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