Macro Economics

                                                                    Syllabus

Paper III: MACRO ECONOMICS

Unit- I            

Concept and scope of Macro-Economics; Macro-Economic Paradoxes: Wage-Employment Paradox and Paradox of Thrift, The Circular Flow of Income and Expenditure.  The Analysis and Measurement of Economic Activity - National Income Accounting: Concept and Definitions of National Income. Various Components of National Income, Methods of Measurement of National Income and Welfare.

Unit – II           

Classical Macroeconomic Models – Say’s Law, Quantity Theory of Money, Wage-Price Flexibility and Full employment.  Aggregate Expenditure – Consumption Function: Concepts of Propensities of Consumption and Saving. Absolute Income Hypothesis, Relative Income Hypothesis; Consumption Puzzle and Permanent Consumption Hypothesis. Investment Function: Types, Marginal Efficiency of Capital (MEC) and Marginal Efficiency of Investment (MEI).

Unit –III           

The Concept of Multiplier; National Income Determination in an Open Economy  IS-LM Analysis - Derivation of IS and LM Functions; Joint determination of National Income and rate of Interest and Shift and IS and LM Curves.

Unit-IV           

Theory of Inflation – Meaning, types and measurement, Demand Pull and Cost Push Inflation. The Philips Curve, Effects of Inflation, Anti-Inflation Policies – Monetary and Fiscal Policies.  Business Cycles – concept, types and phases; Keynes, Hawtrey, Hicks Models.