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M.E.C – 002
MACROECONOMIC
ANALYSIS MEC 002 Solved Assignment 2022-23
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Assignment I
Answer the following
questions in about 700 words each.
1. Explain the concept of steady state
growth in the Solow model with appropriate diagram. Show that the golden rule
of Phelps is not a steady state.
2. Differentiate between adaptive
expectations and rational expectations. Explain why the shape of the Phillips
curve changes when we introduce expectations in our analysis.
Assignment - II
Answer the following
questions in about 400 words each.
3. Policy rules are better than
discretionary policies. Justify the above statement in light of new classical
macroeconomics.
4. Explain in brief the salient features
of political business cycle theory.
5. Bring out the factors that lead to
rigidity in wages and prices.
6. Explain with appropriate diagrams why
an economy with fixed exchange rate cannot pursue an independent monetary
policy.
7. Write short notes on the following.
(ii) Do individuals A and B face a
prisoner’s dilemma?
ii) Real business cycle theory
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