SVKM’s NMIMS ASMSOC – Course Outline

Course Code
Course Title Macroeconomics
Course Dr. Mona Bhalla
Instructor/s Dr. Boishampayan Chatterjee
Dr. Charu Bhurat
Dr. Khushboo Verma

Course Credit 4
Program and F.Y.B.Com. (Hons.) Semester - II
Semester
Pre-Requisite No prerequisite for the course.
Learning The course aims at providing the student with knowledge of basic concepts
Objectives of the macro economics. The modern tools of macro-economic analysis are
discussed and the policy framework is elaborated, including the open
economy. This Module has been designed to explain the subject matter in
a manner that is easy to understand and also provide a treatment of
economic theory that is relevant to the real world. This is accomplished by
including real world examples and case studies along with the study of
economic models.

Learning Students will learn:

Outcomes  How different sectors interact in macro economy.
 How national income is calculated.
 Concept of the multiplier effect in an economy.
 Analysis of the money market.
 Role of fiscal and monetary policy in macro economy.
 Causes and impact of inflation and policies to control it.
 Balance of payments, impact of capital flows in an open economy
and role of economic policies in an open economy.
Course This course provides an overview of macroeconomic issues: the
Description determination of output, employment, unemployment, interest rates, and
inflation. The important elements of the course include measurement of
macroeconomic variables and theories to explain the behaviour of
macroeconomic variables, the use of empirical evidence in evaluating
different models, and the role of government policy in seeking to influence
macroeconomic outcomes. The course will provide students with a
framework for understanding the workings of the whole economy and the
various interactions among households, business and governments.
Evaluation Specific % AOL Intended CLOs to
Pattern Assessment Weightage Instruments be Assessed
Methods /
Task
C C C C C
L L L L L
O O O O O
1 2 3 4 5
Written Test 20% Test   
 Quiz 20% Quiz   
Project 10% Project   
Report/Pres
entation
Term End 50%
Examination
Course Session Plan

Session Topics / Module Chapters

(Mention
Page
Numbers) /
Articles /
Cases /
Material and
Activities
1-4 Introduction: Vanita,
Concepts and variables of macroeconomics, circular flow of Agarwal
income in a two sector, three sector and four sector economy, (chapter 1
concept of leakages and injections. and 2) ; Abel
and Bernake
Learning Outcome: Students will learn about the basic (Chapter 1)
concepts in Macroeconomics and how income and output
move between various economic agents.
5-9 National Income and its determination: Vanita
National Income Aggregates, (concept of gross and net, Agarwal,
national and domestic, at market price and factor cost ) (Chapter 3)
nominal and real GDP, Treatment of certain transaction in Dornbusch
national income accounting( sale of second hand goods, (Chapter 2)
changes in inventories, owner occupied dwellings, services of
house wives, services of consumer durables,) ., national
income identities, measurement of national income by income,
expenditure and value added method, simple numerals on
national income.
Class Discussion: E-chapter, volume-II, Economic survey
2014-15: chapter 1, Box 1.1- Revision of the Base Year of
National Accounts from 2004-05 to 2011-12 (page 3)

Learning Outcome: Students will learn about national income

and all related concepts. They will also learn about the
different ways by which NI is measured.
10 Classical Model of Income Determination: Vanita
Say’s Law, Output and Employment in the Classical Model, Agarwal
Criticism of the Classical model. (Chapter 3)

Learning Outcome: To understand the Classical theory of

income determination which forms a basis for other important
macroeconomic theories.
11-20 Vanita
Keynesian Model of Income Determination: Agarwal,
(Chapter
Keynesian consumption function, aggregate demand in two, 5,6,7,8)
three and four sector economy, determination of equilibrium
income, shifts in aggregate demand and the multiplier in two, Mankiw (pg
three and four sector economy with numericals( for two, three 287)
and four sector economy), Paradox of thrift, limitations of the
multiplier, application of multiplier to Less Developed
countries
Case Study: Cutting Taxes to Stimulate Economy, Mankiw,
Pg287
(https://economictimes.indiatimes.com/news/economy/fin
ance/india-considering-7-7-billion-stimulus-spending-in-
2017/18-government-sources/articleshow/60780738.cms

Learning Outcome: To understand the Keynesian framework

and the multiplier concepts along with their practical
application.
21-30 Analysis of the monetary sector: Vanita
Theory of money supply (H theory of Money supply), Agarwal
measures of money supply in India (M1 to M4), Quantity (Chapter
Theory of money ( Income Version: Briefly),Keynesian theory 11,12,13,14)
demand for money, and determination of rate of interest in the
money market , Liquidity Trap

Learning Outcome: To learn and know about money supply

and money demand, monetary aggregates and what factors
affect them.
31-40 IS-LM Framework: Vanita
Goods and money market equilibrium, shifts in IS and LM Agarwal, :
curves, role of monetary and fiscal policy in a closed economy, (Chapter16,1
Numericals 7)
Case Study: The Truth about Abenomics Mankiw
(http://www.businessinsider.in/THE-TRUTH-ABOUT- (Chapter
ABENOMICS-The-Japanese-Economic-Experiment-Thats- 10,11)
Captivating-The-World/articleshow/21249656.cms )
The Great Depression: Mankiw, Chapter11
The Japanese Slump of the 1990s: Mankiw, Chapter11

Learning Outcome: To understand an integrated framework

of Investment Saving, money demand and money supply
through IS-LM model
41-45 Inflation and unemployment: Vanita
Causes of inflation (demand side and supply side), economic Agarwal,
and social costs of inflation (briefly) control of inflation. (Chapter19,
Unemployment- natural rate of unemployment, frictional and 20, 21)
structural unemployment. Phillips curve (Short Run), the
trade-off between inflation and unemployment, sacrifice ratio.
 Different measures of inflation in India: CPI, WPI, GDP
deflator,Core Inflation, headline inflation
Case Study: Inflation targeting and the evolution of
monetary policy
https://www.livemint.com/Sundayapp/b6dtiEFyLTGFikJm
Z5qZfJ/Inflation-targeting-and-the-evolution-of-monetary-
policy.html

Learning Outcome: To understand different types of inflation

and unemployment and their effects on the economy.
46-55 Open economy: Vanita
Foreign exchange market, fixed/flexible exchange rate Agarwal,
system, Mundell-Fleming Model, balance of payment, role of (Chapter22,2
fiscal and monetary policy in an open economy (Expenditure 3,24)
Reducing and Expenditure Switching Policy)
Case Study: Opinion | India’s impossible trinity problem Dornbusch:
https://www.livemint.com/Opinion/8zXO5x6PUmEjhtf2sC Chapter12
wl1K/Indias-impossible-trinity-problem.html
Here are the clues that RBI, others can draw from the US Fed Mankiw:
action Chapter 12
https://www.business-standard.com/article/economy-
policy/here-are-the-clues-that-rbi-others-can-draw-from-the-
us-fed-action-118061400347_1.html

Learning Outcome: To understand and learn about external

trade and balance of payments. Measures to correct
disequilibrium and ISLM framework for an open economy.
56-60 Project Work
Prescribed Text Books:
1. Vanita, A. Macroeconomics: Theory and Policy. Pearson Education
Reading India. (latest edition)
List and 2. Mankiw, N. Gregory, Macoreconomics, 6E, Macmillan Worth
Referen Publishers New York, Hempshire U.K. )
ces 3. Dornbusch,Fischer, Startz: Macro Economics, 8th Edition , Tata
McGraw-Hill

Reference Books:
1. Branson, W.H., 1989. Macroeconomic Theory and Policy. Harper & Row.
2. Dornbusch, 2005. Macroeconomics, 6/E. Tata McGraw-Hill Education.
3. Dwivedi, 2010. Macroeconomics, 3E. Tata McGraw-Hill Education.
4. Froyen, R.T., 2009. Macroeconomics: Theories and Policies. Pearson
Prentice Hall
 Any other information:

Note: Latest edition of text book may be used.

Prepared by Faculty Members Approved by Approved by Associate Deans

Program Chairperson
Dr. Mona Bhalla
Dr. Boishampayan Chatterjee
Dr. Charu Bhurat
Dr. Khushboo Verma

Approved by I/C Dean – ASM

SOC