Macro Economics Notes | B.Com. LL.B. (Five Years) Semester 2 | KSLU | munotes

Contents

Unit I MACRO ECONOMICS AND NATIONAL INCOME

1. Macro Economics: What This Paper Covers, and How to Read This Book 1
2. Microeconomics and Macroeconomics 5
3. Macroeconomics: Its Nature, Scope, Importance and Uses 11
4. The Micro-Macro Paradox and the Paradox of Thrift 15
5. The Circular Flow of Income 20
6. National Income: Meaning and Definitions 26
7. National Income: The Concepts 32
8. Measuring National Income 40
9. The Difficulties of Measuring National Income in India 46

Unit II CLASSICAL AND KEYNESIAN ECONOMICS

1. The Classical Theory of Income, Output and Employment 52
2. Say's Law of Markets 58
3. Wage-Price Flexibility and the Pigou Effect 65
4. The Keynesian Theory of Employment 71
5. Effective Demand and Its Determination 79
6. The Consumption Function and the Propensity to Consume 85
7. The Investment Function and the Marginal Efficiency of Capital 91
8. The Multiplier 97
9. The Accelerator, and How It Differs from the Multiplier 102
10. The Classical and Keynesian Theories Compared 107

Unit III MONETARY ECONOMICS

1. The Value of Money and Fisher's Cash Transactions Approach 112
2. The Cash Balance Approach: Marshall, Pigou and Keynes 118
3. Index Numbers: Simple and Weighted 123
4. Commercial Banks and Their Functions 129
5. Portfolio Management of Commercial Banks: Liquidity and Profitability 134
6. Credit Creation by Commercial Banks 139
7. The Central Bank and Its Functions 143
8. What Determines the Money Supply, and How the RBI Controls It 148
9. Methods of Credit Control: Quantitative and Qualitative 156

Unit IV PUBLIC FINANCE

1. Public Finance and the Shape of the Indian Tax Structure 162
2. The Branches of Public Finance 169
3. The Sources of Public Revenue 173
4. The Characteristics of a Good Tax System 180
5. Direct Taxes in India 185
6. Indirect Taxes and the Goods and Services Tax 192
7. Impact, Incidence and Shifting of a Tax 201
8. The Effects of Taxation on Production, Consumption and Distribution 206
9. Public Expenditure and Its Classification 211
10. Why Public Expenditure Grows 218
11. The Canons and Effects of Public Expenditure, and Maximum Social Advantage 225
12. Public Debt: Its Types and Its Repayment 232
13. Deficits, Public Debt and the FRBM Act 239
14. The Budget: Meaning and Components 248
15. Balanced and Unbalanced Budgets 255

Unit V ECONOMIC FLUCTUATIONS AND BUSINESS CYCLES

1. Inflation: Meaning, Types and Causes 260
2. The Effects of Inflation on Production, Consumption and Distribution 265
3. The Inflationary Gap 269
4. Methods to Control Inflation: Monetary, Fiscal and Administrative 273
5. Trade Cycles and Their Phases 277
6. Why Trade Cycles Happen, and What Governments Do About Them 283
7. The Climatic, Psychological and Under-Consumption Theories of Trade Cycles 292
8. The Monetary and Over-Investment Theories: Hawtrey and Hayek 297
9. Schumpeter's Innovation Theory of Trade Cycles 302