This course of macroeconomics makes students skilled to understand macroeconomic concepts, theories and contemporary macroeconomic issues pertinent in Nepal. This course comprises an introduction to macroeconomics, national income accounting, the classical theory of employment, Keynesian macroeconomics, IS-LM model, inflation, business cycles, monetary theory and policy, government finance and fiscal policy, the global economy and contemporary issues in references to Nepal.

Macroeconomics for Business aims to enhance understanding of macroeconomic principles and Nepalese macroeconomic situation to the Bachelor level students. It will help to inculcate the skills incorporating different macroeconomic domain in assessment of nature of business environment.

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.