LEADING UNIVERSITY, DHAKA

COURSE TITLE- MACROECONOMICS FINAL EXAM, FALL-2011 PART A:

(Answer any three of the following questions) (15) 1. What is the concept of keynsian consumption equation? What is APC and MPC? 2. What is the concept of Permanent income hypothesis? How transitory income can affect consumption? 3. How can you differentiate between Monetary and Fiscal policy? 4. What is Inflation? When inflation can play positive role in Economy? 5. What are the measures a government can take to control Inflation? Part B: Answer all of the Questions (25) 1. Suppose consumption C=80+.6Yd, I=80,G=65, T=35,Now find out: The Output The effect of tax in output Suppose you want maintain a output 1000, How can you do that through maintaining the tax? (7) 2. Suppose demand for money is L=0.30 Y and supply of money is 250 & for two sector model C=100+0.8Yd and I=150-5i Find out the IS LM equation, Find out the consumption, Investment and interest rate. If money supply is increased by 30, Then show the effect in Monetary and fiscal policy (8) 3.In a digram show the effect of following incidents in a IS-LM diagram : Money supply increased. Government expenditure Increased Tax decreased

(5)

4.In a life cycle theory show the effect of savings and consumptions in different ages of human being? (5)