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ASSIGNMENT No. 1
Units: (1–5)
Course: Monetary Economics (2708) Semester: Autumn, 2011
Level: M. Phil Economics Total Marks: 100
Pass Marks: 50
Q. 1 Describe money and various stages in its evolution. (20)
Q. 2 a) During the Great Depression years 1930-33, the currency ration (E/D) rose dramatically. What do you think happened to money supply? Why? (10)
b) During the Great Depression, the excess reserves ratio (ER/D) rose dramatically what do you think happened to the money supply? Why? (10)
Q. 3 a) In Keynes’s Analysis of the speculative demand for money, what will happen to money demand if people suddenly decide that the normal level of the interest rate has declined? Why? (10)
b) Why is Keynes’s analysis of the speculative demand for money important to his view that velocity will undergo substantial fluctuations and thus can’t be treated as constant? (10)
Q. 4 Discuss and differentiate between (20)
a) primary market and secondary markets
b) derivative products and derivative markets.
Q. 5 Discuss monetary equilibrium in the Keynesian system. (20)
ASSIGNMENT No. 2
Units: (6–9)
Total Marks: 100
Q. 1 Distinguish between demand pull and cost push inflation. How have these two views on inflation been reconciled? (20)
Q. 2 What are the goals of monetary policy? Explain in particular the trade off in these objectives. (20)
Q. 3 Discuss the role of monetary policy in an open developing economy. (20)
Q. 4 If the central bank buys rupees in the foreign exchange market but conducts on offsetting open market operation to sterilize the intervention, what will be impact on international reserves, the money supply and the exchange rate? (20)