MEC-102 EM 2025-26 SOLVED ASSIGNMENT

Description

MEC-102: MACROECONOMIC ANALYSIS
Assignment

Course Code: MEC-102
Assignment Code: MEC-102/AST/2025-26

Note: Answer all the questions. While questions in Section A carry 20 marks each, those in Section B carry 12 marks each.

Section A

1. Consider the overlapping generations model where each member lives for two time periods ‘t’ and (t+1). Assume that individuals work in time period ‘t’ and earn wage income, while they do not work in time period (t+1) and survive on interest income. Explain the impact of an increase in interest rate on consumption during time period ‘t’.
2. Explain the optimal conditions of the household equilibrium in the Ramsey – Cass -Koopmans model. Derive relevant equations and use appropriate diagrams.

Section B

3. In an open economy with fixed exchange rate, the government does not have autonomy in monetary policy. Do you agree with this statement? Justify your answer.
4. What does the Phillips curve signify? How do you reconcile the difference in the shape of the curve in the short run and the long run?
5. Critically examine the relevance and implications of policy ineffectiveness theorem.
6. Bring out the salient features of the life cycle hypothesis. What are its implications?
7. Write short notes on the following:
8. a) Dating of Business Cycles
9. b) Measures of Money Supply