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, Richard – 7ed - TMH
Macroeconomics IUP
Global Business Environment IUP
Macroeconomics, 10th e Dornbusch, Rudiger et al. Mcgraw Hill - 2008
nd
Macroeconomics, 2 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 Determinants of Investment, Government

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,
Detailed Syllabus – The Class of 2012
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
Second Semester
Economic Instability and Fluctuations: The South African Economy: Coping with
the Legacy of Apartheid
Business Cycles: Features of business cycle,
Business cycle theories (Source: Case Studies in Management
Volume IX)
Unemployment: Types of unemployment:
Okun’s 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 banking Suggested Schedule of Sessions
systems- Deposit creation, Balance sheet of a
central bank, Measures of monetary and No. of
Topic
liquidity aggregates, Money multiplier, Sessions
Instruments of money supply control,
Overview of Macroeconomics 1
Determination of money supply
Measuring National Income/output 4
Fiscal policy - Fiscal instruments, Tax
structure, Laffer curve, Types of deficits, Fiscal AD and AS curves – an introduction 1
policy and stabilization, Public debt, Crowding -
Aggregate Demand and multiplier 2
out effect.
Product market equilibrium 2
Open Economy Framework: International Vs.
domestic trade, Theories of International Trade, Money market equilibrium 2
Protectionism and WTO, Issues related to tariff,
Determination of Exchange Rate, Floating Aggregate supply 2
exchange rate, Fixed exchange rate, Balance of General equilibrium using AD and 1
Payments. Globalization and Global imbalance. AS curves
Business Environment in Indian context- Economic instability and fluctuations 1
Growth phases, Evolution of institutional – Business cycles
framework - emphasis on planning, public and
private sector, Recent policy measures- Unemployment and price instability 2
monetary fiscal, foreign trade and technology. Case on The Indian Economy: 1
Dealing with Inflation
Cases
Monetary policy and the role banking 3
Macroeconomics
system (including case discussion)
India: Before and After VAT
Fiscal policy and instruments 3
Should Energy be Subsidized? (including case discussion)
The Indian Economy: Dealing with Open economic framework 3
Inflation (including case discussion)
Softwood Lumber Dispute between Case on The US-China Exchange 1
Canada and the USA Rate Stand-Off
The US-China Exchange Rate Stand-Off Business environment in Indian 4
Business Environment context

Hungary’s Reform Process Total 33

Gazprom - Naftogaz Ukrainy Dispute:
Business or Politics?