IS-LM Model of INCOME DETERMINATION (LH 7)
Derivation of IS curve and product market equilibrium; Derivation of LM curve and money market equilibrium; General equilibrium in the product market and the money market; and
Shifts in IS and LM curves (change in monetary and fiscal policies) and effects on equilibrium. Numerical Exercise
Unit 6 : INFLATION AND BUSINESS CYCLES (LH 18)
Inflation: concepts and types; Measurement of inflation through consumer’s price index
(CPI) and GDP deflator; Demand-pull inflation and cost-push inflation; Concept of core
inflation; Effects of inflation; Anti-inflationary measures; Inflation and unemployment:
Phillips curve and stagflation; Deflation: concept and causes; Nature, causes and effect of
inflation in Nepal; Business cycles: concepts, characteristics and phases; and Measures to
control business cycles. Numerical Exercise
Unit 7 : MONETARY THEORY (LH 16)
Money supply: concepts and determinants; Money market and capital market: concepts and
functions; Structure of financial market in Nepal; Monetary Policy: concepts, types,
objectives and instruments; and Features of current monetary policy of Nepal.
Unit 8 : GOVERNMENT FINANCE (LH 15)
Government budget: Concepts and components; Deficit financing: concept, objectives and
methods; Sources of government revenue in Nepal, Government expenditure of Nepal;
Features of current government budget of Nepal; Fiscal policy: concepts, types, instruments
and objectives; and Fiscal federalism: concepts, components and Nepalese practice.
Unit 9 : GLOBAL ECONOMY (LH 17)
Global economy: concept and current trends; Globalization: concepts, drivers, benefits and
defects; Regional integration and trading blocs: concepts and role; Issues of Nepali foreign
trade; Exchange rate: concept and types; Determination of equilibrium exchange rate under
fixed and flexible exchange rate system; Balance of payments: concept and BOP accounts;
Foreign direct investment: concepts, benefits, defects and current status of Nepal; and
Foreign employment: benefits, defects and current status of Nepal.
Unit 10 : CONTEMPORARY MACROECONOMICS ISSUES IN NEPALESE PERSPECTIVES (LH 15)
Macroeconomic indicators of Nepal; Privatization and liberalization: concepts, benefits and
defects; Economic growth and development: concepts and components; Sources of
economic growth; Poverty: concepts, types, causes and remedies; Economic inequality:
concepts, causes and remedies; Public private partnership: concepts, importance and
Nepalese practice; and Financial inclusion: concepts, determinants and current Nepalese
status.
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