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Structural Budget Deficit, Equilibrium Level of Income, Keynesian Expenditure Multiplier, Lm Curve, Level of Income, Interest Rates, Value of Monetary Policy, Market-Clearing Income. Above mentioned are some points from questions of Introduction to Macroeconomics. Enjoy past exam.
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Ollscoil na hÉireann, Gaillimh (^) _GX______
Exam Code(s) 2BC1, 2BC2, 2BC3, 2BC4, 2BC5, 2BCA1,^ 1EM1, 1OA1, 4BF1, 1DB1, 3CL1, 4CL Exam(s) Bachelor of Commerce, Bachelor of Commerce (French), Bachelor of Commerce (German), Bachelor of Commerce (Spanish), Bachelor of Commerce (Italian), Bachelor of Commerce (Accounting), Eramus, Visiting Students, Bachelor of Science (Business Information Systems), Higher Diploma in Business Studies, Bachelor of Corporate Law, Bachelor of Corporate Law (International) Module Code(s) EC^213 Module(s) Macroeconomics Paper No. 1 Repeat Paper External Examiner(s) Dr.^ Pat McGregor Professor Liam Delaney Internal Examiner(s) Professor John McHale Dr. Gerard Turley Instructions: There are three sections to be answered. Please answer any three questions from Section A (45 marks), any five questions from Section B (15 marks) and any two questions from Section C (40 marks). All questions within each section carry equal marks. Duration 3 hours No. of Pages 5 Discipline Economics Course Co-ordinator(s) Gerard Turley Requirements : MCQ Release to library : Yes Handout Statistical Tables Graph Paper Log Graph Paper Other Material
SECTION A (45 marks) Answer any 3 (and only 3) Questions
M = mY X = X (a) Derive, from first principles, the equilibrium level of income. (10) (b) Explain the Keynesian expenditure multiplier. In (a) above, what does the value of the multiplier depend on? Derive the formula for the multiplier using the equilibrium equation from (a) above. (5)
(a) Calculate the equilibrium income level. (8) (b) If public sector spending on goods and services is reduced by 50, what is the new equilibrium level of income? (4) (c) Sketch the equilibrium position as in (a) or (b) above. (3) [All calculations to two decimal points] P.T.O.
SECTION B (15 marks) Answer any 5 (and only 5) Questions. Each question is worth three marks.
SECTION C (40 marks) Answer any 2 (and only 2) Questions
(a) Write a short essay on pre-Keynesian (i.e. Classical) economics as it applies to macroeconomics. (8) (b) Explain and show, using the Keynesian cross diagram, how the IS curve is derived. What determines the position and slope of the IS curve? (8) (c) What does the Keynesian model of income determination predict about austerity, and, in particular, the effects of tax increases and spending cuts in the current economic climate? What are the economic arguments made in favour of austerity? (4)
(a) Using the IS/LM model and diagrams, explain the effect of the following on interest rates and GDP i. a tax increase by the Minister for Finance; ii. the Central Bank prints more money. (10) (b) Using the IS/LM/BP model, explain the impact of a monetary policy expansion in a fixed exchange rate system. Use an appropriate diagram. (10)
(a) What is the aggregate supply curve? Explain the different AS curves. (4) (b) Explain what is meant by supply-side policies. Illustrate, using the AD/AS model, the effect of a market-enhancing supply-side measure on output and price levels. (8) (c) Using the short-run AD/AS model, analyse the effects of expansionary demand management on prices and GDP. Use an appropriate diagram. (8)