Investment multiplier

Investment multiplier

Bachelor of Business Studies (BBS) — Second Year

Subject: Macroeconomics for Business (MGT 209)

Unit 4: Keynesian Macroeconomics

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of investment multiplier.
• Explain the economic model or issue, identify its assumptions and interpret the relevant diagrams, calculations or dated evidence.

Curriculum Scope

• Concept
• Income-generation process
• Leakages

Detailed Microsyllabus

1. Multiplier process

   1. Initial investment and successive income rounds.
   2. Marginal consumption and saving propensities.
   3. Derive the simple investment multiplier.

2. Leakages and limitations

   1. Saving, taxation and imports as relevant leakages.
   2. Assumptions of the basic model.
   3. Distinguish a theoretical multiplier from an observed empirical effect.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 24-26.

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 or component allocations apply at their stated level; no separate topic hours or marks are assigned here. Nepalese current-status discussions should identify the reporting period and use dated official publications, such as Nepal Rastra Bank reports, rather than undated figures.