Macroeconomics · A module in nine lessons
Macroeconomics foundations, from zero to exam level
National income, the Keynesian cross, consumption, investment and money are the part of macroeconomics every entrance exam asks, every year. This module teaches them from the ground up, one idea at a time, until the 448 past-paper questions sorted into its lessons feel routine.
448past-paper questions, each placed in a lesson
25of them the Delhi School’s harder ones, gathered in Lesson 9
9lessons, all live
0prerequisites beyond school algebra
This is a course, not a single article.9 lessons that build on each other, each about 40 minutes, with its own interactives, checked exercises and graded past papers. Take them in order, or let the diagnostic tell you where to begin.
The path
The lessons
0 of 9 doneYour progress is saved on this device.
- Lesson 1
Measuring the economy: GDP and its relatives
The circular flow, why three ways of measuring GDP give one number, value added, and the ladder from GDP to national income and personal disposable income.
- Lesson 2
Real, nominal and the GDP deflator
Separating quantities from prices: base years, real growth, the deflator against the CPI, stocks and flows, and how to read a national accounts table.
- Lesson 3
The classical model and Keynes's challenge
Say's law, the labour market, money as a veil and the loanable funds market; then why Keynes argued output could settle below full employment.
- Lesson 4
The Keynesian cross and the multiplier
Planned spending against the 45° line, unplanned inventories, saving equal to investment, the multiplier as spending rounds, gaps and the paradox of thrift.
- Lesson 5
Government, taxes and trade in the multiplier
Lump-sum and proportional taxes, transfers, the balanced budget multiplier, imports, and what happens when workers and capitalists spend differently.
- Lesson 6
Consumption: Keynes, Friedman and Modigliani
The absolute income hypothesis and its puzzle, relative income and the ratchet, the life cycle, permanent income, and choosing between today and tomorrow.
- Lesson 7
Investment
Present value and the marginal efficiency of capital, the user cost, the accelerator and its interaction with the multiplier, and Tobin's q.
- Lesson 8
Money, banks and the money multiplier
What money does, the RBI's measures, high-powered money, how banks create deposits, the money multiplier, and the tools of monetary policy.
- Lesson 9
The Delhi School problems
The DSE's harder questions on this module: demand-led models with two classes, open-economy multipliers, the money multiplier, and choice over time.
Three parts
Lessons 1 and 2 are about measuring: what GDP is and how to separate real growth from rising prices. Lessons 3 to 5 are about what decides output in the short run, from the classical model to Keynes and the multipliers. Lessons 6 to 8 open up the pieces: consumption, investment and money. Lesson 9 gathers the Delhi School’s harder questions. IS–LM and AD–AS build on all of this and come in the next module.
Where to start
A five-minute diagnostic
16 questions, two for each lesson so far. Your answers tell you which lesson to start with.
Question 1 of 16
A baker buys flour for ₹600 and sells bread for ₹1,000. The bakery's value added is
The goal
What you will be able to solve
Nine real questions, from the easiest level to the hardest. By the end of the module each should take you under three minutes.
FoundationHyderabad 2021 · Lesson 1
A farmer sells wheat to a miller for ₹500, the miller sells flour to a baker for ₹700, and the baker sells bread for ₹1,000. What value do the miller and baker add?
FoundationHyderabad 2011 · Lesson 4
Given the consumption function C = 510 + 0.9Y, what is the multiplier?
FoundationCUET 2023 · Lesson 8
The currency–deposit ratio is 0.2 and the reserve–deposit ratio 0.1. What is the money multiplier?
StandardJNU 2017 · Lesson 2
Real GDP per head rose 50% in a decade and population 20%, and prices never fell. What is the least nominal GDP could have grown?
StandardJNU 2019 · Lesson 5
Y = 4,000, a 30% income tax, c = 0.8 and G = 1,000. G rises until the budget exactly balances. By how much must it rise?
StandardIIT JAM 2021 · Lesson 6
People earn from 18, retire at 60 and die at 90; income at age t is 100t − t². By the life-cycle theory, what is average annual consumption?
AdvancedDSE 2010 · Lesson 9
Two groups get shares λ and 1 − λ of income and consume with propensities c_A < c_B. What is the investment multiplier, and what does a rise in λ do?
AdvancedDSE 2013 · Lesson 9
In an open economy with I = 3,200, G = 4,000, X = 800, s = 1/2 and m = 1/10, what tax rate balances trade?
AdvancedDSE 2019 · Lesson 9
A consumer with CRRA utility and discount rate ρ faces interest rate r ≥ ρ. How do c₁ and c₂ compare?
How it teaches
How each lesson works
- 1A question to hold on to
Each lesson opens with a real exam problem you can't yet solve, and solves it at the end.
- 2Intuition, then picture, then formula
The formula arrives last, as shorthand for something you already understand.
- 3Pause and predict
Commit to an answer before reading on. Being wrong first is what makes it stick.
- 4Worked exam problems
Real past questions, reworked step by step. Where a key is wrong, the lesson says so.
- 5The traps
The wrong options examiners actually use, and why they tempt.
- 6Check, then practise
Checked exercises, a one-screen summary, then graded past papers.
The evidence
Where the questions come from
JNU154
Hyderabad98
CUET-PG71
UGC NET43
Delhi School of Economics30
IIT JAM29
GATE23
Questions placed in this module, by exam.
JNU asks the most, often as sets of four to seven questions on one data table or model. Hyderabad and CUET ask definitions and one-step multipliers every year. JAM and GATE favour numerical answers you type in, so the arithmetic has to be exact.
The Delhi School’s questions here are fewer but harder: two-class spending models, open-economy multipliers and consumers choosing over time. The easy ones sit in the ordinary lessons; the rest wait in Lesson 9.
Real questions
Practise across lessons 1–8
Foundation
Definitions and one-step problems. Most CUET, UGC NET and Hyderabad questions sit here.
150 questionsPractise →
Standard
Two or three steps and data tables, up to the hardest JNU, JAM and GATE questions.
273 questionsPractise →
Advanced
The Delhi School of Economics' harder questions, collected in Lesson 9.
25 questionsLesson 9 →
These are questions from the TestStop bank. A free account answers 10 a day, each with its worked solution; All-Access opens every set with no daily limit.
Read next
All resources →MacroeconomicsMacroeconomics 1: measuring the economy, GDP and national incomeThe circular flow, value added and double counting, the product, income and expenditure methods, what counts in GDP, and the ladder from GDP to national income and personal disposable income.MacroeconomicsIS–LM to AD–AS, from zero to exam levelA module that builds the short-run macro model one curve at a time: the demand for money, the IS and LM curves, policy, aggregate demand and supply, the Phillips curve, expectations and the open economy, each with interactives and graded past-paper sets.MacroeconomicsThe Solow model and the steady stateWatch capital per worker converge to its steady state, then raise the saving rate and see why more output isn't automatically more consumption.