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In the subject of Managerial economics II, you will be understanding how the application of the economic concepts and economic analysis can be useful in formulating rational managerial decisions.

Managerial Economics II subject’s main learning objectives are:

1) To impart understanding of evolution and operation of economic policies

2) To discuss the effect of macroeconomic policies on managerial decisions

3) To understand the factors determining the growth, inflation, business decisions etc.

4) To improve understanding of how macroeconomic policy influences business cycles.

5) To understand the basic economic principles related to global market and exchange rate

There will be 4 main units in Managerial Economics II subject which are listed as below:

Unit 1 – Introduction to Macro Economics

Unit 2 – International Economics

Unit 3 – Policy Environment

Unit 4 – Global Markets and Institution

The main chapters covered in these units are given as below:

Unit 1: Introduction to Macro Economics: Macroeconomic Aggregates & Concepts

a) Circular Flow of Income,

National Income and Related Concepts,

Calculation of National Income (Numerical),

National Income Deflator,

Concept of Human development Index(H.D.I.),

Concept of Inclusive Growth,

Supply of Money,

Demand for Money,

Concept of Inflation And Stagflation.

b) Determination of Income and Employment – Keynesian Theory –

Consumption Function,



Business Cycles – Phases & Features.


Unit 2 – International Economics

a) Concept of International Trade,

Distinction between Domestic and International Trade

b) Classical Theory of International Trade –

Absolute, Equal and Comparative Cost Difference,

Factor Endowment Theory.

c) Balance of Payment (B.O.P.) – Structure,

Disequilibrium & Types,

Measures to correct B.O.P. disequilibrium.


Unit 3 – Policy Environment

a) Monetary Policy – Objective & Instruments

b) Fiscal Policy- Objective & Instruments

c) Economic Stabilization – IS-LM Model (Effect of Monetary and Fiscal Policy on National Income, Rate of Interest)

d) Trade Policy: Free Trade and Protection.


Unit 4 – Global Markets and Institution

a) WTO – Agreements and implications,

Contentions issues,

Dispute settlement mechanisms.

b) World Bank – structure – purpose & function.

c) Exchange Rate System (Fixed, Flexible & Managed Exchange Rate Systems).

Foreign Exchange Market, feature, functions, participant,

Factors affecting exchange rate,

Foreign exchange quotation and its different type.
List of Reference Books for Managerial Economics II preparation:

  1. Macroeconomics for Business and management – By H L Ahuja
  2. Macroeconomics – By Richard T Froyen
  3. Macroeconomics – By Mankiw N G.
  4. The Indian Economy – By Ray S K
  5. Indian Economy and the WTO – By Vibha Mathur
  6. Macroeconomics: Theory and Applications- By G.S. Gupta


sybms syllabus

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