list of topics covered in the Notes,

Unit-I: Income and Employment Determination:
Nature and scope of Macro Economics, difference between Micro and Macro Economics and
importance of Macro Economics.
National Income: Concepts, measurement and limitations of National Income Statistics, Circular
flow of income in two, three and four sector economy. National Income and Welfare.
Determination of Income and Employment: Classical Theory of Employment, Say’s Law of
Market and its implications, Keynesian objections to Classical Theory, Keynes Theory of

Unit-II: Consumption Theories:
Consumption Function, Keynes Psychological Law of Consumption and Its Implications,
Consumption Function Puzzle: Kuznet’s Findings, Paradox of Thrift.
Income-Consumption Relationship: Absolute Income Hypothesis, Relative Income Hypothesis,
Permanent Income Hypothesis, Life Cycle Hypothesis.

Unit-III: Investment Theories:
Types of Investment, Determination of Level of Investment: Classical and Keynesian approach;
Accelerator theory, Profit theory and Koyck’s approach of Investment.
Multiplier and Accelerator: Multiplier: Concept, Investment Multiplier, Government Expenditure
Multiplier; Income determination involving government expenditure and tax Multiplier;
Leakages of Multiplier, Acceleration Principle, Super Multiplier.

This content is for B.A ECB-251, Macroeconomics-I members only.
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