Description
BECM-162: PRINCIPLES OF MACROECONOMICS
Course Code: BECM-162
Assignment Code: ASST/BECM-162/ 2025-26
Total Marks: 100
Assignment I Answer the following Descriptive Category Questions in about 500 words each. Each question carries 20 marks. Word limit does not apply in the case of numerical questions. 2 × 20 = 40
1) Explain how the circular flows of income and output in a three-sector economy take place. Draw appropriate diagram to substantiate your answer. Point out the leakages from the circular flows.
2) (a) Briefly explain the implications of the IS curve. What does a point outside the IS curve mean? What do the position and slope the IS curve imply?
(b) Briefly explain the implications of the LM curve. What does a point outside the LM curve mean? What do the position and slope of the LM curve imply?
Assignment II Answer the following Middle Category Questions in about 250 words each. Each question carries 10 marks. Word limit does not apply in the case of numerical questions. 3 × 10 = 30
3) Define inflation. Explain the manner in which inflation affects the following sections of society: (i) wage earners, (ii) borrowers, (iii) savers, and (iv) producers.
4) Give a brief account of the various instruments of monetary policy.
5) Derive AD curve from the IS-LM model. What are the factors that influence the slope of the AD curve?
Assignment III Answer the following Short Category Questions in about 100 words each. Each question carries 6 marks. 5 × 6 = 30 6) Explain the impact of supply shocks on output and price levels.
7) With an example, explain the concept of double counting.
8) For a three-sector economy the following are given: 𝐶=30+0.75𝑌, I = 30, G = 40 where C = consumption, I = investment, and G = government expenditure. Find out the equilibrium output level. Find out the value of investment multiplier.
9) What is meant by net exports? What are the determinants of net exports?
10) Distinguish between nominal exchange rate and real exchange rate.
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