Subject Outline

Ascent MBA - Semester II

Subject Name Macroeconomics for Business
Subject Code MGT - 3023
Subject Credits 3
In today's dynamic environment, the macroeconomic scenario directly
influences the sustainability of business. The effective business
decision-making requires timely and efficient use of information and
response to the changes in the macro-environment. The purpose of this
Summary/Overview course is to provide students with a basic understanding of the
macroeconomic theories and analytical tools that can be used in
decision-making problems. After completing the course, students will
have a good understanding of concepts and tools that have direct
business applications.
This course is designed to provide students with a structured and
Analytically sound understanding of how any economy functions.
Attention is given to understanding measures of economic
performance, such as, productivity, economic growth, price stability,
Aims unemployment rates, interest rates, government budget and
international trade, and the information such measures convey.
Prominent attention is given to how government (fiscal) policy and
central bank (monetary) policy independently affect growth,
unemployment, interest rates, and inflation rates in any country.

Core Learning Outcomes

Learning Outcomes Assessment Criteria

On completion of this unit you To achieve the learning outcome you must
should be able to: demonstrate the ability to:

Apply the analytical concepts and

models to assist in gaining insights For each presentation topic, case study, and in
1. into functioning of economy as a the examinations, identify various
whole, and to get acquainted with macroeconomic indicators and using the same
policy instruments for to assess the functioning of an economy
macroeconomics
 Recognize the different phases of In the economic news analysis, presentations,
2. business cycles to evolve and examinations, evaluate the impact of
appropriate business strategies in various macroeconomic policy decisions on
response to policy measures the business environment

Assess the role of central and In the presentation and examinations,

3. banking sector in the financial recognize the role of central bank, commercial
sector bank and public in the financial market
 In the economic news analysis, presentations,
Evaluate the trade-off between and examinations, critically evaluate the trade-
4. inflation and the unemployment off between inflation and unemployment and
and its implications on business its impact on investment decisions and
economic growth

Evaluate global economic In the case study, critically analyze the phases
5. phenomenon and assess business of business cycles that world economy and
strategies appropriate to changing major countries are passing through and
global conditions evaluate possible business strategies

The teaching methods will consist of formal lectures, case

study analysis, presentations and group discussions. Students
will work at their own to identify and assess the current market
happenings, and then relate to the theories of macroeconomics.
Over the whole span of the term students will gather secondary
information to assess macroeconomic policies undertaken by
Approach to Learning different governments, using the tools and frameworks taught
in the class.
As is appropriate at Masters’ level, students will also be
expected to read beyond textbook assigned, and to identify on
their own further sources of information for complementing
their studies.

Lectures will include presentation of key theories and concepts.

Presentations will be student-driven offering the opportunity
for further discussion and clarification of topics that are of
special importance and difficulty. Presentations will be based
on lecture related questions, and students are encouraged to
participate. Another key objective of the presentations is to
develop students’ communication and presentation skills. The
structure of the in-class test will cover the issues discussed in
Assessment Strategy
the lecture and presentations. Therefore, students need to show
a high degree of dedication and commitment in order to get the
maximum benefit from the discussions. Formative feedback
will be offered after the class test to prepare students for the
final examination. The final exam will include essay-style
questions where students need to certify their ability to explain
macroeconomic problems using the right models and
terminology.

Description of Learning Submission

Assessment Weight
No Assessment Outcomes Assessed day/week
Method* Method % (assignments
1 2 3 4 5
) or length
 (exam)

50 mark
1 DSA Written examination 20 ✓ ✓ ✓
(2 hours.)
2 AT Class attendance 5
Case study /
Assignments,
Presentation on
CS / PR / Throughout
3 various topics, Viva- 25 ✓ ✓ ✓ ✓ ✓
OR / CP the course**
voce /Quiz,
Participation in class
activities
Semester Written 100 marks
4 50 ✓ ✓ ✓ ✓ ✓
End Examination (3 hours)

*The following codes for assessment methods apply:-

CS Case study PR Presentation

CP Class Participation OR Oral

DSA During Semester Test AT Attendance

** Instructor will decide and advise students of the exact method used for continuous
assessment.

Outline Teaching Schedule

Sl. No. of
Module Chapter Name Contents
No. Sessions
What macroeconomics is about?
Goals of macroeconomic policies;
Introduction to What macroeconomists do? –
macroeconomics Forecasting, analysis and research;
1. Introduction Why macroeconomists disagree? – 2
Classical vs. Keynesians and a
Unified approach to
macroeconomics – Drivers of
Economic Growth
Outline Teaching Schedule
Sl. No. of
Module Chapter Name Contents
No. Sessions
Definition of National Income;
Concepts of national income;
Measurement and Measuring National Income –
National Income Structure of the Product, income and expenditure
2 method; Circular flow of income; 4
Accounting National Economy
Price Indices and Deflators;
Limitations of national income
accounting; Usefulness of national
income analysis for business
National Income Aggregate Supply
AD Curve; AS Curve-Classical vs.
Determination in and Aggregate
3 Keynesian Approach to AS; 3
Keynesian Demand
Equilibrium.
Framework
Consumption and Savings – MPC
Consumption,
and MPS, Investment – Multiplier;
Goods Market Saving and
Government expenditure; Goods 3
4 Equilibrium – IS Investment
Market Equilibrium – Autonomous
curve
spending and expansionary policies;
Deriving IS curve
Money – meaning and functions;
Demand for Money - Transaction,
Precautionary and Speculative;
The Asset Market,
Money Market Quantity Theory of Money; Money
Money and Prices 4
5 Equilibrium – market equilibrium – Deriving LM
LM curve curve;
Simultaneous equilibrium in goods
and money market – deriving AD
curve
Business cycle : Phases of business
cycle; Theories of business cycle;
Business Cycles
Indicators of business cycles; 2
6 Business Cycles
Policy response – macroeconomic
stabilization; Business strategies
during business cycles.
Monetary policy : Objectives of
monetary policy; Money supply and
Macroeconomic Money multiplier – Commercial
Monetary Policy 3
7 Policies – banks and credit creation; Central
Monetary policy Bank and monetary controls ––
Instruments of monetary policy;
Implications of monetary policies
Outline Teaching Schedule
Sl. No. of
Module Chapter Name Contents
No. Sessions
on business
Fiscal Policy: Objectives and tools
of fiscal policy; Laffer Curve;
Government
Macroeconomic Budget and its components – Fiscal
Spending and its
8 Policies – Fiscal deficit and Crowding in/out; 3
financing
policy Implications of fiscal policy on
business ; Union Budget at a
Glance
Unemployment: Types of
unemployment; Theories of
unemployment; Evils of
unemployment; Okun’s Law;
Unemployment and Policy response
9 Unemployment 3
Inflation What inflation is; Types of
and Inflation
inflation; Theories of inflation -
Demand-Pull vs Cost-Push
Inflation; Effects of inflation;
Policies to control inflation; Phillips
curve

Recommended Resources

Recommended Textbook:
• Macroeconomics (7th ed.) by Andrew B ABEL, Ben S. BERNANKE and Dean
CROUSHORE (ABC), Pearson Publisher.

Reference Books:
Macroeconomics (9th ed.) by Dornbusch, Fisher and Startz
Macroeconomic Policy Environment by Shyamal Roy
MacroECON, by William A MacEachern and A. Indira, Cengage Learning
Macroeconomics (19th ed.) by Samuelson, P. A., W. D. Nordhaus and Sudip Chaudhuri
5. Melvin and Boyes: “Principles of Macroeconomics”, Cengage.
6. N. G. Mankiw: “Macroeconomics”, Worth.
7. Froyen: “Macroeconomics”, Pearson.
8. Kennedy: “Macroeconomic Theory”, Pearson Prentice Hall.
9. Blanchard: “Macroeconomics”, Pearson.
10. Shyamal Roy: “Macroeconomic Policy Environment”, Tata McGraw Hill.

Other books you may want to consider are:

• Sameer Kochhar (2011) Growth & Finance: Essays in Honour of C. Rangarajan,
Academic Foundation.
• I. G. Patel (2002) Glimpse of Indian Economic Policy, Oxford University Press.
• Economic Survey 2011-12, Government of India.
• B. A. Prakash (2009) The Indian Economy Since 1991: Economic Reforms and
Performance, Pearson Education.
• S. Kohli and A. Sood (2010) India 2039: An Affluent Society in One Generation, Sage
Publications.
• S. Acharya and R. Mohan (2010) India’s Economy: Performance and Challenges Essays
in Honour of Montek Singh Ahluwalia, Oxford University Press.

Recommended Journals:
• Economist
• Economic and Political Weekly

Useful research resources on internet:

• http://www.rbi.org.in
• http://www.worldbank.org/
• http://search.ebscohost.com/
• http://www.emeraldinsight.com

Database websites:
• http://www.capitaline.com/user/framepage.asp?id=1
• http://www.indiastat.com/default.aspx
• https://www.cia.gov/library/index.html

Other websites you may want to consider are:

• http://www.economist.com
• http://www.icrier.org/
• http://www.ncaer.org/