Chapter Questions
Write a note on following -a) Income and spending.b) Balanced budget theorem.c) What is crowding out and when do you expect it to occur? Is monetary or fiscal policy appropriate in this case?
Write short note on full-employment budget surplus.
Derive the fiscal and monetary policy effect on the IS-LM framework.
Bring out the relative effectiveness of fiscal and monetary policies under different conditions.
Explain the following:a) Show the effect of monetary and fiscal policies on the Classical supply curve.b) Explain why the aggregate supply curve is vertical. How does it differ from the Keynesian aggregate supply curve?c) Write a short note on aggregate supply curve.
Write a note on neo-classical theory of investment?
What are the implications of an increase in the tax-rate in the IS-LM model?
How does an increase in the tax rate in the IS-LM model affect the following?(i)The IS Curve(ii) The equilibrium rate of interest
If the government were to reduce the income tax, how would output and the price level be affected in the short run and the long run? Show the impact on aggregate demand and aggregate supply in both cases.
Derive the income and substitution effects of a wage increase on the hours of work.
Write a short note on money multiplier.
Write a short note on the instruments of monetary control.
Derive the equilibrium of the aggregate demand and supply?
How does the expansionary fiscal policy affect IS-LM equilibrium?
Contractionary monetary policy leads to decline in the interest rate. Comment.
In the long run, prices have positive effect on wages? Explain it in relation to aggregate demand and supply equilibrium?
Inventories invest in the economy when they predict increase in aggregate demand, what do they do when there is contraction in the aggregate demand?
What is an effect of monetary policy on goods market? Examine in detail.
Draw the flowchart of equilibrium of goods and money market.
Explain the equilibrium of aggregate demand in open and closed economy.