MEC-002 Solved Assignment 2018-19
MEC-002: MACROECONOMIC ANALYSIS
Course Code: MEC-002
Assignment Code: MEC-002/AST/2018-19
Maximum Marks: 100
Note: Answer all the questions. While questions in Section A carry 20 marks each (to be
answered in about 700 words each) those in Section B carry 12 marks each (to be answered
in about 500 words each).
1. Compare and contrast between the Ramsey model for the central planner and the Solow
model for economic growth (your answer should include the assumptions, important
equations, phase diagram and its interpretation).
2. Explain, through appropriate IS-LM curves, the type of monetary and fiscal policies a
government should take to deal with recession in an open economy.
3. Explain how you can reconcile the long run vertical Phillips curve with the short run
downward sloping Phillips curve.
4. If the assumptions of the Solow model are taken to be true, explain how growth rates
converge across countries.
5. Bring out the salient features of the real business cycle theory.
6. What, according to Keynesian economists, are the factors that lead to rigidities in wages
7. Write short notes on the following.
a) Permanent income hypothesis
b) Rational expectation hypothesis