MODEL TEST PAPER FOR EXTERNAL EXAM

SHORT NOTES
Paradox of Thrift Liquidity Trap Measures of Money Supply Derivation of IS or LM Model Induced Investment

LONG QUESTIONS UNIT 1 1. Discuss the meaning & scope of Macroeconomics. Discuss the significance of Macroeconomics variables in business decision making. 2. Explain the circular flow of income in all the four sectors of economy. Draw a relationship b/w leakages & injections in circular flw. 3. What is NI? Discuss the different methods of measuring NI. 4. Discuss the significance of the estimates of NI. What are the main difficulties in the measurement of NI? UNIT 2 1. 1.Marginal Efficiency of Capital v/s Marginal Efficiency of Investment. What is the relevance of MEC in investment decision? 2. Meaning of Investment 3. Explain Balance Budget Multiplier. How does it differ from Investment Multiplier? 4. Explain Keynesian Approach on Full Employment & income. Also write usefulness of the theory. UNIT 3

1.

1. What is money? Explain the Classical, Keynesian, Friedman Approach on money. 2. Discuss the Friedman Theory of Demand for Money. How it is different from Keynesian Theory? 3. Define Inflation. Explain Demand Pull & Cost Push inflation. Effects of inflation & how it can be controlled.

UNIT 4 1. What do you understand by money market & product market? 2. Explain the nature of LM schedule, Keynesian, intermediate & the Classical range. Discuss the effectiveness of fixed & monetary policy of these range. 3. Show the derivation of LM curve in Keynesian, intermediate & classical range. Why is fiscal policy more effective in Keynesian range than in classical range.
4. Discuss monetary policy & explain the highlight of recent monetary policy of Govt. of India & suggest how it will help to reduce inflation in the country.