LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
M.A. DEGREE EXAMINATION – ECONOMICS
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FIRST SEMESTER – APRIL 2007
EC 1807 – MACRO ECONOMIC THEORY – I
Date & Time: 27/04/2007 / 1:00 – 4:00 Dept. No. Max. : 100 Marks
Part – A
Answer any FIVE questions in about 75 words each. (5 x 4 = 20 marks)
- What is devaluation?
- Explain briefly marginal efficiency of capital.
- How is wage push a cause for inflation?
- What is multiplier?
- How is the national income determined?
- Does the logic of Keynesian multiplier apply to LDC? Give necessary explanation in this regard.
- What is life cycle hypothesis?
Part – B
Answer any FOUR questions in about 300 words each. (4 x 10 = 40 marks)
- Explain any popular method used for taking decision on investment projects?
- How is there interdependence between money and product markets?
- Explain the fiscal and monetary measures in controlling inflation?
- Discuss the crux of real balance effect?
- Explain the circular flow of income in a two sector model.
- Why is Say’s law considered as a core of Classical thinking at macro level?
- Discuss the assumption underlying accelerator theory of investment.
Part – C
Answer any TWO questions in about 900 words each. (2 x 20 = 40 marks)
- Explain the four sector model of income determination.
- Discuss the NAIRU curve and explain how it differs from the Philips curve.
- Explain any static equilibrium model.
Discuss the theory of rational expectations.
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