Q1. Derive the Government Expenditure Multiplier in the IS-LM framework and describe that it is smaller than the Simple Keynesian Model. Describe why?
Q2. Sketch and describe the shape of Aggregate Supply and aggregate demand in:
a) Short Run
b) Long Run.
Q3. Describe the method of adjustment and movement from short run equilibrium to a long run equilibrium.
Q4. In Loanable Funds Theory of interest rates:
a) Show that the impact of an increase in government expenses on real interest and loanable funds.
b) Show that the impact of a fall in the savings.
Q5. Write detail notes on (any two):
a) Demand shock and its Input
b) Okums law
c) Components of aggregate demand
d) Crowding out effect