Business Economics Course for Undergraduate Programme of study with Business Economics as a Single Core Discipline
Learning Objectives
This course aims at inculcating basic understanding of the fundamentals of macroeconomics. It will enable students to identify major macroeconomic issues, their applicability to the real economy.
Learning outcomes
By studying this course, the students will be able to:
•To understand the basic concept of circular flow of income in four sector economies anddifferent approaches to measurement of National Income.
•To introduce basic concepts of the money market including demand and supply aspects ofmoney.
DISCIPLINE SPECIFIC CORE COURSE – 4: MACROECONOMICS-I
• To apply the closed economy Hicks- Hansen (IS-LM) model for effectiveness of Fiscal and Monetary policies in the short run.
• To identify macroeconomic issues of developing countries in a global macro setting and its difference from issues of developed countries.
SYLLABUS OF DSC-4
UNIT–I: Introduction to Macroeconomics and National Income Accounting (6 Hours)
Origin of macroeconomics; Income, expenditure and the circular flow in three and four sectoral economies; real versus nominal GDP; price indices; measurements of gross domestic product; national income accounting for closed economy and for open economy and National Income Identity; balance of payments accounts and its components.
UNIT – II: Theory of Income Determination (9 Hours)
An introduction to Classical and Keynesian systems; Simple Keynesian Theory of Income Determination, Consumption function – MPC and APC, changes in equilibrium, Paradox of Thrift and Investment multiplier.
UNIT – III: Money, Interest and Monetary Policy (12 Hours)
Meaning and nature of money, Primary and secondary functions of money; Quantity Theory of Money–Cambridge version, Classical theory of interest rate, Loanable fund Theory and Keynesian Theory of Liquidity Preference and interest rate, Liquidity Trap; Credit Creation and Money Multiplier Determination of money supply and demand; credit creation; money multiplier, monetary base; tools of monetary policy
UNIT – IV:IS-LM Analysis and Aggregate Demand (12 Hours)
Goods market and money market, graphical derivations of the Hicks-Henson model (IS and LM functions); Properties of IS-LM curves, factors affecting the position and slope of IS-LM curves, determination of equilibrium income and interest rates; Studying the impact of fiscal and monetary policies using IS-LM framework;Macro policy in a global setting and developing countries
Unit V: Inflation (6 Hours)
Inflation: meaning; demand and supply side factors; natural rate theory; monetary policy-output and inflation (monetarist view); Phillips curve: short run and long run.
Essential/recommended readings
1. Abel Andrew B., Bernanke Ben and Croushore Dean (2011). Macroeconomics (7th edition). Pearson
2. Schiller Bradley R. and Gebhardt Karen (2019) Macro economy Today (14th edition), McGraw Hill
3. Froyen Richard T. (2013). Macroeconomics: Theories and Policies (10th ed.), Pearson.
4. Blanchard O. (2017). Macroeconomics (7th edition). Pearson
5. Dornbusch R., FischerS., and Startz R. Macroeconomics (11th edition). McGraw-Hill
6. Colander David C. (2017) Macroeconomics (9th edition), McGraw Hill
Suggested readings
1. Gordwin, Harris, Nelson, Roach and Torris (2017) Macroeconomics in context (2nd edition), Routledge Taylor and Francis Pub Indian Edition
2. Government of India (GOI) (Latest Year), Economic Survey, Ministry of Finance New Delhi.
3. Government of India (GOI) (Latest Year), Handbook of Indian Economy, RBI Publication New Delhi.
4. Mankiw N. Gregory,Macroeconomics, Worth Publishers.
5. Chugh, S. (2015) Modern Macroeconomics, MIT Press.
6. D‘Souza, E, Macroeconomics, Pearson Education
Note: Examination scheme and mode shall be as prescribed by the Examination
Branch, University of Delhi, from time to time.
- Teacher: Dr. Sultan Singh