MEC 002 Solved Assignment 2021-22

 

MEC 002

MACROECONOMIC ANALYSIS (Assignment)

Course Code: MEC-002

Assignment Code: MEC-002/2021-22

Total Marks: 100

Note: Answer all the questions. While questions in Section A carry 20 marks each (to be answered in about 500 words each) those in Section B carry 12 marks each (to be answered in about 300 words each). In the case of numerical questions word limits do not apply.

Section A

1. What is meant by steady state in the Solow model? Explain how Golden Rule is different from steady state.

2. Explain how the permanent income hypothesis reconciles the difference between short-run and long-run consumption behavior.

Section B

3. Policy makers should stick to rules instead of pursuing discretionary polices. Do you agree with the above statement? Substantiate your answer.

4. Explain in brief the salient features of real business cycle theory. In what respects is it different from other theories of business cycle?

5. Explain why firms may offer a higher wage to workers than the equilibrium wage rate.

6. Bring out the important issues on which Lucas criticizes Keynesian macroeconomics. To what extent the New-Keynesian economists have accepted these criticisms?

7. Write short notes on the following.

 i) Rational expectations and adaptive expectations

ii) Non-accelerating Inflation Rate of Unemployment

 

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