Description
MEC-102: MACROECONOMIC ANALYSIS
Tutor Marked Assignments
Course Code: MEC-102
Assignment Code: MEC-002/2023-24
Total Marks: 100
Note: Answer all the questions.
Section A
Answer the following questions in about 700 words each. The word limits do not
apply in case of numerical questions. Each question carries 20 marks.
1. Discuss how an economy achieves equilibrium in the IS-LM model. What do the points
outside the IS curve signify? Highlight the factors that influence the IS and the LM
curves.
2. Discuss the important features of new-classical macroeconomics. What are the major
policy issues highlighted by new-classical economics?
Section B
Answer the following questions in about 400 words each. Each question carries 12marks.
3. Specify a loss function and interpret it. What is meant by dynamic inconsistency?
4. Differentiate between adaptive expectations and rational expectations. Explain why the
shape of the Phillips curve changes when we introduce expectations in our analysis.
5. Bring out the factors that lead to rigidity in wages and prices.
6. Describe the importance of public debt in an economy. Under what conditions is public
debt not sustainable in an economy?
7. Write short notes on the following.
i) Inter-temporal utility maximization
ii) New-Keynesian macroeconomics
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