MICRO & MACRO ECONOMICS
Executive One-Year Diploma (Part-time) Programme Academic Year 2014-15 Term-I
PART – B MACRO ECONOMICS
With the basic understanding of the theories of firms (that deal with the issues operational within the firms), this course is designed to make a systematic coverage of fundamental concepts and relationships that exist among various macro-economic entities. This course provides a basic understanding of the theories and principles relating to the macro-economic environment (those issues, which operate outside the firms). The course focuses primarily on how an economy functions, the reasons for macro-economic fluctuations and the corrective and regulatory measures from various spheres such as monetary, fiscal and international arena.
II. Course Objectives:
Ø To enable the participants to develop a familiarity with the fundamentals of macro-economic principles; understand the complexities and implications of macro-economic fluctuations; relate such changes to changes in the business environment and imbibe the ability to grasp and analyse the policy implications. Ø It is intended that the participants would receive a complete and rigorous introduction to basic principles of macro economics. Ø To provide certain practical insights and demonstrate that application of macro-economic theories can enhance the decision-making skills of the executives.
III. Course Contents:
ü Resources of an economy
ü Two-sector model of circular flow of economic activities
ü Approaches to estimating GNP/GDP
ü Related indicators
ü Deflating for inflation
ü Is GNP a measure of society’s well being?
ü Say’s law of markets ü Full employment equilibrium ü Critical appraisal of the model ü Effective demand ü Consumption function ü Investment function ü Multiplier and accelerator ü Determination of rate of interest
Suggested Readings:
ü Phases of business cycles ü Business cycle theories ü Case analysis of various phases of business cycles Suggested Readings:
ü Inflation: Measures ü Inflation: Causes, Consequences and Cures ü Unemployment: Types and methods of measurement ü Unemployment or Inflation – the Phillip’s Curve ü Unemployment and Inflation – The Supply Shock ü Case analysis on the twin traps Suggested Readings:
ü Money: Definition, evolution, functions and composition ü Principles behind the issue of paper currency ü Functions of commercial banks ü Role of central bank ü Measures of credit control Suggested Readings:
ü Economic scope and functions of governments ü Social goods and redressal of spill-over effects ü Fiscal policy: their efficacy and implications ü Sources of revenue: where does the money come from? ü Public expenditure: where does the money go? ü Taxation and shifting and incidence ü Budget at a glance: learn to read in between lines ü Fiscal deficits and its policy implications Suggested Readings:
ü Theories of absolute and comparative advantage ü Balance of Payments in a double entry book-keeping sense ü Measures to check imbalances in Balance of Payments ü Tariff and non-tariff barriers - their purpose and implications ü A case on voluntary export restraint
A compilation of reading materials is being provided for basic reference for Part – B. In addition, it is necessary that it has to be supplemented by any of the text books, which will be announced in the class. Besides the text books, reading the business related articles, reports and so on, published in periodicals, journals, news magazines and websites, is a key requirement for the course.
In addition, cases, articles, questions for discussion and practice, etc., will be provided in the course web. You are encouraged to participate actively in the Discussion Forum for the course in the AIS.
V. Evaluation: (50% for Part – B)
VI Submission of Assignment and Term-paper:
The term paper pertaining to Part -B of the course will be written on a topic allotted to each participant from among a list of topics that will be displayed in the course web, sometime during the middle of the course. Along with the topics, a check-list of guidelines for the preparation of the term paper and the deadline for submission will be announced. The Submission deadlines for the term paper (hard copy only): For the final selection of a topic: Friday, 25th July 2014 For the submission (receipt) of term paper: Friday, 19th September 2014 Permissible grace period allowed for submission (receipt): Friday, 26th September 2014 Submissions reaching beyond 26th September 2014 will NOT be accepted Hard copy of the term paper should be sent to the following address: