No.

of Printed Pages : 4 MEC-002

MASTER OF ARTS
7t, (ECONOMICS)
Term-End Examination
December, 2012
C
MEC-002 : MACROECONOMIC ANALYSIS

Time : 3 hours Maximum Marks : 100

Note : Answer questions from each section as directed.

SECTION - A
Answer any two questions from this section in
about 500 words each. 2x20=40
1. An economy with flexible exchange rate and
perfect capital mobility should rely more on
monetary policy. Do you agree with the above
statement ? Support your answer with
appropriate diagrams.

2. The trade-off between inflation and

unemployment is a short - run phenomenon.
Comment.

3. Explain the equilibrium in an economy with the

help of IS and LM curves. What will be the shape
of the LM curve when the economy is passing
through a liquidity trap ?

4. What is meant by efficiency wage ? How does it

help in explaining regidities in an economy ?

MEC-002 1 P.T.O.
 SECTION - B
Answer any five questions from this section in
about 250 words each. 5x12=60
5. Explain in brief the need for endogenous growth
models. What are the various types of endogenous
growth models ?

6. Bring out the major issues on which Robert Lucas

has criticised Keynesian models.

7. Bring out the relationship between average

propensity to consume (APC) and marginal
propensity to consume (MPC). Explain the role
of MPC on investment multiplier.

8 Explain the concept of 'golden rule' in the

neoclassical growth model. In what respects is it
different from steady state ?

9. What are the phases of a business cycle ? Explain

Kelecki's view on business cycle.

10. Do growth rates across economies converge ?

Explain.

11. Bring out the major insights of permanent income

hypothesis.

12. Write short notes on the following:

(a) Real business cycle
(b) Purchasing power parity

MEC-002 2
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MEC-002 3 P.T.O.
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MEC-002 4