[Macroeconomics]

Module I: Introduction and Measurement of Macroeconomic Activity [10 Hours]

What do macroeconomists study? The difference between microeconomics and macroeconomics,
Microeconomic theory and macroeconomic models, the circular flow of income (two, three & four
sector economy), Measuring the values of economic activity: The Gross Domestic Product-
Measurement- Output, Income, Expenditure methods, Rules for measurement & Issues, Real vs
Nominal GDP measurement, GDP Deflator, Chain weighted measures of real GDP.
Module II: Classical and Keynesian Theory of Income Determination [11 Hours]
The classical revolution and classical macroeconomics- Factor market analysis (output and
employment determinations), The Keynesian system- income determination (output and
unemployment), The wage-price flexibility, The consumption function (psychological law of
consumption. MPC and APC), The concept of aggregate demand (consumption, investment, and
government spending) and aggregate supply.
Module III: The Monetary System- Money, Interest, and Monetary Policy [14 Hours]
The evolution and concept of money (background, meaning, and nature of money), Types and
functions and money, The quantitative theory of money- classical, Cambridge, and Keynesian
theory- the liquidity preference and liquidity trap, Central banking and monetary policy, the new
money supply measures, credit creation, money multiplier, and tools of monetary policy.
Module IV: Inflation and Unemployment [10 Hours]
Meaning and causes of inflation, Measures of inflation (CPI and WPI), Monetary policy, output,
and inflation- Friedman’s view, Output and inflation trade-off- Keynesian view, Meaning and types
of unemployment, Measurement of unemployment in Indian economy, Inflation and
unemployment trade-off (the Phillips curve), Determinants of the natural rate of unemployment,
Time varying natural rate of unemployment, Recent trends of unemployment and inflation in India.

Textbooks:
1. Froyen, R.T. (2013). Macroeconomics Theories and Policies (10th ed.), Pearson
Education India, Delhi.
2. Mankiw, N. G. (2019). Macroeconomics (10th ed.), Worth Publishers, Macmillan
Learning, New York.
Assessment methods:
1. Continuous Evaluation [70% weightage: Class-Test(30%), Assignment(20%), and Mid-
term(20%)]; Final Examination (30% weightage).