Questions for the interview at FPSC on 2th August 2012

1. What is Philip Curve? Does it apply to Pakistan?.

2. What is theory of trinity? A fixed exchange rate, free capital

movement, (absence of capital controls) and an independent monetary
policy. Mundell–Fleming

What is liquidity trap?

A liquidity trap is a situation described in Keynesian economics in
which injections of cash into the private banking system by a central
bank fail to lower interest rates and hence fail to stimulate economic
growth. A liquidity trap is caused when people hoard cash because
they expect an adverse event such as deflation,
insufficient aggregate demand, or war. Signature characteristics of a
liquidity trap are short-term interest rates that are near zero and
fluctuations in the monetary base that fail to translate into
fluctuations in general price levels.
3.What is the IS/LM model (Investment—Saving / Liquidity preference—
Money supply) is a macroeconomic tool that demonstrates the relationship
between interest rates and real output in the goods and services market
and the money market. The intersection of the IS and LM curves is the
"general equilibrium" where there is simultaneous equilibrium in both
markets

3. How is author of The General Theory of Employment, Interest and

money?

4. What are reasons for double digit inflation?

- M2 – Printing of money.

- Depreciation of currency.

- Fiscal Deficit.

- Low productivity

5. What is Lucas contribution to economic theory?

 - Sticky prices

- Rational expectations

- Ineffectiveness of Public Policy.

6. What lessons we can learn from the East Asian Financial Crisis
1997?

7. What is policy rate of state Bank of Pakistan? Do you think SBP

needs to revisit it.

8. What is GDP growth rate for Financial Year 2012? How it can be
accelerated?

9. What is difference between nominal and real exchange rate? What

are implications of depreciation in real exchange rate?

10. Do you what is Pakistan and Japan Trade relation. What Pakistan is
importing from Japan and exporting to Japan.

11. What do you know about trade integration in South Asia? How it can
be increased in South Asia Region.

12. Do you know about Milton Friedman? What is his contribution to

economic thoughts?

13. What is the research? What are tools and techniques available for
research?

Project management

1. What is project management and project cycle?

2. What is economic and social appraisal? Do you think it is important to

ensure viability of projects?

3. On what basis, projects are approved?

4. How inefficiency in economic development project can be enhanced?

5. How would you like to define fiscal policy? What is fiscal deficit during
fiscal year 2012? How fiscal deficit can be curtained?
GDP

1. Why tax to GDP ratio is low in Pakistan and how it can be improved?

2. What do you know about classical economics and how do you

compare it with Monetarists.

3. What is difference between GDP at factor cost and market price?

4. What is contribution of agriculture, industry and service sector in

GDP?

5. What is GDP growth target for the current fiscal year?

Growth Strategy

1. What are the main pillars of new growth strategy?

2. What GDP growth rate is required to absorb the annual addition in

labor market according to new growth strategy?

3. What sorts of market reforms in growth strategy are envisaged?