Macroeconomics - Syllabus
Embark on a profound academic exploration as you delve into the Macroeconomics course (Macroeconomics) within the distinguished Tribhuvan university's BBS department. Aligned with the 2013 Syllabus, this course (MGT 206) seamlessly merges theoretical frameworks with practical sessions, ensuring a comprehensive understanding of the subject. Rigorous assessment based on a 100 marks system, coupled with a challenging passing threshold of , propels students to strive for excellence, fostering a deeper grasp of the course content.
This 3 credit-hour journey unfolds as a holistic learning experience, bridging theory and application. Beyond theoretical comprehension, students actively engage in practical sessions, acquiring valuable skills for real-world scenarios. Immerse yourself in this well-structured course, where each element, from the course description to interactive sessions, is meticulously crafted to shape a well-rounded and insightful academic experience.
Course Objectives
This course of macroeconomics aims to enhance understanding of students on the macroeconomic theories and develop skills of students in using
these theories in business decision making under different economic environment.
Course Description
This course of macroeconomics makes students capable to understand macroeconomic theories and contemporary macroeconomic issues in
reference to Nepal. This course consists of introduction to macroeconomics, national income accounting, classical theory of employment, Keynesian macroeconomics, inflation, business cycles, monetary theory and policy, government finance and fiscal policy and contemporary issues in references to Nepal.
Units
Meaning, scope, uses and limitations of macroeconomics; Difference and interdependence between macro and microeconomics; Concept of new classical school and new Keynesian; Macroeconomic concept: Stock and flow variables; Equilibrium and disequilibrium; Static, comparative static and dynamic analysis.
National Income Accounting
Circular flow of income and expenditure in two sector, three sector and four sector economy; Meaning of national income; Different concept of national income: GDP, NDP, GNP, NNP, national income at factor cost (NI), personal income (PI), disposable personal income (DI), per capita income (PCI); Real and nominal GDP, GDP deflator; Computation of National income: Product, Income and Expenditure method; Difficulties in measurement of national income; Importance of national income accounting.
(Numerical exercise)
Classical Theory of Employment
Concept and types of unemployment; Say’s law of market and its implications; Determination of equilibrium level of employment and output under classical theory; Critical evaluation of classical theory.
(Numerical exercise)
Kaynesian Macroeconomics
Keynesian theory of employment: Principle of effective demand; Consumption function: Concept, classification, Psychological law of
consumption, determinants of consumption function; Saving function: Concept, classification, determinants of saving and paradox of thrift; Investment function: concept and types of investment, Marginal efficiency of capital, investment demand curve, determinant of investment; Income and output determination in two sector economy; Investment Multiplier: Concept, income generation process, leakages and criticism.
(Numerical exercise)
Income determination (IS-LM) model: Hicks-Hansen Approach
An Introduction to Product market equilibrium (derivation of IS curve); Money market equilibrium (derivation of LM curve); General equilibrium in the product market and the money market.
Inflation
Meaning and types of inflation; Measurement of inflation through consumers price index (CPI)
Demand pull inflation and cost push inflation: concept and causes; Effects of Inflation; Anti inflationary measures; Inflation and unemployment: Phillips curve; Concepts of Deflation and Stagflation.
(Numerical exercise)
Business Cycles
Concept, types and characteristics of business cycle; Phases of business cycle; Measures to control business cycle.
Monetary Theory
Money supply: Concept and determinants; Demand for money: Keynesian approach; Money market and capital market: Meaning and function; Monetary Policy: Concept, types, objectives and instruments of monetary policy; Exchange rate: Determination of equilibrium exchange rate under fixed and flexible exchange rate system.
Government Finance
Government budget: Concept, classification, and component and Government budget; Deficit financing: Concept, objectives and
methods of deficit financing; Fiscal policy: Concept, types, objectives and instruments of fiscal policy.
Contemporary Issues (with reference to Nepal)
Privatization, Liberalization and Globalization: Concepts, benefit and defects; Foreign direct Investment: Benefit, defects and current status of Nepal; Economic growth and Development: Concept and sources of economic growth; Foreign employment: Benefits, defects and current status of Nepal; Poverty: Concept, types, causes and remedies; Economic inequality: Concept, causes and remedies.