LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034 M.A. DEGREE EXAMINATION – ECONOMICS

AN 24

THIRD SEMESTER – NOV 2006

EC 3808 – MONETARY ECONOMICS – I

Date & Time : 25-10-2006/9.00-12.00 Dept. No. Max. : 100 Marks

Part – A

Answer any FIVE questions in about 75 words each. (5 x 4 = 20 marks)

Explain the suggestions of the Radcliffe-Sayers thesis for an effective working of monetary policy.
What do you understand by expansionary or restrictive monetary policy?
Explain the Newlyn’s interpretation of liquidity of money.
What are the two charges of Patinkin leveled against the Neo-Classical theory of money?
What do you mean by Monetarism and Fiscalism?
How do Neo-Keynesians interpret transmission mechanism?
Distinguish between inflation and stagflation.

Part – B

Answer any FOUR questions in about 300 words each. (4 x 10 = 40 marks)

Outline the various determinants of money supply.
Do you think that the Risk aversion theory of Tobin is an improvement over Keynesian theory? How?
Differentiate Gurley-Shaw thesis with Newlyn’s view of liquidity money.
How does Patinkin synthesize money market and goods market? Is it justifiable?
Discuss the conflict between objectives of monetary policy in India. Do you agree to the view that the goals of monetary policy are not complementary but conflicting with one another? How?
What are the obstacles for an effective implementation of monetary policy in India?
Compare transmission mechanism of the Keynesians with the Classical economists.

Part – C

Answer any TWO questions in about 900 words each. (2 x 20 = 40 marks)

Explain the phenomenon of stagflation. Suggest measures to combat it.
Bring out the essential features of money demand analysis of Gurley and Shaw. How is it an improvement over Keynes’ liquidity preference theory?
Compare the views of the Classical economists on neutrality of money with that of Keynes. Enumerate the conditions for establishment of neutrality of money.
Critically analyse the different interpretations of transmission mechanism of monetary policy.