Intermediate Macroeconomics-I

Paper Code: 
ECO 312
Credits: 
3
Contact Hours: 
45.00
Max. Marks: 
100.00
Objective: 

1.      To comprehend the process of determination of income and employment in the Classical and Keynesian model

2.      To discuss the various consumption hypotheses like Absolute income hypothesis, relative income hypothesis, life-cycle hypothesis and permanent income hypothesis

3.      To analyze the IS LM Model and its policy implications

9.00
Unit I: 
Classical Model

Say’s law, Simple classical model of output determination, effect of changes, Keynes’ critique of the classical model.

9.00
Unit II: 
Keynesian Model

Simple Keynesian model of employment and income determination.

Working of investment multiplier; concepts of tax multiplier, government expenditure multiplier and balanced budget multiplier.

9.00
Unit III: 
Consumption and Investment

Absolute income hypothesis, relative income hypothesis, life-cycle hypothesisand permanent income hypothesis.Investment –Components and determinants; Acceleration Principle.

9.00
Unit IV: 
IS-LM Model

Goods market and IS curve, Money market and LM curve- graphic and algebraic derivation, Simultaneous equilibrium in the goods and money market.

9.00
Unit V: 
Policy Effects in the IS-LM Model

Factors affecting equilibrium income and interest rate, relative effectiveness of monetary and fiscal policy.

Essential Readings: 

1.      Froyen, R. T., Macroeconomics- Theories and Policies Pearson Education, 10th   Edition, 2018.

2.      Ahuja, H.L., Macroeconomics: Theory and Policy S. Chand., 20th Edition, 2019.

References: 

1. Case K. E., Ray C. F. et al.,  Principles of Economics Pearson Education Inc., 12th Edition, 2017.

2. Dornbusch, R. et al. Macroeconomics McGraw Hill, 12th Edition, 2018.

3. Mankiw, N. G.,Macroeconomics, Worth Publishers, 10th Edition, 2019.

4. Branson, W. H. Macroeconomics: Theory and Policy, East West Book Pvt Ltd., 3rd Edition, 2005.

Academic Session: 
2022-23
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