LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
M.A. DEGREE EXAMINATION – ECONOMICS
FIRST SEMESTER – NOVEMBER 2012
EC 1807 – MACRO ECONOMIC THEORY – I
Date : 05/11/2012 Dept. No. Max. : 100 Marks
Time : 1:00 – 4:00
Part – A
Answer any FIVE questions in about 75 words each: (5 x 4 = 20 marks)
- ‘Money is veil’ – Give your comments on this statement.
- Distinguish between MEC and MEI.
- What is the difference between gross investment and net investment?
- What is meant by user cost of capital?
- Write a short note on Tatonnement hypothesis.
- What is the essence of Lucas critique?
- How does foreign exchange bottleneck affect a developing country?
Part – B
Answer any FOUR questions in about 300 words each: (4 x 10 = 40 marks)
- Trace the effect of change in money supply in the Classical Theory of Employment.
- State and explain the Keynes Psychological law of consumption. What are its implications?
- Bring out the Classical and Keynes’ views on Full employment.
- Briefly explain the determination of equilibrium rate of interest and income using IS-LM model with government sector.
- Discuss the fixed acceleration theory of investment.
- Bring out the main approaches to general equilibrium.
- Compare and contrast the simple aggregate demand and aggregate supply model with the perfect foresight model.
Part – C
Answer any TWO questions in about 900 words each: (2 x 20 = 40 marks)
- Discuss in detail the working of J.B. Say’s law of market in a Barter and Money economy. What are its’ implications?
- Elaborate the Patinkin’s general equilibrium model.
- Critically examine the Jorgenson’s model of investment.
- “Inflation may originate because of cost-push but it can’t be sustained for long unless it is supported by demand-pull inflation” – Discuss.