Courses Catalogue

Introduction To Macroeconomics

ACADEMIC PROGRAMME: Business Administration (Finance & Banking)
COLLEGE/SCHOOL/FACULTY: College of Economics and Management
PROGRAMME TYPE: Undergraduate

Course Content and Outline


General Introduction to macroeconomics

  • Meaning of macroeconomics,
  • General imbalances that macroeconomics address
  • Importance of macroeconomics
  • How macroeconomics affect the day today life of the people


National Income

  • Meaning of national Income
  • Definition of concepts
  • Determinants of the level of national income
  • Measurement of national income

·         Income Distribution

·         Cost and standards of living

The classical theory of income, output and employment

  • Introduction and analysis of classical theory
  • Say’s law of the market
  • Critique of the Say’s law  

The Principle of Effective demand

  • Meaning of the principle
  • Aggregate demand price
  • Aggregate supply price
  • Determinants of effective demand
  • Importance of effective demand

The Consumption Function

  • Meaning of consumption function
  • Properties of technical attributes of the consumption function
  • Significance of MPC
  • Keynes’ psychological law of consumption
  • Determinants of consumption function
  • Implication of the Keynesian law and importance of consumption function
  • Measures to raise the propensity to consume

The Investment Function

  • Meaning of investment
  • Measuring of capital and investment
  • Types of investment
  • Induced versus autonomous investment
  • Determinants of the level of investment
  • The marginal efficiency of investment
  • Distinction between MEC and MEI
  • Factor other than interest rate that affect the inducement to invest
  • Saving and investment equality

 The concept of Multiplier

  • Meaning of multiplier
  • Measurement and derivation of investment multiplier
  • Assumption of multiplier
  • Leakages of multiplier
  • Importance of multiplier
  • Criticism of multiplier
  • Multiplier in an under developed economy
  • The Keynesian theory of income, output and employment
  • Balanced budget multiplier and foreign trade multiplier

Income determination in a closed and open Economy

  • Income determination in a closed economy
  • Determination of equilibrium level of income, equality of aggregate demand and aggregate supply
  • Equality of saving and investment
  • Income determination in an open economy
  • Determination of equilibrium leveler of income

 Wage-price flexibility and employment

  • Introduction
  • The classical view
  • Keynesian criticism of the classical view
  • Keynesian view on the money-wage reduction and employment
  • The Keynesian effect and its criticism
  • The Pigou effect and its criticism
  • Difference between the pigou effect and real balance effect
  • Flexible wage policy Vs flexible monetary policy


  • Introduction and meaning of inflation
  • The inflationary gap
  • Demand-pull / monetary theory of inflation
  • Cost-push inflation
  • Demand-pull vs. cost-push inflation
  • Mixed demand-pull cost-push inflation
  • Sectoral or demand-shift inflation, structural inflation
  • Mark-up inflation
  • Open and suppressed inflation

Monetary policy: Instruments and Types

  • Instruments of monetary policy
  • Expansionary monetary policy
  • Restrictive monetary policy
  • Role of monetary policy in developing economy


·         Lectures

·         Reading assignments

·         Discussion

·         Field trips

·         Guided Discovery


  • Whiteboard and Markers
  • Flip Charts
  • LCD Projectors
  • CDs, DVDs and Tapes