Nov
27
3:30 PM15:30
MACROECONOMICS
📄 MACROECONOMICS — MOCK TEST
(100 Marks | 3 Hours)
SECTION A — MCQs (20 marks | 1 mark each)
1. In IS–LM model, an increase in government expenditure shifts:
2. Velocity of money in Quantity Theory is assumed to be:
3. Phillips Curve shows relationship between:
4. In Solow model, long-run growth is driven by:
5. Liquidity Trap implies LM curve is:
6. Stagflation means:
7. 'Crowding out' effect occurs due to:
8. In open economy Mundell–Fleming model, under flexible exchange rate, monetary policy is:
9. If MPC=0.8, the simple expenditure multiplier is:
10. Real Business Cycle models emphasise shocks in:
SECTION B — Short Questions (30 marks | 5 marks each)
1. Explain the derivation of IS curve.
2. Distinguish between demand-pull and cost-push inflation.
3. Write short notes on NAIRU.
4. Explain money multiplier mechanism.
5. What is crowding-out effect? Why does it occur?
6. Compare Solow growth model with endogenous growth model.
SECTION C — Numerical / Analytical Problems (25 marks | 12.5 marks each)
1. In a closed economy:
C = 100 + 0.75Y
I = 50
G = 40
Find equilibrium income and multiplier.
2. Using Solow model:
Production: Y = K0.3L0.7
Saving rate = 25%, Depreciation = 5%, n = 2%
Derive steady-state capital per worker.
SECTION D — Long Questions (25 marks | attempt any one)
1. Derive IS–LM equilibrium. Evaluate monetary vs fiscal policy effectiveness under liquidity trap and classical range.
OR
2. Explain business cycle phases using both Keynesian and RBC perspectives. Discuss whether output fluctuations are demand-driven or technology-driven.