MACRO ECONOMICS Unit I: Introduction Concept and Variables of macroeconomics, Income, Expenditure and The Circular flow, Components of expenditure. Consumption, Saving and Investment and S-I approach, Multiplier (two sector) and Numerical, Static macro economic analysis short and the long run- Determination of supply, Determination of demand, and Conditions of equilibrium. Unit II: Economy in the short run Meaning, Objective and Instruments of fiscal and monetary policy, AD-AS approach; Determination of aggregate Aggregate supply in the short and long run, and Aggregate demand- Aggregate supply analysis. Economy in the short run IS-LM framework. demand, Shifts in aggregate demand, Unit III: Inflation, Unemployment and Labour market Inflation, Causes and Effect of rising and falling inflation, Demand pull and Cost push inflation and Measures to control inflation, Inflation and interest rates, Social costs of inflation. Unemployment - Natural rate of unemployment, Frictional and wait unemployment. Labour market and its interaction with production system. Phillips curve, Trade-off between inflation and unemployment, Sacrifice ratio, Role of expectations adaptive and rational. Unit IV: Open Economy Flows of goods and capital, Saving and Investment in a small and a large open economy, Exchange rates; Fixed and Flexible, Mundell- Fleming model with fixed and flexible prices in a Small Open economy with fixed and with flexible exchange rates, Interest rate differentials case of a Large economy. Balance of payments, Trade balance, Current and Capital Account, Autonomous and accommodating transactions and Measures to control disequilibrium on BOP. Unit V: Behavioural Foundations Behavioural Foundations- Investment-Determinants of business fixed investment, Effect of tax, Determinants of residential investment and Inventory investment. Demand for Money - Portfolio and transactions theories of demand for Real balances, Interest and Income Elasticities of demand for real balances. Supply of money.