Macroeconomics

Course Code: BBA 222

Credit Hour: 3

Course Group: Core Courses

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Introduction: Fundamental Concept of Macroeconomics - Definition of Macroeconomics - Difference between Microeconomics and Macroeconomics-Instruments of Macroeconomics: i) Monetary Policy ii) Fiscal Policy - Meaning of Economics Models- Business Cycle-Aggregate Demand and Aggregate Supply.

An Overview of Economic System: Primitive Communal System-Slavery System-Feudal System-Capitalism/Open Market Economy-Socialism-Communism-Mixed Economy.

National Income: Various Concepts of National Income: Gross National Product (GNP), Gross Domestic Product (GDP), Net National Income (NNP)-Methods of National Income Counting: The Expenditure Approach, The Income Approach, The Output Approach-Real Vs. Nominal Income-GDP Deflator-Limitations of GNP Counting.

Consumption Function: Concept of Consumption and Consumption Function-Definition of Autonomous Consumption and Induced Consumption-Average Propensity to Consume (APC)-Marginal Propensity to Consume (MPC) and its Definition-Short Run and Long Run Consumption Function and its Characteristics –Absolute Income Hypothesis of Consumption- Relative Income Hypothesis of Consumption.

Investment and Savings: Definition-Gross and Net Investment-Autonomous Investment and Induced InvestmentInventory-Capital-MEC and MEI-Savings: Definition of Savings and Savings Function-Average Propensity to Save (APS) - Marginal Propensity to Save (MPS)-Relationship Between Savings and Consumption, APC, APS, MPC and MPS.

Inflation: Definition-Causes of Inflation-Source of Inflationary Pressure- Consequences of Inflation-Control of Inflation-Deflationary.

Money and Monetary Policy: Meaning of Money-Functions of Money-Different Concepts of Money (M1, M2, M3)-Credit Creation of Bank-The Money Multiplier- Velocity of Money-Monetary Policy.

Fiscal Policy: Classical Fiscal Policy-Keynesian Fiscal Policy-Objective of Fiscal Policy-Role of Fiscal Policy in Economic Development-Relationship of Fiscal Policy to Monetary Policy.

Employment: The Labor Demand-Supply Schedule-Impact of Market Power on Employment and Prices-Philips Curve-Unemployment-Measuring Unemployment and Its Impacts on the Economy-Types of UnemploymentRemoving Unemployment.

Economic Development and Planning: Concept, Model, Problems, and Development Strategies-Economic Planning: Concept, Process, Types.

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Text Book:

H.L. Ahuza, Modern Economics, (Latest edition), S. Chand & Co. Ltd. New Delhi, India.

Reference Books:

Karl. E. Case, Ray C. Fair, Principles of Economics, Latest Edition N. Gregory Mankiw, Macroeconomics, (5/e), Worth Publishers, New York, 2005 K.K. Dewett, Modern Economic Theory, Shyam Lal Charitable Trust, New Delhi, India. Paul A. Samuelson & William D. Nordhaus, Economics, 18th Edition, Tata McGraw Hill Publishing Company ltd., 2005 Shaprio, Dornbusch and Fisher, Macroeconomic Theory.