Economics – II SYBMS (Managerial Economics), SYBFM SYBBI (Macroeconomics) Semester IV Manan Prakashan

Economics SYBMS – II
S.Y.B.M.S. : Managerial Economics – II
S.Y.B.F.M., S.Y.B.B.I. : Macroeconomics
Semester IV Manan Prakashan

Content:
1. Introduction to Macroeconomic Data and Theory (15 Lec.)
l Macroeconomics : Meaning, Scope and Importance
l Circular Flow of Aggregate Income and Expenditure : Closed and Open Economy Models
l The Measurement of National Product : Meaning and Importance – Conventional and Green GNP and NNP Concepts – Relationship Between National Income and Economic Welfare
l Short run Economic Fluctuations : Features and Phases of Trade Cycles
l The Keynesian Principle of Effective Demand : Aggregate Demand and Aggregate Supply – Consumption Function – Investment Function – Effects of Investment Multiplier on Changes in Income and Output

2. Money, Inflation and Monetary Policy (15 Lec.)
l Money Supply : Determinants of Money Supply – Factor influencing Velocity of Circulation of Money
l Demand For Money : Classical and Keynesian Approaches and Keynes’ Liquidity Preference Theory of Interest
l Money and Prices : Quantity Theory of Money – Fisher’s Equation of Exchange – Cambridge Cash Balance Approach
l Inflation : Demand Pull Inflation and Cost Push Inflation – Effects of Inflation – Nature of Inflation in a Developing Economy
l Monetary Policy : Meaning, Objectives and Instruments, Inflation Targeting

3. Constituents of Fiscal Policy (15 Lec.)
l Role of Government to provide Public Goods – Principles of Sound and Functional Finance
l Fiscal Policy : Meaning, Objectives – Contra Cyclical Fiscal Policy and Discretionary Fiscal Policy
l Instruments of Fiscal Policy : Canons of Taxation – Factors Influencing Incidence of Taxation – Effects of Taxation – Significance of Public Expenditure – Social Security Contributions – Low Income Support and Social Insurance Programmes – Public Debt – Types, Public Debt and Fiscal Solvency, Burden of Debt Finance
l Union Budget : Structure – Deficit Concepts – Fiscal Responsibility and Budget Management Act

4. Open Economy : Theory and Issues of International Trade (15 Lec.)
l The Basis of International Trade : Ricardo’s Theory of Comparative Cost Advantage – The Hecksher-Ohlin Theory of Factor Endowments – Terms of Trade – Meaning and Types – Factors Determining Terms of Trade – Gains from Trade – Free Trade versus Protection
l Foreign Investment : Foreign Portfolio Investment – Benefits of Portfolio Capital Flows – Foreign Direct Investment – Merits of Foreign Direct Investment – Role of Multinational Corporations
l Balance of Payments : Structure – Types of Disequilibrium – Measures to Correct Disequilibrium in BOP
l Foreign Exchange and Foreign Exchange Market : Spot and Forward Rate of Exchange – Hedging, Speculation and Arbitrage – Fixed and Flexible Exchange Rates – Managed Flexibility