Tuesday, October 13, 2020

MEC 002 ACROECONOMIC ANALYSIS December 2019 Question Paper



December 2019 Question Paper

Time : 3 hours Maximum Marks : 100

Note : Answer the questions from each section as directed.


Answer any two questions from this section.

1. Explain how steady state is achieved in the Solow model. What additional conditions need to be fulfilled for attaining the Golden Rule ?

2. The Phillips curve describes a trade-off between inflation and unemployment. Can it be used to explain stagflation and natural rate of unemployment ?

3. Explain how simultaneous equilibrium is achieved in goods and money markets with the help of IS-LM curves.

4. Briefly discuss the life cycle hypothesis and permanent income hypothesis of consumption.


Answer any five questions from this section.

5. Explain the concept of rational expectations. What are its implications on policy-making ?

6. Explain the "efficiency wage" model. What are its implications ?

7. Critically evaluate the endogenous growth theory.

8. Explain the mechanism through which internal and external balance takes place under flexible exchange rate.

9. What are the phases of business cycle ? How does political business cycle theory explain these phases ?

10. Bring out the important tenets of Real Business Cycle theory.

11. Explain why monetary policy is ineffective when the economy is in a liquidity trap.

12. Write short notes on any two of the following :

(a) Lucas Critique

(b) Phase Diagram

(c) Effective Exchange Rate