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This book is written as per the new syllabus of Macro Economics
for B.Com students. It covers first semester Macro Economics II.
This book is written with the advance purpose in mind...

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Macro Economics – II
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This book is written as per the new syllabus of Macro Economics
for B.Com students. It covers first semester Macro Economics II.
This book is written with the advance purpose in mind to present
unified and understandable knowledge of the economics before the
students.
This book is the product of ten years of teaching Macro
Economics at various courses of student’s in Kavayitri Bahinabai
Chaudhari North Maharashtra University, Jalgaon Notwithstanding
the availability of insufficient literature on the subject, and demand
for students of B. Com after part I. it was felt that none of the English
books available in the market cover the course requirement of the
students. The present book aim to cover this deficiency.
The book Macro Economics has been divided into two parts.
Part One, with six chapters, concern itself with explaining Supply of
Money, Demand for money, Macro Economics Problems, Macro-
Economic Policies, International trade and Foreign Exchange
Rate.

1. Supply of Money.........................................07
1.1 Meaning & functions of money
1.2 Measures of money supply
1.3 The liquidity measures in India & explanation of their
components L-1, L-2 & L-3
1.4 Money supply & role of commercial Banks:
a) Process of credit creation & credit Multiplier
b) Limitation of credit creation
1.5 Money supply & Central Bank
a) Role of Central Bank
b) Objectives of credit control
c) Tools of credit control & liquidity management

2. Demand for Money .......................................32
2.1 Determinant’s of demand for money
2.2 Motives of demand for money
2.3 Theories of demand for money
a) Fisher’s Quantity Theory of money
b) Keynes Liquidity Preference Theory

3. Macro Economics Problems................................46
3.1 Inflation - a) Meaning, b) Demand pull inflation, c) Cost
push inflation, d) Inertial inflation & expectation
3.2 Effects of inflation: Positive & Negative
3.3 Trade-off between inflation & unemployment (Philips curve
Analysis short run and long run)
3.4 Business cycle: meaning, features & various phases

4. Macro-Economic Policies...................................61
4.1 Meaning & Objectives of macro-economic policies.
4.2 Supply side economics
a) The Central Theme
b) Tax cuts aggregate supply
4.3 The Laffer curve
4.4 Critical evaluation

5. International Trade ...............................................70
5.1 Difference between Internal & International trade
5.2 Concept of Balance of Payment & Balance of Trade
5.3 Structure of Balance of Payment
5.4 Meaning of disequilibrium of Balance of Payment
5.5 Causes of disequilibrium of Balance of Payment
5.6 Measures to correct adverse Balance of Payment
5.7 Argument for & against free trade & Protectionism

6. Foreign Exchange Rate ....................................88
6.1 Meaning of exchange rate
a) Merits & demerits of fixed & flexible exchange rate
6.2 Factors affecting foreign exchange rate.

References............................................................96

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