LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

M.A. DEGREE EXAMINATION – ECONOMICS

RF 18

SECOND SEMESTER – APRIL 2007

EC 2805 – MACRO ECONOMIC THEORY – II

 

 

 

Date & Time: 19/04/2007 / 1:00 – 4:00Dept. No.                                              Max. : 100 Marks

 

 

PART A               (5 X 4 = 20 marks)

Answer any FIVE questions in 75 words each. Each question carries FOUR marks.

 

1. What are the assumptions of the Ricardian theory of income distribution?
2. Define the concept of surplus value and the organic composition of capital used in Marxian theory.
3. State the assumptions of the Kaldor model of the trade cycle.
4. Explain the concept of endogenous growth.
5. Mention the key propositions of the Feldman model of economic growth.
6. What is permanent income hypothesis of consumption?
7. Explain the concept of random walk of GDP.

 

                         PART B                (4 X 10 = 40 marks)

Answer any FOUR questions in 300 words each. Each question carries TEN marks.

 

1. Highlight the key features of Kaldor’s theory of income distribution.
2. Critically examine the Marxian theory of income distribution.
3. Explain the simple version of the Goodwin model of the trade cycle.
4. Examine a fully developed endogenous growth model using both capital and labour.
5. Describe a propagation mechanism used in real business cycle theory. Explain briefly how it works.
6. How does Pierre Perron prove that both aggregate demand and aggregate supply shocks contribute to business cycle fluctuations?
7. Highlight the similarities and differences between Harrod and Solow models of economic growth.

 

PART C                (2 X 20 = 40 marks)                                 

Answer any TWO questions in 1200 words each. Each question carries TWENTY marks.

 

1. Derive mathematically the nature of relationship between wages, degree of

monopoly power and the value of raw materials in the Kalecki theory of income

distribution.

1. Show how Hicks makes a significant contribution to the theory of the business

cycle by combining the accelerator-multiplier interaction with the forces of

economic growth.

1. Derive equilibrium price and output using the rational expectations equilibrium

model.

1. “The general vision of the Harrod-Domar approach seems inconsistent with the

experience of real growing economies”. Discuss this in the light of the Harrod

model of economic growth.

 

 

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