Assignment Final Term

Macroeconomics
 Last Date of Submission: 19 September 2020. Delayed submission will result
deduction of points.
 Do not forget to write your Name, ID, Section, Course name etc.

1. a) What are the functions of money? Explain.

b) What is quantity theory of Money? Briefly explain

2. a) Explain the differences among Flexible exchange rate, Fixed exchange rate and Crawling
peg.

b) The Exchange rate of US $ and Bangladeshi taka is 1 US $ = 75 BDT. What will happen if
the exchange rate changes from 1 US $ =60 BDT? What is the effect on net export? explain.

c) What is real exchange rate? If the nominal exchange rate of Indian Rupee and Bangladeshi
taka is 1BDT =1.2 rupee. But the cost of Bangladeshi Lux soap is 35 taka and Indian Lux soap is
70 Rupee. Calculate real exchange rate for Bangladesh and India.

3. a) What are the purposes of government spending? Explain

b) What are the types of income tax system? (i.e: Proportional tax, Progressive tax and
regressive tax)?

4. a) Explain why long-run aggregate supply curve is parallel to vertical axis and short-run
aggregate supply curve is upward slopping.
b) Define inflationary gap and recessionary gap. Explain with AS-AD diagram.