ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Economics)

WARNING
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING
THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD
OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROM
OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN
“AIOU PLAGIARISM POLICY”.

Course: Introduction to Macroeconomics (802)

Level: MSc. Economics Semester: Autumn, 2020
Credit Hours: 03 Total Marks: 100
Pass Marks: 40
ASSIGNMENT No. 1
(Unit 1–5)

Q.1 a) Define the term Gross Domestic Product. Also explain that in an economy
which transactions are included in GDP. (10)
b) Discuss the major limitations of the GDP concept. (10)

Q.2 Compare the Keynesian predictions about monetary neutrality with those of
classical and the extended classical model with misperceptions. (20)

Q.3 Discuss how would the demand for labor be affected by an increase in productivity
of labor and by an increase in the demand for output? (20)

Q.4 Discuss the following concepts: (05+05+05+05)

i) Balanced and Unbalanced Budget
ii) Demand Deposits and time Deposits
iii) Money Market and Mutual Fund Shares
iv) Bank Reserves

Q.5 Discuss the factors which determine the position of full employment (FE)
line? Give examples of changes in the economy that would shift the FE line to the
right. (20)

1
 ASSIGNMENT No. 2
(Unit 6–9)
Total Marks: 100
Pass Marks: 40

Q.1 Discuss the difference between micro and macro analysis of consumer behavior.(20)

Q.2 Differentiate between gross investment and net investment. Can gross investment
be positive when net investment is negative? (20)

Q.3 According to the Solow model of economic growth, how would effect of an
increase in population growth rate have on long-run living standards? (20)

Q.4 Differentiate between economic growth and economic development by providing

examples of each concept. (20)

Q.5 Discuss in detail how you can measure inflation? (20)