Interest

Interest

Bachelor of Business Studies (BBS) — First Year

Subject: Microeconomics for Business (MGT 207)

Unit 8: Theory of Factor Pricing

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of interest.
• Explain the economic reasoning and use appropriate diagrams or relationships in business analysis.

Curriculum Scope

• Nominal and real interest rates
• Interest-rate differentials
• Loanable-funds theory
• Liquidity-preference theory

Detailed Microsyllabus

1. Interest concepts

   1. Nominal and real interest and purchasing power.
   2. Sources of interest-rate differentials.
   3. Time, risk and contractual characteristics.

2. Interest theories

   1. Loanable-funds demand and supply.
   2. Liquidity preference and money-market reasoning.
   3. Compare assumptions and determinants in the two explanations.

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Curriculum reference: Tribhuvan University, Faculty of Management, BBS curriculum with first-year syllabus, PDF pages 17-19.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit lecture hours apply to the whole unit; no separate topic hours or marks are assigned here. The programme subject list identifies this course as MGT 207; the detailed subject heading in the source prints MGT 203.