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Principles of Macro-Economics: Course outline

Course description

This course builds upon key concepts and theories of macroeconomics. The basic theme of the course is to explore the operational functions of macro components of an economy within a society. The course aims that students develop an integrated understanding of how economic decisions are made at national level.

Macroeconomics emphasizes how society as a whole and various groups within society manage scarce resources. It considers economy wide phenomena such as unemployment and inflation while focusing on aggregate economic outcomes. To better understand aggregate economic activity, students will be introduced to economic terminology, theory, models, and application. We will cover topics including but not limited to: supply and demand, real and nominal magnitudes, trade, money, economic growth, inflation, international macroeconomics, aggregate demand, and aggregate supply

Learning outcome

At the end of this course, students will be able to:

  1. To become familiar with and readily use economic terminology.
  2. To learn about the analytical approach economists take to the problem of scarcity.
  3. To gain an intuitive understanding of macroeconomic theory and application.
  4. To acquire better critical thinking skills through the analysis of present day economic issues.
  5. To provide a foundation for possible careers in business, government, academic or other sectors.
  6. To develop a conscious recognition of economics in the world around us.

Text books

Reference book

Course content

Week 01, 02: KEY CONCEPTS OF MACROECONOMICS

•             Objectives and instruments of macroeconomics.

•             Tools of macroeconomics policy.

•             Aggregate demand and supply.

Week 03, 04: MEASURING ECONOMIC ACTIVITY.

•             Concepts of National Income.

•             Measurement of National Income. GDP, NDP, GNP & NNP, Personal Income & Disposable Personal Income

•             GDP Deflator and a real GDP

•             National Income as a measure of economic welfare

Week 05, 06: CONSUMPTION AND INVESTMENT.

•             Consumption, Income and saving.

•             Consumption Function.

•             Saving Function.

•             The Marginal Propensity to Consume and Average Propensity to consume

•             The Marginal Propensity to save and Average Propensity to save

•             Determinants of Consumption

•             Determinants of Investment (Rate of interest, MEC)

Week 07: INCOME AND EMPLOYMENT DETERMINATION

•             Classical approach.

•             Modern approach (Keynesian)

•             Post Keynesian Approach

Course content

Week 08: MULTIPLIER AND ACCELERATOR

•             Investment Multiplier.

•             Tax multiplier, foreign trade multiplier and super multiplier.

Week 09: FISCAL AND MONETARY POLICIES

•             Fiscal Policy

•             Monetary Policy

Week 10: INFLATION

•             Nature and kinds.

•             Inflationary and deflationary gaps.

•             Inflation and unemployment.

Week 11: BUSINESS CYCLE

•             The concept of Business Cycle

•             Business Cycle Theories

•             Business Cycle & Business Decision Making

Week 12, 13: INTERNATIONAL TRADE

•             Classical theory of International trade (CIT)

•             Modern theory of International trade (H-O-Theorem)

•             Economic Integration and Regional Cooperation.

•             Protection and free trade.

•             WTO (Objectives and role)

Week 14: BALANCE OF PAYMENTS

•             Balance of Payments Accounts.

•             Disequilibrium & Imbalance of Payments.

•             Causes and Remedies.