Shiv Nadar University

Spring 2016

SUB: INTERMEDIATE MACROECONOMICS

COURSE CODE: ECO 302
ASSIGNMENT 1
(Total marks 20; Time to submit 7 days)
Give sound economic reasoning for each of your answers. Be succinct. Marks
will be deducted otherwise.
1. According to the United Nations (UN), the official death toll from the tsunami,
including those missing and presumed dead, is estimated at 225,000 in
Indonesia. . Preliminary estimates put the total cost of reconstruction at $4.5
billion for the coming five years. . Donor countries have pledged nearly $4
billion to finance reconstruction spending in 2005-2009.
In the framework of a real intertemporal model, what would be your comments
on the macroeconomic impacts of the above piece of information?
10
2. The public distribution system has undergone changes in the recent years and
it has been successful in providing food-grains at a very low cost to the BPL
population of the country. However, the success of the PDS has also caused the
BPL population to decrease their search for jobs. How will this affect the Indian
economy? Assume a two period macroeconomic framework and the expenditures
(changes too) on the PDS to be financed through current taxes to comment.
10