SVKM'SN"S

SARLA ANIL MODI SCHOOL OF ECONONICS .

Academic Year: 2022-23

Program: Master of science a]conomics) Year: I Semester: I

Subject: Macroeconomic Theory -I ` Batch: 2022-23
Date: 23 February 2023 Time: 1030 an to l2.30 pin
Marks: 50 Duration: 2 ars)
No. of Pages:±
RE-EXArmiATION

~ Instructions: Candidates should read carefully the instructions printed on the question paper
and on the cover of the Answer B_ook, which is provided for`their use.

I. In all 5 questions to be attempted

2. Answer to cach new question to be started on a fresh page
3. Figures in brackets on the right hand side indicate full maces
4. Ass`me Suitable data if necessary
5. Draw a diagrammed wherever required

Q1. In the monetary poliey review, the Monetary Policy Committee quc) of RBI (10)
continue the withdrawal of the accommodative stance and increase repo rate by
50 basis point to 5.90 percent. Discuss the following observations made by the
committee in the context of hffc decision

i. Advance economies have followed the tight monetary policy

ii. The index of industrial productions is expected to slow down
iii. the rupee is depreciated to its record low against us dollar

Q2. Write a short Note (5 Marks each)

i. Crowding out
ii. Wage RIgidity

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Q3. Consider the following Economy, (10)

C - 200 + 0.25YI)
I - 150 + 0.25Y - 1000i
G - 250
T - 200
qu / p)d = 2Y - 8000i
M / P -1600

Calculate the equilibriim level of output and interest rate

The Fiscal Expansion takes the fom of an increase in Govemmeut
spending -G rises to 400. Calculate the new level of Invesinent

Q4. The original Phillips curve vanish because wage setters changed the way they (10)
formed their expectations about inflation. Explain.

Q5. If the saving rate of India doubles during 2001 to 2008 and the growth rate.of (10)
population reduced to half explain the inpact on steady state equilibrium.

Q6. Analyze the following situations following the Mlmdell-Fleming fromework (10)
under perfect capital mobility with flexible exchange rate
Government introduce the bailout package of Dollar 22 Billion
The RBI have taken various measure to increase the liquidity

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