M.A. DEGREE EXAMINATION, APRIL 2016
Second Semester
Economics
MACRO ECONOMICS II
(2011 onwards)
Time 3 Hours Maximum 75 Marks
Part A (10 2 20)
Answer all questions.
All questions carry equal marks.
1. What is meant by business cycle?
2. What is meant by crowding out effect?
3. Define technological progress.
4. What is meant by ICOR?
5. List the characteristics of a good tax system.
6. Define fiscal deficit.
7. Define inflation.
8. What is meant by inflationary gap?
9. Give the equation of interest elasticity of investment.
10. Why is the LM curve sloped upwards?
Sub. Code
455202
RW-10825
2
Sp4
Part B 5 25)
Answer all questions choosing either or
All questions carry equal marks.
11. Explain keynes theory of business cycle.
Or
Explain discretionary fiscal policy for stablization.
12. Write short notes on
Income effect
Capacity effect
Or
Examine the effect of population growth on
economic growth.
13. Examine the effects of public expenditure on
production.
Or
Explain the ability to pay theory of taxation.
14. Explain the causes of inflation in India.
Or
Elucidate the modifications in the Philips curve.
15. In a two-sector model, suppose C Rs. 60+0.80y,
I Rs. 116-2r, L 0.20 y-5r and M Rs. 120. Find
out the equilibrium values of y and r.
Or
If the equilibrium in the goods markets is
Y Rs. 1250 30 r and in the money market is
Y Rs. 750 20 find out the equilibrium income
and rate of interest. Also find out the equilibrium
income when the rate of interest is 12 percent.
RW-10825
3
Sp4
Part C 10 30)
Answer any three questions.
All questions carry equal marks.
16. Critically examine the policy of reducing taxes to
overcome recession.
17. Elaborate the endogenous growth model.
18. Explicate various measures taken by the Government of
India to reduce fiscal deficit in the post reform era.
19. Discuss the inflation-unemployement policy dilemma.
20. Elucidate the derivation of the IS curve.