Explain why there could be a conflict between external and internal balance.

What is the significance of the traditional Phillips Curve? Why does the shape of the Phillips Curve change when we introduce expectations into our analysis?

Distinguish between demand pull and cost push inflation.

Derive AD curve from the IS-LM model. What are the factors that lead to a shift in the AD curve?

Derive AD curve from the IS-LM model. What are the factors that lead to a shift in the AD curve?

Describe the IS-LM model of simultaneous equilibrium in goods and money markets. What do the points outside the IS and LM curves indicate? Use appropriate diagrams to substantiate your answer.

What type of fiscal policy should the government adopt during recession? Justify your answer.

What is meant by net exports? What are the determinants of net exports?

For a three sector economy the following are given:

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With an example, explain the concept of double counting.

Explain the concept of liquidity trap.

What according to Keynes are the components of aggregate demand? Describe how equilibrium output is determined in the simple Keynesian model.

Give a brief account of the various instruments of monetary policy.

Why did the classical economists fail to explain the Great Depression? What is the Keynesian explanation for the same?

(a) Describe the functions of money.

(b) What according to Keynes are the factors that lead to demand for money?

Explain how the circular flows of income and output in a three sector economy take place. Draw appropriate diagram to substantiate your answer. Point out the leakages from the circular flows.

Write a short note on business cycle indicators.

Give at least two major differences between the new classical and the new Keynesian economics.

What according to Friedman are the factors that determine the demand for money?

Write a short note on the concept of inter-temporal budget constraint.