Monopoly Maximizing Profits, Linear Demand Curve and Monopoly,

Markup Pricing, Inefficiency of Monopoly, Deadweight Loss of

Monopoly, what causes Monopolies?
Monopoly Price Discrimination, First-Degree Price Discrimination, Second-
Behavior Degree Price Discrimination, Third-Degree Price Discrimination,
Bundling, Two-Part Tariffs, Monopolistic Competition.
Factors Market Introduction to the market of factors of production, demand and
supply curves, derivation of derived demand curve, market
equilibrium, monopsony

Teaching Methodology:
 To deliver lectures on topics included in course outline
 To require each student to solve independent assignments on topics included in the
course.
Evaluation Criteria:
Evaluation Method Total Percentage
Quizzes/Assignments 25%
Mid-Term Exam 35%
Final-Term Exam 40%

Recommended Books:
 Varian, H. R. (2009). Intermediate Microeconomics: A Modern Approach (8th
ed.). W.W. Norton & Company.
 Nicholson, W. (2000). Intermediate microeconomics and its applications. Dryden
Press: New York.
 Maddala, G. S. (2004), Microeconomics: theory & applications. Tata McGraw-Hill
Education: New York.

Course Code: ECON-206

Title: Intermediate Macroeconomics
Credit Hours: 03
Prerequisite: Principles of Macroeconomics

Course Objectives:
This course is built on the macroeconomic concepts developed in the course on Principles
of Macroeconomics. It will enable students to use various macroeconomic concepts to

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study the dynamics of an economy at a more advanced level. Students will be able to think
critically and to formulate their own perspective on various macroeconomic issues
Learning Outcomes:
This course would help the students to:
 develop a consistent and logical method of identifying economic variables.
 comprehend the concepts related to macro variables and their relationship with
each other.
 to resolve macroeconomic problems them in both a closed and open economy
through alternative policies.
Course Contents:
Introduction The Keynesian revolution and growth of Macroeconomics,
Actual vs. Potential Output, Analytical approach to
macroeconomics, Okun’s Law and unemployment, Price
Indices and Inflation, the simple macroeconomic models, Lead
and Lagged variables, Exogenous and Endogenous variables
and their functional relationships, Introduction to the Classical
and Keynesian Schools of Thought.
Theories of Consumption as a function of income, Theories of
Consumption Consumption: The Absolute income, Relative income,
Permanent income and Life-cycle income hypotheses, Kuznet’s
findings and Reconciliation of Marginal and Average
Propensity to Consume, Random Walk hypothesis.
Saving and Definition of Investment, Real and Financial investment,
Investment Autonomous and Induced investment, Determinants of
investment: The Present Value, IRR and benefit-cost ratio
Criteria, Investment Demand and capital formation, Tobin’s Q-
Theory, Lags in Investment Demand, Volatility of Investment,
Investment by the Public sector, Equilibrium in the goods
market, Derivation of IS curve (graphic), Factors affecting the
position and slope of the IS curve, The Saving-Investment gap
in developing countries.
The Demand for The demand for money, The Quantity Theory of money, The
and Supply of Liquidity Preference/ Portfolio Balance Approach, the supply
Money of money: M1, M2, M3 concepts, the money supply multiplier
and the role of banking system, Instruments of credit control
and the role of central bank, Equilibrium of the money market,
Derivation of LM Curve (graphic), Factors affecting the position
and slope of the LM curve.
Determination of The Keynesian model for a simple two-sector economy,
National Income inflationary and deflationary gaps, the concepts of multiplier,
Interaction of the IS and LM functions and derivation of the

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 aggregate demand function, The impact of changes in public
expenditure, taxation and money supply on aggregate demand
and the rate of interest.
Aggregate Supply The aggregate production function, Demand for Labor in the
and the Labour short run, Labor market and its Equilibrium: The flexible and
Market sticky wage models, the imperfect information model, the
short-run aggregate supply function, The concepts of full-
employment and underemployment, Supply shocks and
stabilization, Interaction of aggregate demand and supply and
price determination.
Inflation and Types, causes and measurement of inflation, the structural and
Unemployment monetary approaches to inflation, Global inflation and its
impacts on developing economies, Transitory and structural
unemployment, the problem of unemployment with special
reference to Pakistan, the relationship between inflation and
unemployment, Phillips curve in the short-run and long-run,
Remedial measures to combat inflation and unemployment.

Teaching Methodology:
 To deliver lectures on topics included in course outline
 To require each student to solve independent assignments on topics included in the
course.
Evaluation Criteria:
Evaluation Method
Quizzes/Assignments
Mid-Term Exam
Final-Term Exam

Recommended Books:
 Shapiro, Edward – Macroeconomic Analysis- Latest Edition–Harcourt Brace Inc.
 Froyen, Richard–Macroeconomics: Theories and Policies–Latest Edition–Macmillan
 Mankiw, Gregory N.- Macroeconomics –Latest Edition, Worth Publishers, NY.
 Blanchard, Oliver – Macroeconomics –Latest Edition - Prentice Hall International.
 Dornbusch & Fisher – Macroeconomics- Latest Edition- McGraw Hill Inc.

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