18.
14.
15.
16.
17.
18.
19.
20.
21.
22.
28.
24.

26.
27.

29.
30.
31.
32.

3

Part B (Very Short Answer Questions)

Answer any ten questions.
Each question carries 2 marks.

Distinguish between Micro and Macro Economics.

What is meant by effective demand ?

Define MEC.

Cash Balance Approach.

Fiscal Policy.

Stock and Flow variable.

Says law of market.

Bring out the technical attributes of Keynesian consumption function.
Investment.

Define Voluntary unemployment.

Explain Pigou Effect.
Ratchet Effect.
(10 x 2
Part C (Short Essay Questions)
Answer any six questions.
Each question carries 5 marks.
Explain Keynesian theory of income determination in the three sector economy.

Explain Relative Income Hypothesis.
Show that the balanced budget multiplier is equal to 1.
Friedman’s restatement of quantity theory of money.
Describe the Keynesian model of income determination in a two sector economy.
Explain the objectives of fiscal policy.
Discuss the view that ‘saving is a leakage’ in the Keynesian theory.
Explain the theory of comparative static equilibrium.
(6x5

D 11336

= 20 marks)

= 30 marks)

Turn over