Introductory Macroeconomics

Paper Code: 
ECO 211
Contact Hours: 

This course aims to introduce the students to the basic concepts of Macroeconomics. Macroeconomics deals with the aggregate economy. This course discusses the preliminary concepts associated with the determination and measurement of aggregate macroeconomic variable like savings, investment, GDP, money, inflation, and the balance of payments.

Unit I: 
Introduction to Macroeconomics and National Income Accounting

Basic issues studied in macroeconomics; measurement of gross domestic product; income, expenditure and the circular flow; real versus nominal GDP; price indices; national income accounting for an open economy; balance of payments: current and capital accounts.

Unit II: 

Functions of money; quantity theory of money; determination of money supply and demand; credit creation; tools of monetary policy; Inflation and its social costs; hyperinflation.

Unit III: 
The Closed Economy in the Short Run-I

Classical system: Simple classical model of output determination.

Unit IV: 
The Closed Economy in the Short Run-II

Keynesian system: simple Keynesian model of income determination;

Unit V: 
The Closed Economy in the Short Run-III

IS-LM model; fiscal and monetary multipliers.

Essential Readings: 

1. Dornbusch, Fischer and Startz, Macroeconomics, McGraw Hill, 11th edition, 2010.
2. N. Gregory Mankiw. Macroeconomics, Worth Publishers, 7th edition, 2010.
3. Richard T. Froyen, Macroeconomics, Pearson Education Asia, 2nd edition, 2005.
4. Karl E. Case and Ray C. Fair, Principles of Economics, Pearson Education Inc., 8th Edition, 2007.







Academic Session: