Consumption Demand. Absolute Income, Life Cycle, Permanent income and Relative Income Hypothesis; Theory of Investment. Motivation of investment; determination of `present' value of investment; marginal efficiency of capital; acceleration principle. Combination of the Classical and Keynesian Models.

The equality of saving and investment; introduction of supply and demand for money; the Hicks-Hansen analysis and synthesis; flexible wages and employment; critical evaluation of the Keynesian model. The Demand for Money and Money Supply. Theory of Economic Growth.

The Classical growth model; Harrod-Domar growth model; policy implications. External Trade. Theory of Economic Policy