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Macroeconomics AD Curve & Policies Guide

This document provides a summary of a macroeconomics exam covering aggregate demand (AD) curves, government policy measures to boost the economy during a recession, and the multiplier effect. The exam consists of 3 questions: [1] Constructing an AD schedule and curve from consumption, investment, government spending, and net export data; [2] Suggesting and explaining a government policy to improve the economic situation using an AD-AS model; [3] Explaining the tax multiplier, deriving its value, and comparing it to the investment multiplier.

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Manu Vyas
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49 views1 page

Macroeconomics AD Curve & Policies Guide

This document provides a summary of a macroeconomics exam covering aggregate demand (AD) curves, government policy measures to boost the economy during a recession, and the multiplier effect. The exam consists of 3 questions: [1] Constructing an AD schedule and curve from consumption, investment, government spending, and net export data; [2] Suggesting and explaining a government policy to improve the economic situation using an AD-AS model; [3] Explaining the tax multiplier, deriving its value, and comparing it to the investment multiplier.

Uploaded by

Manu Vyas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd

MACROECONOMICS & BUSINESS ENVIRONMENT 2

Course Code: SL EC 501 Date: 13/11/20


Full Marks: 25
Instructor: Swati Pathak
Total Marks 25
Time: 30 minutes.

Brief answers and neat and clean diagrams with proper labeling will be
awarded.

1. Construct AD schedule from the following information. Based on the


information draw AD curve. Explain each components of AD curve here.
(Marks will be assigned on labelling each components).
2+ 4+4 =10

C =200 + 0.8Y

I = 600 crores

G= 900 crores

And NX (net export) = 700 crores

2. In an era of recession with unintended unemployment, and lower


output and lower aggregate demand, Government wants to take some
measures to boost economy (aggregate demand). Suggest any policy to
improve economic situation. Explain your policy in Keynes AD-Y
equilibrium model and show how your policy change the equilibrium.

1+9=10

3. What is meant by multiplier. Explain tax multiplier and derive its value.
Is the value lower than investment multiplier? 1+3+2= 5

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