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Question 1:
a. Discuss the alternative theories of money demand.
b. Highlight the impact of financial liberalization on the money demand in a small island developing economy like Mauritius.
Question 2:
a. Explain the meaning of neutrality of money and classical dichotomy.
b. Discuss Patinkin's ( 1965) proof of the existence of inconsistency and invalid dichotomy in a Walrasian general equilibrium model containing a money market .
c. Discuss Patinkin's ( 1965) solution to make the above model determinate and consistent.
Explain the concept of externality in economics? Give one example of a positive and a negative externality in Australia.
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