Ques 1.

Point out the salient features of classical approach to macroeconomics. Why did it fail to explain the Great Depression? What are the changes suggested by Keynes to the classical approach?

Ques 2.

What are the objectives of monetary policy? In order to achieve these objectives, what are the policy instruments adopted by the Central Bank?

Ques 3.

In the IS-LM model, why does an economy move towards equilibrium if it is in disequilibrium? Explain. Use appropriate diagram to substantiate your answer.

Ques 4.

Explain how equilibrium level of output is determined in the Keynesian model.

Ques 5.

Give a brief account of the demand for money in the Keynesian system.

Ques 6.

Describe the impact of inflation on various segments of society.

Ques 7.

For a three sector economy the following is given:
  = 50 + 0.75, I = 30, G = 20
 where C = consumption, I = investment, and G = government expenditure.
 Find out the equilibrium output level.

Ques 8.

Define investment multiplier. What are its limitations?

Ques 9.

Write a short note on the various types of inflation in an economy.

Ques 10.

Write a short note on the function of money in an economy.