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IGNOU MACROECONOMIC ANALYSIS: MEC-002 June: 2018 Question Paper
MacroEconomic Analysis: MEC-002
June: 2018
Note: Answer the questions from each section as directed.
SECTION-A
Answer any two questions from this section.
Q1. Derive IS and LM curves. What are the implications of these curves? What are the factors that influence these curves?
Q2. “Policy makers should go by rules, not by discretion”. Justify the above statement in light of the new classical macroeconomics .
Q3. Describe the overlapping generations model. Explain how multiple steady state is obtained in such a model.
Q4. What is meant by rigidities in an economy? Why do rigidities in wage rate and price level take place?
SECTION-B
Answer any five questions from this section.
Q5. What is meant by natural rate of unemployment? Reconcile between the downward sloping short-run Phillips curve and the vertical long-run Phillips curve.
Q6. Bring out the major insights of search and matching model of unemployment.
Q7. Do growth rates in economies converge? Explain your answer.
Q8. Explain the phases of a business cycle. How does political business cycle theory explain the phases?
Q9. Bring out the salient features of real business cycle theory.
Q10. Distinguish between the concepts of adaptive expectations and rational expectations.
Q11. Explain the concept of investment multiplier in the presence of government sector. What are the factors that influence the value of the multiplier?
Q12. Write short notes on the following:
(a) Efficiency Wage Model
(b) Permanent Income Hypothesis