Macroeconomics: Meaning, nature and scope. Basic concepts used: Stock and flow variables, partial and
general equilibrium, static and dynamic analysis. Circular flow of income and expenditure. National income:
Concepts, measurement , difficulties and importance
Unit-II (12 Hrs.)
Theory of Income and employment: Classical theory of output and employment, Say‟s law of markets.
Keynsian theory of income determination. Consumption Function: Meaning, determinants and importance.
Theory of consumption: Absolute income hypothesis, Relative income hypothesis, Permanent income
hypothesis, life Cycle Hypothesis.
Unit-III (12 Hrs.)
Theory of Investment: Types of investment, determinants of investment, marginal efficiency of capital, net
present value, internal rate of return, Interest rate determination: Classical, Neo-classical and Keynesian
theories. Theory of Multiplier: Static and dynamic multiplier, tax multiplier, foreign trade multiplier, balanced
budget multiplier, leakages from multiplier,Importance and limitations
Unit-IV (12 Hrs.)
Inflation: Meaning, types, and theories. Stabilization policies: Monetary and fiscal policies. Money: Its
function and role: Quantity theory of money, Fisher and Cambridge equations. Keynes views about money and
prices.