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Section B (Very Short Answers)

Answer any ten questions.
Each question carries 2 marks.

What is money Illusion ?

Explain the relationship between interest rate and bond price.
Distinguish between fiscal policy and monetary policy.

Define GNP deflator.

Explain the Keynesian precautionary motive.

What is meant by money multiplier ?

What is ‘H’ theory of money supply ?

What is meant by monetarism ?

Explain the meaning of neutrality of money.

Distinguish between cost pull and demand pull inflation.
What is meant by classical range in LM curve ?
What is meant by Keynesian liquidity trap ?
(10 x 2
Section C (Short Essays)

Answer any six questions.
Each question carries 5 marks.

What are the important functions of money ?
What are the important instruments of monetary policy ?
Critically examine the classical theory of Interest.
What are the important policy measures to control inflation ?
Briefly explain the short run and long run Phillips curves.
What are the different types of unemployment ?
Briefly explain the Hayek’s theory of business cycle.
Analyze the effects of inflation on different sections of a society.
| (6x5

` C 80391

= 20 marks)

= 30 marks)

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