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Detailed SyllabusThe Class of 2012 Second Semester

Macroeconomics & Business Environment

Class of : 2012 Academic Year : First

Course Code : SL EC 502 Semester : II

Credit : 3 Sessions : 33

Learning Objective

After completing the course the student will be able to

Understand and explain the economic environment

Explain determination of equilibrium income and general equilibrium

Analyse business cycles, and price instability banking systems

Discuss fiscal policy

Evaluate open economy frame work

REFERENCE BOOKS AUTHOR / PUBLICATION

Macroeconomics Dornbush, Rudiger/ Fischer, Stanley/

Stanz, Richard7ed - TMH

Macroeconomics IUP

Global Business Environment IUP

Macroeconomics, 10th

e Dornbusch, Rudiger et al. Mcgraw Hill - 2008

Macroeconomics, 2nd e Farmer, Roger E.A. Thomson South Western -

2002

Macroeconomic Analysis, 4th

e Shapiro, Edward. Harcourt Brace Jovanovich -

1978

Macroeconomics, 18th

e Samuelson, Paul Anthony et al. Irwin/mcgraw-

hill - 2004

Macroeconomics Delong, J. Bradford. Mcgraw Hills

Economic Survey 2007-08 Ministry of Finance, Govt. of India, OUP - 2008

Detailed Syllabus

Introduction to Economic Analysis:Microeconomics Vs. Macroeconomics, Goals of

Macroeconomic policy, Objectives and

Instruments of Macroeconomics

Measuring National output / Income: Concept

of national product, Variants of national

product, Methods of measuring national Income

and problems of measuring, Real Vs Nominal,

Price indices and its applications

Aggregate Demand and Aggregate Supply-

Meaning of AD and AS curves

Determination of Equilibrium Income-Components of aggregate Demand,

Consumption function, Marginal propensity to

Consume, Determinants of Consumption,

Saving function, Investment function,

Determinants of Investment, Government

spending, Net exports

Product market - Shifts in AD, Concept of

multiplier - simple multiplier, investment

multiplier, multiplier in the presence of taxes

and balanced budget, foreign trade multiplier,

Money market - Functions of money, Demand

for money and supply of money- Determination

of interest rates, Real vs. nominal interest rate,

Hicks Hansen Model: IS LM analysis,

Deriving aggregate demand curve

Aggregate Supply - Demand function for

labour, supply function of labour, Labour

market equilibrium under classical and

Keynesian models

General equilibrium using AD curve and AS

curve

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Economic Instability and Fluctuations:

Business Cycles: Features of business cycle,

Business cycle theories

Unemployment: Types of unemployment:

Okuns Law, Impact of unemployment

Price Instability: Types of inflation, Economic

impacts of inflation, Price in the AD-AS

framework, The Phillips Curve,

Monetary policy and the role of bankingsystems- Deposit creation, Balance sheet of a

central bank, Measures of monetary and

liquidity aggregates, Money multiplier,

Instruments of money supply control,

Determination of money supply

Fiscal policy - Fiscal instruments, Tax

structure, Laffer curve, Types of deficits, Fiscalpolicy and stabilization, Public debt, Crowding -

out effect.

Open Economy Framework: International Vs.

domestic trade, Theories of International Trade,

Protectionism and WTO, Issues related to tariff,

Determination of Exchange Rate, Floating

exchange rate, Fixed exchange rate, Balance of

Payments. Globalization and Global imbalance.

Business Environment in Indian context-

Growth phases, Evolution of institutional

framework - emphasis on planning, public andprivate sector, Recent policy measures-

monetary fiscal, foreign trade and technology.

Cases

Macroeconomics

India: Before and After VAT

Should Energy be Subsidized?

The Indian Economy: Dealing with

Inflation

Softwood Lumber Dispute between

Canada and the USA

The US-China Exchange Rate Stand-Off

Business Environment

Hungarys Reform Process

Gazprom - Naftogaz Ukrainy Dispute:

Business or Politics?

The South African Economy: Coping with

the Legacy of Apartheid

(Source: Case Studies in ManagementVolume IX)

Suggested Schedule of Sessions

TopicNo. of

Sessions

Overview of Macroeconomics 1

Measuring National Income/output 4

AD and AS curvesan introduction 1

Aggregate Demand and multiplier 2

Product market equilibrium 2

Money market equilibrium 2

Aggregate supply 2

General equilibrium using AD and

AS curves

1

Economic instability and fluctuations

Business cycles1

Unemployment and price instability 2

Case on The Indian Economy:

Dealing with Inflation

1

Monetary policy and the role banking

system (including case discussion)

3

Fiscal policy and instruments

(including case discussion)

3

Open economic framework

(including case discussion)

3

Case on The US-China Exchange

Rate Stand-Off

1

Business environment in Indian

context

4

Total 33