Master of Management Studies (M.M.S) Economic Environment and Policy Syllabus - Mumbai University 2026

Course objectives

• 1 To explain the structure of the business environment and macroeconomic theories influencing the economy.
• 2 To build conceptual clarity on economic aggregates and policy instruments that affect business outcomes.
• 3 To analyze the functioning of monetary and fiscal policy tools and their macroeconomic implications.
• 4 To foster evaluation of global economic institutions and international financial interlinkages.
• 5 To enable application of macroeconomic principles through case discussions, budgeting exercises, and policy reviews.

Course outcomes

• CO1: Understand and relate to the business environment prevailing in India and in the world and Identifying how the economy is affected by internal and external factor.
• CO2: Describe the economic environmental factors impacting business & analyse their impact on businesses.
• CO3: Analyze the impact of changes in macroeconomic aggregates on economy.
• CO4: Evaluate various macroeconomic policy tools and how they can be used to manage macroeconomic issues.
• CO5: Evaluate the macroeconomic variables related to international markets and evaluate impact of international financial institutions on global economy. Unit / Hours

Unit 1 CO1,CO2, CO3 · 3 hours

Business environment - definition, nature and scope, distinction between internal and external environment of business, Micro and Macro external environment, Limitations of environmental analysis. Impact of macroeconomic environment on businesses (case studies) Macroeconomics: The origin of macroeconomics from Classical, Keynesian, to Monetarists (in brief) Rational Expectation Theory

Unit 2 CO2,CO3 · 6 hours

Understanding the functioning of an economy (Circular flow of income), Consumption Function and Investment Function Growth and development. Interconnectivity between macroeconomic variables & Business Cycles National Income Accounting: Measuring the Aggregate Economy. Concepts- GDP, NDP, GNP, GVA. Real vs. Nominal GDP, Deflator Brief discussion on background & Industrial policy - 1991 - LPG model (Liberalization, Privatization and Globalization) Discussion on evolving Economic Environment - Atmanirbhar Bharat (Make in India, Digital India, Start-up policy, Redefining MSMEs, Infrastructure thrust; Niti Aayog; Inclusive Growth - Jan-Dhan & Aadhar; Amritkaal-Viksit Bharat

Unit 3 CO3 · 6 hours

Money: Concept of Money, of Money in India – M1, M2, M3, L1, L2, L3, Money supply & Demand for money, velocity of money, credit creation process and changing banking scenario Inflation: the concepts of headline inflation, core inflation, food inflation. Demand pull, cost push inflation, types of inflation, causes of inflation, effects of inflation, stagflation and India, The threat of inflation.

Unit 4 CO3, CO4 · 3 hours

Central Banking and Monetary Policy: Role of central bank, methods of credit control, Instruments of credit control, objectives of monetary policy, Inflation & monetary policy: Monetary measures to control inflation - Role of MPC (Reading of Review of Monetary Policy)

Unit 5 CO3 , CO4 · 3 hours

Fiscal policy & Union Budget: Introduction to Fiscal Policy - Public expenditure, Public Taxation & Public Debt, Role of fiscal policy in developing country. Discussion on Union Budget: Budget Format, Sources of Funds, Use of Funds, Types of deficit in Budget, Financing of Fiscal Deficit, debt financing.

Unit 6 CO3 , CO5 · 6 hours

Balance of Payments & External Sector: Structure of BOP, Disequilibrium, Methods to correct disequilibrium Exchange Rate system, Capital Account Convertibility, Impossible Trinity Role of IMF in International Monetary System

Unit 7 CO4, CO5 · 3 hours

Case studies and Presentations

Text Books

• 1 Indian Economy – Performance and Policies – Uma Kapila 24 th Edition
• 2 Indian Economy - Nitin Singhania

Reference Books

• 1 Business Environment and Public Policy by R A Buchholz
• 2 Economic Survey by Ministry of Finance, Government of India - Different issues
• 3 World Development Report by the World Bank - different issues
• 4 Macroeconomics-theory and policy-Dr.H.L.Ahuja-S.Chand and company ltd.
• 5 Macroeconomics-Olivier Blanchard-Pearson
• 6 Macroeconomics-Rudiger dornbusch-Tata McGrawHill
• 7 Principles of Macroeconomics- Karl Ecase, Ray c flair- Pearson
• 8 Macroeconomics-understanding Economic outcomes- Steven Mark Cohn-Jaico