Course Plan

Socio-economic Environment of Business

KG2 SEB3 Prof.K.J.Paulose / Dr.K.R.Nisha

Term 2
December 2013 - March 2014

SCMS - COCHIN

Post Graduate Diploma in Management (PGDM)

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Table of Contents 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. COURSE PROFILE: ...................................................................................................................... 3 COURSE OBJECTIVE: ................................................................................................................. 3 COURSE OUTLINE ...................................................................................................................... 3 COURSEWARE: ............................................................................................................................. 3 COURSE IMPLEMENTATION: PEDAGOGY & EVALUATION APPROACH ..................... 4 THE INTERNAL ASSESSMENT .............................................................................................. 10 MILESTONES / IMPORTANT DATES ................................................................................... 10 SESSION PLAN .......................................................................................................................... 10 MID TERM EXAMINATION COVERAGE AND QP PATTERN .......................................... 12 END TERM EXAMINATION COVERAGE AND QP PATTERN ......................................... 13

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1. Course Profile:
Course Title Number Programme Total Credits Total Number of Sessions Session Duration Faculty/course facilitator Socio-economic Environment of Business KG2SEB3 Post Graduate Diploma in Management (PGDM) 3 24 1 Hr15 Mins Prof. K J Paulose, and Dr. K. R. Nisha

2. Course Objective:
To facilitate students to analyze the macroeconomic environment of business using basic tools of economics. To enable students to acquire the knowledge of macroeconomic policies and issues and its impact on the society and the business organization. To equip the students to identify and critically examine the contemporary economic and social issues affecting both the Indian and Global Economy.

3. Course Outline:
Module 1 2 3 4 5 6 Weightage Sessions 15% 15% 20% 15% 15% 20% 14 57 8 12 13 15 16 18 19 24 Topics Introduction to macroeconomic concepts and Measurement of macroeconomic aggregates Macroeconomic policies: Role of Central Bank and the Government Determination of Equilibrium Income Economic Fluctuations and Economic policies International Trade and open economy macroeconomics Economic and Social Environment

4. Courseware:
Book/ Journal/Article/Case Studies Basic references Economics Macroeconomics for Management Students Indian Economy Author Samuelson and Nordhaus A.Nag Rudder Dutt and K.P.M. Sundaram Year/ edition/volume 2002, 17th Ed 1999, 1st Ed 2003, 48th Ed Publisher Tata McGrawHill Macmillan S. Chand 3

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Business Environment Macroeconomic Theory Principles of Macroeconomics Economic Environment of Business Additional reading Macroeconomics RudigerDornbusch; Stanley Fischer; Richard Startz Ministry of Finance, Govt. of India, OUP - 2008 M.L. Jhingan Ray, Debraj Paul R Krugman& Maurice Obstfeld 2006 9th edition Tata Mcgraw Hill Ministry of Finance, Govt. of India, OUP 2008 Vrinda Publications (P) Ltd OUP, New Delhi Pearson Publications Francis Cherunilam M.C.Vaish C. Rangarajan, B.H Dholakia S. K. Misra and V. K. Puri 2004, 15th Ed 2002, 12th Ed Reprint 2004 2004 4th edition 2007 Himalaya Vikas Tata McGrawHill Himalaya Publications

Economic Survey 2010-11

Economic Survey 2007-08

Macro Economic Theory Development Economics International Economics: Theory & Policy Websites Reserve Bank of India Central Statistical Organization Ministry of Statistics and Programme Implementation Union Budget and Economic Survey Ministry of Commerce and Industry Directorate general of Foreign trade

11th Edition 2004, 2ndEdn 6th Edition 2007

http://www.rbi.org.in/ http://mospi.nic.in/Mospi_New/upload/national_accou nta.pdf http://mospi.nic.in/Mospi_New/site/home.aspx http://indiabudget.nic.in/ http://dgft.gov.in/

5. Course implementation: Pedagogy & Evaluation Approach 5.1 Module 1

Module name Sessions Weightage Introduction to macroeconomic concepts and Measurement of macroeconomic aggregates 1,2 , 3& 4 15%

5.1.1 Learning objective To introduce the basic concepts in macroeconomics To discuss the methods of measurement of macroeconomic aggregates 4

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5.1.2 Pre requisite General reading on GDP/GNP concepts discussed in foundation course. 5.1.3. Pedagogy / Structure of lessons A combination of lectures and discussions on any relevant and current articles. Familiarize the CSO website for GDP calculation of Indian economy.

Material for discussion:

Basic concepts of National Accounts Aggregates from the Ministry of Statistics and Programme Implementation http://mospi.nic.in/Mospi_New/upload/national_accounta.pdf 5.1.4 Learning Outcome Students will be able to Comprehend the methods of measuring macroeconomic aggregates. Analyze national accounts statistics of Indian economy. Analyze the economic growth of India over the past decades. 5.1.5. Courseware of the module: Author A Nag MC Vaish Debraj Ray C Rangarajan and B H Dholakia

Text book Macroeconomics for management students Macroeconomic Theory Development Economics Principles of Macroeconomics

Chapter Reference Chap 1 Chap 4 Chap 1 & 2 Chap 1&2

5.1.5. Evaluation for the module Assignment I Marks 10 Marks Topic No and/ or specification Module 1

5.2 Module 2
Module name Sessions Weightage 5.2.1 Macroeconomic policies: Role of Central Bank and the Government 5-7 15%

Learning objective Enable students to understand the instruments of Monetary and Fiscal Policies Facilitate students to acquire knowledge on role of banking system and method of credit creation (money multiplier) To evoke critical thinking among students to assess the impact of monetary and fiscal policies on business and economic environment. 5

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5.2.2 Pre requisite General reading of current articles on Monetary Policies and Fiscal Policies. 5.2.3. Pedagogy / Structure of lessons A combination of lectures and discussions. Familiarize the data availability on components of money stock in the RBI website and computation of money multiplier. Discussion on the quarterly reviews of Monetary Policy announced by RBI and its implication on the Economy. Article for discussion: Relevant articles from business magazines/newspapers 5.2.4 Learning Outcome Students will be able to explain The instruments of monetary and fiscal policies The role of banking system and method of credit creation. The impact of monetary policy on money stock in terms of money multiplier. 5.2.5. Courseware of the module: Author M. C. Vaish A. Nag Dornbusch, Fischer and Startz C Rangarajan and B H Dholakia 5.2.5. Evaluation for the module MCQ II Marks 5 Marks Topic No and/ or specification Module 2

Text book Macroeconomic Theory Macroeconomics for Management Students Macroeconomics Principles of Macroeconomics

Chapter Reference Ch. 40 & 42 Ch. 9 Chap 16 Chap 7

5.3 Module 3
Module name Sessions Weightage Determination of Equilibrium Income 8 -13 20%

5.3.1 Learning objective Enable students to Identify the importance of consumption, investment and saving in determining national income. Analyze the multiplier impact of change in investment on National income. Comprehend the concepts of Aggregate Demand and Aggregate Supply Examine general equilibrium using AD and AS 6

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5.3.2 Pre requisite General reading of text books and articles on Product and Money market 5.3.3. Pedagogy / Structure of lessons A combination of lectures and discussions. 5.3.4 Learning Outcome Students acquire a fair understanding of the concept of equilibrium income determination and concept of investment multiplier. Students will be able to describe the concepts of AD and AS Students will be able to analyze the impact of monetary and fiscal policy on AD and AS. 5.3.5. Courseware of the module: Author M. C. Viash A. Nag Dornbusch, Fischer and Startz Samuelson and Nordhaus 5.3.5. Evaluation for the module Class Test I Marks 10 Marks Topic No and/ or specification Module 3.

Text book Macroeconomic Theory Macroeconomics for Management students Macroeconomics 5.1.2 Economics 5.1.3

Chapter Reference Ch. 14-19, 23 Ch. 8 Chap 3-4 & 13-15 Chap 22 -24

5.4 Module 4
Module name Sessions Weightage Economic Fluctuations and Economic policies 13, 14& 15 15%

5.4.1 Learning objective Enable students to Acquire knowledge on the concepts of unemployment and inflation and its measurement Analyze the impact of inflation and unemployment on AD, AS and on economic stability 5.4.2 Pre requisite General reading of text books and articles related to business cycles and general equilibrium. 5.4.3. Pedagogy / Structure of lessons A combination of lectures and discussions on Great Depression of 1930s and financial crisis of 2008 in the context of Keynesian theory of Aggregate demand. 7

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5.4.5 Learning Outcome Students will be able to describe how inflation and unemployment affect aggregate demand and aggregate supply. Students will acquire the analytical skills to assess the impact of unemployment and price instability on national income

5.4.5. Courseware of the module: Author Samuelson and Nordhaus Dornbusch, Fischer and Startz

Text book Economics Macroeconomics

Chapter Reference Ch. 23, 31 Chap 5-8, 16

5.4.5. Evaluation for the module MCQ I Marks 5 Marks Topic No and/ or specification Module 4

5.5 Module 5
Module name Sessions Weightage International Trade and open economy macroeconomics 16, 17 &18 15%

5.5.1 Learning objective Enable students to acquire knowledge on The concepts of International trade, BOP, Foreign Trade Policy analog. Exchange rate policies and Foreign Exchange determination in India. 5.5.2 Pre requisite General reading on articles related to LPG and international trade. 5.5.3. Pedagogy / Structure of lessons A combination of lectures and discussions on based on literature/article of current relevance to the topic Discussion on new developments in international trade, Indias Foreign Trade Policy etc. Analysis of the performance of Indian economy in the pre - post liberalization period using the real data. Bring into light the website of DGFT and DGCI&S in connection with foreign trade policy and data on foreign trade. Article discussion:

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Relevant articles from business magazines/newspapers 5.5.4 Learning Outcome Students will able to identify the importance of international trade and Balance of payment and terms of trade Students will get a fair understanding on foreign exchange determination

5.5.5. Courseware of the module: Author Misra and Puri Samuelson and Nordhaus Francis Cherunilam Paul R Krugman& Maurice Dutt and Sundaram

5.1.4 5.1.5 5.1.6

Text book Economic Environment of Business Economics Business Environment International Economics: 5.1.7 Theory & Policy 5.1.8 Indian Economy 5.1.9

Chapter Reference Unit 6-8 Ch 29 Chap 9, 29 and 30 Chap 8 and 9 Ch 15-16;Ch 49-50

5.5.6. Evaluation for the module Class test Marks 10 Topic No and/ or specification Module 5

5.6 Module 6
Module name Sessions Weightage Economic and Social Environment 19 -24 20%

5.6.1 Learning objective Enable students to Differentiate growth and development Examine the impact of economic environment on the development of the country Analyze the changes in socio-economic environment of Indian economy over the past decades 5.6.2 Pre requisite General reading on social indicators of development. 5.6.3. Pedagogy / Structure of lessons A combination of lectures and discussions on any relevant and current articles.

Article Discussion:
Relevant articles from business magazines/newspapers 5.6.4 Learning Outcome Students would be able to 9

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Differentiate economic growth and economic development Comprehend the role of macroeconomic policies on economic growth. Assess the importance of economic growth in achieving social development of the country.

5.6.5. Courseware of the module: Author Text book A. Nag Macroeconomics for Management Students Samuelson and Nordhaus Economics S. K. Misra and V. K. Puri Economic Environment of Business Francis Cherunilam Business Environment Dutt and Sundaram Indian Economy

Chapter Reference Ch. 10 Ch 28, 31, 32 Unit 4-8 Ch. 34 Chap: 15-16

5.6.5. Evaluation for the module Case Analysis / Assignment II Marks 10 Marks Topic No and/ or specification Module 6

6. The internal assessment The internal assessment shall be based on the following Evaluation Criteria Maximum Marks Criteria Pre-Mid term Post -mid Term Assignments 10 10 Tests 10 10 MCQ 5 5 Mid Term Exam Total 7. Milestones / Important Dates Sl. Assignment / Class Test / Project/ No. Presentation etc. Assignment I 1 2 3 4 5 6 7 8 MCQ I Class Test I Mid Term Exam MCQ II Class test II Case Analysis Assignment II End Term Exam

Total 20 20 10 20 70

Marks 10 10 5 20 5 10 10 30

Tentative Date/ SESSION Module 1 Module 2 Module 3 Module 1-3 Module 4 Module 5 Module 6 Module 1-6

Special information on the course Ten teams will be formed for the group assignment and they will remain as team till the end of the trimester. The assignment topics will be related to the Modules 1 & 5 referencing to current data in Indian context. 10

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Students are expected to maintain a news file for Economic News especially and discussion on the same news will be asked for in the class any day.

Group Assignment Guidelines: a) All members of the group will be given the same mark for the report. b) Students should provide detailed steps of all the calculations made in the report. c) The length of the report should not exceed 10 pages except for data appendix. d) Students should attach all the data used for the analysis, with the data sources clearly indicated. e) Websites used as resources should be clearly referenced. Evaluation Criteria: Criteria a) Demonstrates a full understanding and correct use of the concepts and/or strategies b) Content and quality of analysis - findings and interpretations of the topic c) Paper presentation style and structure, list of sources referred d) Use of additional / current data for the analysis

Marks 3 3 2 2

8. Session Plan Module Sessions 1 1 Topics Overview of macro-economics, Concepts of stock and flow, Capital Stock and Capital Formation, Ex post and Ex ante analysis Alternative economic systems, Production possibility frontier, Circular flow of income Measuring Economic growth, Measurements of macro-economic aggregates Measurement of national income/output Monetary policy and the role of banking system, Components of money stock and money multiplier Fiscal policy and instruments, Budgets Revenue and capital account, Budget deficit, Revenue deficit, Fiscal deficit, Primary deficit Reference Ch 1 Nag, Ch 4 MC Vaish Pedagogy/ activities/

Ch 1 Nag, Ch 4 MC Vaish Ch 1 Samuelson and Nordhaus Ch 2 Nag Ch 1-2 Rangarajan & Dholakia Ch. 9 Nag Ch. 40 & 42 Vaish

Lecture/Discussion Assignment - 1

4 2 5 6 7

Lecture/Discussion CH 7 Rangarajan and Dholakia MCQ - I

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3 8 9 Income, Consumption and investment Income determination with consumption, saving and investmentThe multiplier model Foundations of Aggregate demand - AD Foundations of Aggregate Supply AS General equilibrium - AD and AS curves Measurement of Unemployment and Inflation Economic Growth, Unemployment and Inflation Business cycles - Policies for economic growth and stability International trade and its significance Balance of Payment, Balance of trade and Terms of trade Foreign Exchange regimes Economic growth Vs Development; long term development of Indian economy Underdevelopment, Vicious cycle of poverty, Strategies of economic development Business environment in the Indian context, LPG, New Economic Policies of India Indian Financial System, Financial sector reforms Foreign Trade Policy, Trade liberalization India and the world economy Ch. 8 Nag Ch 14-16, 23 M. C. Vaish Ch 5-8 Dornbusch, Fischer and Startz

10 11 12 4 13 14 15 16 5 17 18 6 19

Lecture/Discussion

Ch 22-24 Samuelson Class test - I and Nordhaus

Ch. 23, 31, 32 Samuelson and Nordhaus Ch 16 Dornbusch, Fischer &Startz Ch. 29, 30 Samuelson and Nordhaus Ch 14Nag Ch 29 30 Francis Cherunilam

Lecture/Discussion MCQ - II Lecture/Discussion Case Analysis Class test - II

Ch 28 Samuelson Ch 10 Nag, Ch 34 Francis Cherunilam Ch 15 Dutt and Sundaram Lecture/Discussion Assignment II Case Analysis

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22 23 24

9. Mid Term Examination Coverage and QP pattern Mid Term examination will be of 120 minutes and the coverage and pattern are given below: Coverage: Modules 1 3; Total: 30 Marks Section A Five Questions on Basic Concepts

5 * 1 = 5 Marks 12

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Section B Section C Five Short Answer Questions of three marks each One Essay Question 5 * 3 = 15 Marks 1 * 10 = 10 Marks

10. End Term Examination Coverage and QP pattern The end term examination shall be for 3 hours and shall cover all the topics that are envisaged in this plan and the pattern will be as follows: Coverage: Modules 1 6; Total: 60 Marks Section A Section B Section C Five Questions on Basic Concepts Five Short Answer Questions Two Essay Questions One question on topical issues 5 * 3 = 15 Marks 5 * 5 = 25 Marks 2 * 8= 16 Marks 4 Marks

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