EC 3808 – MONETARY ECONOMICS

Date & Time: 02/05/2007 / 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)

Do you agree to the view of Radcliffe committee that monetary policy should be subordinated to fiscal policy for an effective control of the liquidity of money?
Differentiate Bank rate from Variable Reserve Rate as an instrument of monetary policy.
Distinguish between Neutrality and non-neutrality of money.
What do you understand by Real balance effect?
Differentiate monetarism from Keynesianism.
How does Friedman interpret output effect in transmission mechanism.
Distinguish between Mark-up inflation open and oppressed inflation.

Part – B

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

What is meant by the supply of money? Examine the various components of the money supply in India.
Bring out the superiority of Baumol’s inventory approach over Keynesian approach.
Compare and contrast Gurley and Shaw thesis with Radcliffe-Sayers thesis.
Critically evaluate Friedman’s reformulated theory of money.
Do you think that the monetary techniques are effective to control and monitor the flow of money and credit into the economy? Why?
Describe the lags of monetary policy.
Outline the similarities between monetarists and Fiscalists.

Part – C

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

Discuss different theories of inflation.
Critically analyse the Keynes’ reformulated quantity theory of money.
What is inflation? How does the Philips curve explain the trade off between unemployment and inflation? Discuss its policy implications.
Describe the role of monetary policy in a developing economy. Is monetary policy effective in curbing inflation? Why?