www.kannuruniversity.ac.in Kannur University : Macro Economics Model Question Paper

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KANNUR UNIVERSITY
M.A DEVELOPMENT ECONOMICS PROGRAMME – CCSS-PG(2011 Admn)
MODEL QUESTION PAPERS
ECC02 -MACRO ECONOMICS-Part I

Part A :
Answer all questions :
I
1. According to Baumol’s theory of demand for money :
(a) Transaction demand for money is interest inelastic
(b) Speculative demand for money is interest inelastic
(c) Transaction demand for money is interest elastic
(d) Speculative demand for money depends on level of income

http://117.211.84.98/regulations/
http://117.211.84.98/regulations/modelmade.pdf

2. Accelerator measures :
(a) Change in consumption due to change in income
(b) Change in income due to change in investment
(c) Change in investment due to change in income
(d) Change in savings due to change in income
3. Rational Expectation is associated with :
(a) Monetarists (b) Keynesians (c) New classicals (d) None of these
4. Liquidity trap gives rise to :
(a) Vertical LM schedule (b) Vertical IS schedule
(c) Horizontal LM schedule (d) Horizontal IS schedule
(Weightage :1)

II
5. Phillip’s curve traces relationship between :
(a) Rate of inflation and real wages (b) Rate of inflation and unemployment
(c) Nominal wages and rate of employment (d) Real wages and rate of employment
6. The IS curve depicts :
(a) Goods market equilibrium (b) Money market equilibrium
(c) Labour market equilibrium (d) Bond market equilibrium
7. Speculative demand for money is inversely related to :
(a) Income (b) Money supply (c) Rate of interest (d) Investment
8. The term notional demand was coined by :
(a)Walras (b) J. B. Say (c) Clower (d) Lange
(Weightage :1)

Part B :
Answer any ten questions :
Each answer should not exceed one and a half pages.
9. Explain Keynes’ Effect.
10. Why is high powered money known as monetary base?
11. What are the basic themes of Monetarism?
12. Explain Real balance Effect.
13. Explain Inside Money and Outside Money.
14. What is meant by classical dichotomy?
15. Explain the relative income hypothesis.
16. Explain Tobin’s theory of demand for money.
17. What is Stagflation?
18. Differentiate among investment, net investment and replacement investment.
19. Enumerate the Marshall-Lerner conditions.
20. Explain absolute income hypothesis.
(Weightage 1´10 = 10)

Part C :
Answer any five questions :
Each answer should not exceed two and half a pages.
21. Why is Keynes’ theory not applicable to long-run problems of economic growth?
22. Examine the interaction between Multiplier and Accelerator.
23. Give a brief account of supply side economics.
24. What is Tobin’s q ratio? Explain its implications.
25. Distinguish between Classical and Keynesian theories of output and employment.
26. Explain the different measures of money supply.
27. Explain the concept of Rational Expectations
(Weightage 2´5=10)

Part D :
Answer any two questions :
Each answer should not exceed six pages.
28. Discuss the Absorption theory of Balance of Payments.
29. Discuss the Mundel-Fleming open economy model.
30. Explain the fiscal and monetary policy analysis using the IS-LM model.
31. Explain the Neo-Keynesian Quantity constrained models.
(Weightage 4´2= 8)

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