ECONOMICS – 2015: Daily Answer Writing Challenge – 5
Answer in 150 words:
1) Differentiate between the complete, partial and zero crowding out effect of a given increase in government expenditure in an economy. (2014- 10 marks)
2) Explain the paradox of thrift. (2014 – 10 marks)
3) “Monetarists are of the view that only money matters and Keynesian believe that money does not matter at all.” What is the reasoning behind these extreme views held by their protagonists? (2014 – 20 marks)
4) Examine with appropriate assumptions, the determination of equilibrium income and interest rate in a Keynesian model of goods and money markets, through diagrams. (2014 – 20 marks)
5) Discuss the classical dichotomy that money is neutral. (2014 – 10 marks)
