Course Title: Macroeconomics for Business
Course Code: MGT 209:
Lecture hours: 150
Full Marks: 100
Pass Marks: 35
Course Objectives
Macroeconomics for Business aims to enhance understanding of macroeconomic principles and Nepalese macroeconomic situation to the Bachelor level students. It will help to inculcate the skills incorporating different macroeconomic domains in the assessment of the nature of the business environment.
Course Description
This course of macroeconomics makes students skilled to understand macroeconomic concepts, theories, and contemporary macroeconomic issues pertinent in Nepal. This course comprises an introduction to macroeconomics, national income accounting, the classical theory of employment, Keynesian macroeconomics, IS-LM model, inflation, business cycles, monetary theory, and policy, government finance, and fiscal policy, the global economy, and contemporary issues in reference to Nepal.
Learning Outcomes
By the completion of the course students will be able to:
Explain the nature of macroeconomics and macroeconomic variables; explain the concepts and difficulties of measuring national income and calculate the national income by product,
income, and expenditure methods.
Derive consumption function, saving function, investment function, investment multiplier, government expenditure multiplier, tax multiplier, foreign trade multiplier, IS curve, and LM curve and determine the equilibrium level of income and employment in Classical, Keynesian, and IS-LM model.
Describe the concepts and causes of inflation, deflation, stagflation, and business cycles; assess their effectiveness and identify the measures of reducing their consequences in business.
Describe the concept and structure of the financial market, monetary policy, government finance, fiscal policy, and fiscal federalism, in reference to Nepal and explore the effect of change in monetary policy and fiscal policy on the equilibrium level of national income.
Explain the effect of the global and regional economy in the Nepalese economy in reference to exchange rate, the balance of payments, foreign direct investment, and foreign employment and explain contemporary macroeconomic issues from the Nepalese perspective.
Course Details
Unit 1: INTRODUCTION TO MACROECONOMICS LH 6
Macroeconomics: concepts, scope, uses, and limitations; and Macroeconomic concepts: stock and flow variables; equilibrium and disequilibrium; static and dynamic equilibrium analysis.
Unit 2: NATIONAL INCOME ACCOUNTING LH 20
Circular flow of income and expenditure in two-sector, three sectors, and four sector economy; Different concepts of national income: GDP, NDP, GNP, and NNP at market price and factor cost, personal income (PI), disposable personal income (DI), per capita income (PCI); Real GDP, nominal GDP and GDP deflator; Computation of national income: product method, income method and expenditure method; and Difficulties in the measurement of national income. Numerical Exercise
Unit 3: CLASSICAL THEORY OF EMPLOYMENT LH 6
Unemployment: concept and types; Say’s Law of the market: concept, assumptions and implications; and Classical theory of employment: assumptions, components, and criticisms.
Unit 4: KEYNESIAN MACROECONOMICS LH 30
Principle of effective demand; Consumption function: concepts, psychological law of consumption, technical attributes, and determinants; Saving function: concepts, technical attributes, and determinants; Paradox of thrift; Investment function: concept and types of investment, the marginal efficiency of capital, investment demand curve, and determinants of investment; Income and output determination in the two-sector economy; Investment multiplier: concept, income generation process and leakages; Income and output determination in three sectors and four sector economy; and Derivation of government expenditure multiplier; tax multiplier and foreign trade multiplier. Numerical Exercise
Unit 5: IS-LM Model of INCOME DETERMINATION LH 7
Derivation of IS curve and product market equilibrium; Derivation of LM curve and money market equilibrium; General equilibrium in the product market and the money market; and Shifts in IS and LM curves (change in monetary and fiscal policies) and effects on equilibrium. Numerical Exercise
Unit 6: INFLATION AND BUSINESS CYCLES LH 18
Inflation: concepts and types; Measurement of inflation through consumer’s price index (CPI) and GDP deflator; Demand-pull inflation and cost-push inflation; Concept of core inflation; Effects of inflation; anti-inflationary measures; Inflation and unemployment: Phillips curve and stagflation; Deflation: concept and causes; Nature, causes and effect of inflation in Nepal; Business cycles: concepts, characteristics and phases; and Measures to control business cycles. Numerical Exercise
Unit 7: MONETARY THEORY LH 16
Money supply: concepts and determinants; Money market and capital market: concepts and functions; Structure of financial market in Nepal; Monetary Policy: concepts, types, objectives, and instruments; and Features of current monetary policy of Nepal.
Unit 8: GOVERNMENT FINANCE LH 15
Government budget: Concepts and components; Deficit financing: concept, objectives, and methods; Sources of government revenue in Nepal, Government expenditure of Nepal; Features of current government budget of Nepal; Fiscal policy: concepts, types, instruments and objectives; and Fiscal federalism: concepts, components, and Nepalese practice.
Unit 9: GLOBAL ECONOMY LH 17
Global economy: concept and current trends; Globalization: concepts, drivers, benefits and defects; Regional integration and trading blocs: concepts and role; Issues of Nepali foreign trade; Exchange rate: concept and types; Determination of equilibrium exchange rate under fixed and flexible exchange rate system; Balance of payments: concept and BOP accounts; Foreign direct investment: concepts, benefits, defects, and current status of Nepal; and Foreign employment: benefits, defects, and current status of Nepal.
Unit 10: CONTEMPORARY MACROECONOMICS ISSUES IN NEPALESE PERSPECTIVES LH 15
Macroeconomic indicators of Nepal; Privatization and liberalization: concepts, benefits, and defects; Economic growth and development: concepts and components; Sources of economic growth; Poverty: concepts, types, causes, and remedies; Economic inequality: concepts, causes, and remedies; Public-private partnership: concepts, importance, and Nepalese practice; and Financial inclusion: concepts, determinants, and current Nepalese status.
Macroeconomics-for-Business-New-SyllabusPDF file of the syllabus is HERE