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Problem 1:
(a) What are the main assumptions behind the macroeconomic theory of New Classical Economists?
(b) Describe the Lucas Supply function and explain its policy implications?
Problem 2:
(a) Analyse the activist/non activist policy debate.
(b) What is time inconsistency in monetary policy and what are the classical solutions to this problem?
Money market: The money market is a market of short-term loans. It consists of financial institutions having surplus fund to lend on short-term basis, and those wishing to bor
Market failures (even when they do not have international external effects) i) Self-fulfilling bank runs, government debt runs, currency crises. ii) Liquidation costs of li
1. Seller has ample time to adjust to price change. 2. Buyer's response to small price change is significant. 3. Buyers are faced with many options when deciding to make a
what is the second best?prove the theorem with the help of a diagram?
draw the supernormal curve
conditions of pareto optimality
Q. Can you explain about Counterfactual? The ‘base case' or counterfactual is a statement of what could have happened without policy intervention, or if the policy intervention
A firm's production function is given by Q = √LK . The price of labour is w and the price of capital is r. a. The price of labour is $5 and the price of capital is $20. What is
explain about rent theory
describe who gets hurt in a recession, and how.
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