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3 C 21239

Explain the concept of liquidity trap.
What do you mean by stagflation ?
Briefly explain Haw trey’s theory of inflation.
What is inflationary gap ?
Explain briefly the types of unemployment.
Explain Okun’s law.
Define monetary policy.
What are the negative effects of inflation ?
Define mixed inflation.
(10 x 2 = 20 marks)
Part C (Short Essay Questions)

Answer any six questions.
Each question carries 5 marks.

Explain the nature and function of money.
What are the important determinants of money supply ?
Define the term inflation. What are different types of inflation ?
Examine Friedman's view on Phillips curve.
Explain the concept of disequilibrium in the BOP. State the causes of disequilibrium.
What is fiscal policy? State the objectives of fiscal policy in a developing country like India.
Critically evaluate Keynesian theory of business cycle.
What are the typical phases of business cycle ?
(6 x 5 = 30 marks)
Part D (Essay Questions)

Answer any two questions.
Each question carries 12 marks.

Define and derive IS and LM curve. How do they determine general equilibrium?
State and explain the term money supply. Discuss different approach to the measurement of money
supply.
Explain the relative effectiveness of monetary and fiscal policy.
Critically evaluate the theory of Phillips curve and explain its policy implication.
(2 x 12 = 24 marks)