Course Outline

Programme: PGDM (FMG-29)

Name of the Core Course: Macroeconomics and Policy Credit: 1.5

Term-3 Academic Year: 2020-2021

Faculty: Dr. Basant K. Potnuru Office Contact No.: 011-46485514

Email: basant@fsm.ac.in

Introduction

Macroeconomics is the study of aggregate economic relationships. It focuses on the interrelationships

between aggregate economic variables: real output, rate of inflation, growth rate, rate of unemployment,
rate of interest, the value of money, and major components of aggregate demand and income.

The current and future values of the macroeconomic variables and their interactions are key for managers
to plan their businesses accordingly. It is vitally important to know how the economy will react to the
variations in each of these variables in order to map out the threats and opportunities for a particular
business organization. The study of Macroeconomics can provide useful insights and tools to analyze the
economy and business opportunities and anticipate them to seek answers in varieties of business
situations that can alert managers beforehand about the upcoming endogenous shifts in the economy.

Objective
To make students understand the macroeconomic governance in the country. It equips students to identify
key macroeconomic variables and the nature of their relationships to assess the impact on economic
aggregates and individual businesses. This helps them to plan and act swiftly to various macroeconomic
opportunities and shocks that emerge. This course aims to enable managers with required tools to analyze
macroeconomic environment for strategic business.

Text Book:
Dornbusch, R., Fisher, S., and Startz, R., Macroeconomics, 12th edition, 2019, Tata McGraw Hill, New
Delhi.

Reference Books:
Mankiw, N. Gregory, Principles of Macroeconomics, 6th Edition, 2012 (re-print 2017), South-Western, a
part of Cengage Learning.

Blanchard, O & Johnson, D R, Macroeconomics, 6th edition, 2017. Pearson, India.

Pedagogy: A mix of lectures and class discussions, quizzes and assignments will be employed.

Evaluation Component and weightage

Quiz : 20
Assignment & Presentation : 20
Class Participation : 10
Mid/End Term : 50
________
Total 100 Marks

1
 Session Plan:
Sessio Session Theme
n No.
1 Introduction to
Macroeconomics & its
Relevance to Business.
Circular flow of income
2&3 National Income Account
Identity.
GDP Deflator.
Nominal and real Income.
WPI/CPI inflation
4&5 Theories of employment:
Short run & Long run
equilibrium (Aggregate
Demand and Aggregate
Supply).
6&7 Money Market: Quantity
theory of money, Demand for
and Supply of Money.
8&9 IS-LM Equilibrium
Stabilization Policies:
Monetary and Fiscal Policy
10 Quiz & Review
Readings
Mankiw, N. Gregory,
Principles of
Macroeconomics, 6th
Edition, 2012 - Chapter 1
&2
Mankiw, N. Gregory,
Principles of
Macroeconomics, 6th
Edition, 2012 - Chapter 10
Dornbusch, Fisher, and
Startz, Macroeconomics,
12th edition, 2013 – Chapter
2
Dornbusch, Fisher, and
Startz, Macroeconomics,
12th edition, 2013 – Chapter
5, 6
Mankiw, N. Gregory,
Principles of
Macroeconomics, 6th
Edition, 2012 - Chapter 20
Dornbusch, Fisher, and
Startz, Macroeconomics,
12th edition, 2013 – Chapter
10
Mankiw, N. Gregory,
Principles of
Macroeconomics, 6th
Edition, 2012 - Chapter 16
& 17
Dornbusch, Fisher, and
Startz, Macroeconomics,
12th edition, 2013 – Chapter
9, 10 & 11.
Mankiw, N. Gregory,
Principles of
Macroeconomics, 6th
Edition, 2012 – Chapter21,
22
2
Learning Outcome
Understanding the
application of
Macroeconomics in
Business decision
making; and
understanding the flow
of income &
consumption.
Knowing how to assess
GDP numbers and make
use in business decision
making
Understanding the roles
of the government and
business under different
economic systems
Understanding how the
financial markets
function and affect the
economy
Understanding how do
the goods market and
money market interact.
How do the monetary
policy and fiscal policy
work to stabilize the
economy?
For official use: -
As Benchmarked with course content in previous year, the contents of this course: (Please mark the
right option below)
(a) Is totally new
(b) Has not changed at all
(c) Has undergone less than/equal to 20% change
(d) Has undergone more than 20% change

Faculty Signature: _______________

Area Chair Signature: _____________