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25.
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3 ... 2 50771
Difficulties in the measurement of national income.
Money illusion.
Voluntary unemployment.
Marginal Efficiency of Capital.
Tax multiplier.
Ratchet effect.
Real Balance effect.
Fishers equation of exchange.
Inflationary gap.

(10 x 2 = 20 marks)
Part C (Short Essay Type Questions)

Answer any six questions.
Each question carries 5 marks.

Briefly explain the permanent income hypothesis.
Explain the components of aggregate supply.
Explain the instruments of fiscal policy.
What is effective demand ? Explain its determinants.
Explain Pigou effect.
Explain Says Law of market.
Distinguish between micro and macro economics.
How national income is calculated ? Explain the important methods.
(6 x 5 = 30 marks)
Part D (Essay Type Questions)

Answer any two questions.
Each question carries 12 marks.

Explain static, dynamic and comparative static analysis in macro economics.
Explain income determination in a two and three sector economy using Keynesian analysis.
Explain cash balance approach in the theory of money.
Explain the different concepts of national income and its inter-relationships.
(2 x 12 = 24 marks)