Title

Macroeconomics

Course Code

IBM 203

Year

1^st

Semester

II

Credits

L

T

P

3

0

0

Course Type
Theory/Lab

Theory

NEP/non-NEP
All Bachelor Courses are NEP, and PG Courses is non-NEP

NEP

Course Category

Leave this Blank

Pre-requisite/s

Basic Understanding of Economics.

Co-requisites

Understanding of real-world economic events

Course Outcomes & Bloom's Level

BL2-Understand

CO 1

The students will be able to understand the national income aggregates and theories of output and employment.

BL2-Understand

CO 2

The students will develop an understanding about macroeconomic amplifiers, IS-LM Model and macroeconomic variables like inflation and business cycles.

BL4-Analyze

CO 3

Students will be able to analyze Policy Implications of various macroeconomic variables and models.

Course Elements

Skill Development

YES

Gender

Entrepreneurship

Human Values

Employability

Environment

Professional Ethics

Sustainable Development Goals

SDG 1: No poverty

Yes

SDG 7: Affordable and clean energy

SDG 13: Climate action

SDG 2: Zero hunger

SDG 8: Decent work and economic growth

SDG 14: Life below water

SDG 3: Good health and well-being

SDG 9: Industry, innovation, and infrastructure

Yes

SDG 15: Life on land

SDG 4: Quality education

SDG 10: Reduced inequalities

Yes

SDG 16: Peace, justice, and strong institutions

YES

SDG 5: Gender equality

SDG 11: Sustainable cities and comodulates

SDG 17: Partnerships for the goals

SDG 6: Clean water and sanitation

SDG 12: Responsible consumption and production

Modules

Content

Pedagogy

Lecture/ Case Study/ Experiential Learning/ Simulation/ Problem-Based Learning (PBL)/ Seminar/ Role-Playing

Hours

Credit- 3 (9 hrs)

Credit 4 (12 hrs)

Practical Credit 1 (30 Hrs)

Module- I

Introduction to Macroeconomics and National Income

• Macroeconomic Overview: Difference between Microeconomics and Macroeconomics; Importance of Macroeconomics for Business.
• National Income Concepts: GDP, GNP, NNP, Personal Income, Disposable Income.
• Measurement of National Income: Product, Income, and Expenditure Methods; Challenges in National Income measurements
• Circular Flow of Income: Two-sector, Three-sector, and Four-sector Models.

Lecture: For explaining fundamental concepts like GDP, GNP, and National Income measurement methods.

Hand on Practice for national Income Numerical

9

Module- II

 Theories of Output and Employment

• Classical Theory: Say’s Law of Markets; Full Employment Equilibrium.
• Keynesian Theory: Aggregate Demand and Aggregate Supply; Effective Demand; Equilibrium Output and Employment.
• Consumption Function: Keynes' Psychological Law of Consumption; APC, MPC, and Factors Influencing Consumption.
• Investment Function: Determinants of Investment; Marginal Efficiency of Capital; Role of Expectations.

Lecture: To build foundational knowledge on Classical and Keynesian theories.

Group Discussion: The 1930s Great Depression

9

Module- III

Economic Multipliers and IS-LM Model

• Multiplier Effect: Concept and Importance; Static vs. Dynamic Multiplier; Limitations.
• Accelerator Principle: Interaction of Multiplier and Accelerator
• IS-LM Model: Derivation of IS and LM Curves. Equilibrium in Goods and Money Market

Lecture: Explain theoretical derivations and mechanics of Multiplier, Accelerator, and IS-LM Model.

Hands on Problem Solving: Problems to calculate and interpret the Multiplier Effect and its interaction with the Accelerator.

9

Module- IV

Money, Inflation, and Business Cycles

• Demand for Money: Classical, Keynesian, and Friedman’s Theories.
• Supply of Money: Components of Money Supply; Measures of Money, Credit Creation by Commercial Banks.
• Inflation: Types, Causes, and Consequences.
• Phillips Curve Analysis: Short-run and Long-run Trade-offs Between Inflation and Unemployment.
• Business Cycles: Phases, Causes, and Impacts on Business Decisions.

 Lecture: To explain theories of demand and supply for money and inflation.

 Case Study:

1.      Hyperinflation in Argentina (1989–1990): Causes and Effect

2.      The 2008 Global Financial Crisis and Its Business Cycle Dynamics

9

Module- V

Macroeconomic Policies

• Monetary Policy: Tools (CRR, SLR, repo rate Reverse Repo rate, LAF, open market operations, Marginal Standing Facility, and qualitative techniques), Objectives, and Effectiveness; Central Bank’s Role.
• Fiscal Policy: Instruments (Public Expenditure, Taxation, Public borrowing, others), Objectives, and Challenges.
• Policy Implications: Effectiveness of Monetary and Fiscal Policies in the IS-LM Framework.
• Rational Expectations Hypothesis: Key Assumptions; meanings and criticism, Implications on Policy Effectiveness.

Lecture: Cover technical details of monetary and fiscal policies and the Rational Expectations Hypothesis.

Demonstration and discussion on monetary policy committee proceedings.

9

Theory

Total Marks

Minimum Passing Marks

External Evaluation

Min External Evaluation

Internal Evaluation

Min. Internal Evaluation

100

40

60

18

40

12

Practical

Total Marks

Minimum Passing Marks

External Evaluation

Min. External Evaluation

Internal Evaluation

Min. Internal Evaluation

Books

·       Froyen, R. T. (2013). Macroeconomics: Theories and Policies (10th ed.). Pearson.

·       Mankiw, N. G. (2020). Macroeconomics (10th ed.). Worth Publishers.

·       Dornbusch, R., Fischer, S., & Startz, R. (2018). Macroeconomics (13th ed.). McGraw-Hill Education.

Reference Books

·       Blanchard, O. (2021). Macroeconomics (8th ed.). Pearson.

·       Ahuja, H. L. (2022). Macroeconomics: Theory and Policy (23rd ed.). S. Chand Publishing.

·       Samuelson, P. A., & Nordhaus, W. D. (2020). Economics (20th ed.). McGraw-Hill Education.

MOOC Courses

·       Introductory Macroeconomics
Offered by Swayam, this course covers topics such as national income concepts, measurement methods, and macroeconomic theories, including Classical and Keynesian approaches. Swayam

·       Fundamentals of Macroeconomics
Available on My Mooc, this course offers a thorough view of macroeconomic principles, including market strengths and failures, which can help in understanding economic health. My Moo

·       Macroeconomics (Advanced Level)
Offered by HSE University, this course focuses on selected topics central to modern macroeconomics, such as short-run economic fluctuations and fiscal and monetary policies. HS

·       Intermediate Macroeconomics
This undergraduate course by Pascal Michaillat covers the IS-LM model of business cycles, unemployment models, inflation, and economic growth, providing a deeper understanding of macroeconomic concepts.  Pascal Michaillat

COs

PO1

PO2

PO3

PO4

PO5

PO6

PO7

PO8

PO9

PO10

PSO1

PSO2

PSO3

CO1

3

2

3

1

2

1

1

1

2

2

2

1

2

CO2

3

3

3

2

2

2

1

1

2

2

3

2

2

CO3

3

3

3

1

2

1

1

2

3

2

3

2

2