Principles of Macroeconomics II — DU B.A. (Hons.) Economics Previous Year Question Papers

1. (a) Explain the derivation of the IS curve. What factors cause shifts in the IS curve? (12.5) (b) Explain how the slope of the LM curve is determined. What factors influence it? (12.5) (a) Using the IS-LM framework, explain the effect of an increase in transfers (TR) on output and interest rate. (12.5) (b) Explain the working of fiscal policy versus monetary policy in the IS-LM model. (12.5) Fİl Policy a (Metary Policy) * 2. (a) Explain the effect of an increase in expected inflation on output and price level in the short run. (12.5) (b) Explain how mark-up pricing by firms affects real wages and unemployment. (a) Explain the effect of a reduction in government spending on output and price level using AD-AS. (12.5) (b) Explain the adjustment process after a supply shock. (12.5) (b) Explain the expectations-augmented Phillips curve. (12.5) Exegened Phillip (a) Explain the short-run and long-run Phillips Curve. (12.5) (b) Explain how changes in expected inflation shift the Phillips Curve. (12.5) 4. Explain the determinants of net exports (NX). How do changes in domestic income, foreign income, and real exchange rate affect NX? (15) Explain the effect of a real exchange rate appreciation on output, imports, and exports. (15)