Economics (BA/BSC 2nd)

Unit-I

Introduction: Nature, Meaning and Scope of Macro-Economics.

Consumption Function:

Average and Marginal Propensity to Consume, Keynes’ Psychological Law of Consumption.

Investment Function:

Types of Investment, Investment Demand Schedule and Factors Affecting Investment Decisions, Marginal

Efficiency of Capital, Static and Dynamic Multiplier.

Unit-II

Determination of Income and Employment:

Classical and Keynesian Theories of Income, Output and Employment, Say’s Law of Markets. Principle of

Effective Demand.

Unit-III

Money and Banking:

Money : Definition, Functions and Role

Quantity Theory of Money: Fisher’s Equation and Cambridge Equation, Keynesian Liquidity Preference

Theory.

Banking: Major Functions of Commercial Banks and Process of Credit Creation. 

Unit-IV

Inflation and Macro-Economic Policies:

Cost-push and Demand-pull Theories of Inflation, Measures to Control Inflation. Monetary and Fiscal

Policies for Stabilization.

Trade Cycle: Meaning and Phases