Monetary Economics

 MONETARY ECONOMICS (PART - III)

M.A (FINAL) EXTERNAL ANNUAL EXAMINATION - 1997

Time allowed: 3 Hours                          Maximum Marks: 100

Instructions:

1) Attempt any five questions.

2) All questions carry equal marks.

 

1. What are the causes of inflation? Discuss various Fiscal and Monetary measures to combat inflation.

2. What you mean by the Deficit in Balance of Payments? How does this deficit influence the Money supply?

3. What is Chicago Quantity Theory of Money? Explain its main features.

4. Explain “Open Market Operation”. How far these operations are effective in regulating the supply of Money?

5. a) Can the commercial banks create credit in the economy’? Explain.

b) What are the limitations on their powers to create credits? Discuss.

6. a) Interest a “Real” or “Monetary” phenomenon? Explain.

b) Give a brief analysis of Classical theory of Interest, Loan-able fund theory and Keynesian Liquidity preference theory of interest.

7. What is a Phillips Curve? How do expectations of inflation affect the Phillips Curve?

8. Selective credit control policy, as a tool of monetary management in Pakistan is now under attack from various quarters. Discuss. This policy instrument is restricting the growth of banking activities in the country. Do you agree with this view?

9. Write short notes on any two of the following:

i) Purchasing Power Party Theory

ii) International Monetary Fund

iii) International Bank of reconstruction and development

iv) Fixed and Floating exchanging rates.

 

1998

1. What is money and what are its functions in the modern world?

How money is related to the economic variables? Explain.

2. Critically examine the key findings of Fisherian and Cambridge Version of Quantity Theory of Money.

3. Explain the Keynesian money demand function. Why the velocity of circulation of money is not suitable in the Keynesian framework?

4. “Monetary policy is much risingly effective in curbing a boom than in helping to bring the economy out of depression”. Critically evaluate the role of monetary policy as a stabilization tool in the light of the above quotation.

5. The International Monetary System of today has been called a “Managed Floating Currency Standard”. Briefly explain what this term means and how does it operate?

6. “In every society there is some fraction of income which people find it worth to hold in the form of money balances relate this statement to the Cambridge cash balance equation and the Keynesian theory of Liquidity Preference.

7. Discuss the relationship between inflation-and unemployment. How the monetary policy can help to solve the problem of unemployment in the long run?

8. Explain the Function of a Central Bank.

9. Write short notes on any two of the following:

a) Principles of Money Multiplier

b) Liquidity Preference Theory

c) Objectives of Selective Credit Control

d) Purchasing Power Parity Theory

 

1999

1. What is meant by Liquidity Trap? What implications does it have for the Monetary Policy? Discuss.

2. How does the Central Bank Control the Credits? Which instruments of credit control are more effectively applied in the overall economics like Pakistan and why?

3. Distinguish between Demand Pull and Cost Push inflation, which of those two factors is more annexable in the Monetary Policy? Discuss.

4. What are the causes of inflation? Discuss various Fiscal and Monetary measures to combat inflation.

5. a) What is the difference between the Balance of Trade and Balance of Payments.

b) State and explain the causes of Deficit in balance of payment in the export trade of Pakistan and how is it to be controlled?

6. What is Chicago’s quantity theory of money? Explain its main features.

7. What is open market operation? Explain how far those operations are more effective in regulating the supply of money?

8. What is Philips Curve? How does it do the expectations of inflation affect the Philips Curve? Discuss.

9. What are the problems, which Bretton Woods System encountered, in the early 1970? How has the new International Monetary System resolved each of those problems? Explain.

10.Write short notes on any Two of the following:

i) Tools of Monetary Policy

ii) IMF

iii) Quantity Theory of Money

iv) International Bank for Reconstruction and Development (IBRD).

 

2000

1. What is money? Explain its functions in the modem world? How money is related to Economic variables? Explain.

2. Critically examine the Key Findings of Fisherian and Cambridge version of quantity theory of Money.

3. The International Monetary System of today has been called a managed floating currency standard. Briefly explain with the term means and how does it operate?

4. State and explain the function the Central bank. How does its control the money operations of the commercial banks with the help of open market operation?

5. Discuss the difficulties of Barter System. How those difficulties have been resolved in the Monetary System? Explain with examples.

6. What are the Long-run and Short-run goals of Monetary Policy? Can these goals be achieved simultaneously at the same time?

7. Define Monetary Policy and explain its objectives for developing economy for a country like Pakistan?

8. a) Can the commercial banks create credit in the economy?

b) What are the limitations on their power to create credits?

9. Write notes on any two of the following:

a) Purchasing Power Parity Theory

b) Fixed and Floating Exchange rates

c) Principles of Money Multiplier

d) Liquidity Preference Theory.

 

2001

1. Discuss these difficulties of Barter System. How these difficulties have been removed in the monetary system? Explain with examples.

2. What is Money? And what are its functions in the modern world? How money is related to the economic variables? Explain.

3. Define monetary policy and explain its objectives for developing economy like Pakistan.

4. Explain the functions of Central Bank.

5. Critically examine the key findings of Fisherian and Cambridge version of quantity theory of money.

6. What are the causes of Inflation? Discuss various fiscal and monetary measures to combat inflation.

7. How does the Central Bank control the credit? Which instruments of credit control are more effectively applied in the overall economy like Pakistan? And why?

8. a) What is the difference between the Balance of Trade and Balance of Payment?

b) State and explain the economics of deficit and balance of payment in the export trade of Pakistan and how is it to be controlled?

9. a) Can the commercial banks create credit in the economy?

b) What are the limitations on their powers to create credits? Discuss.

10. Write short notes on any Two of the following:

a) International Monetary Fund (IMF)

b) Fixed and Floating Exchanging Rates

c) International Bank for Reconstruction and Development (IBRD).

 

M.A. (FINAL) EXAMINATION 2016 HELD IN 2017

ECONOMICS (PAPER III)

MONETARY ECONOMICS

Time: 3 hours                                                                                      Max Marks: 100

 Instructions:

(i) Attempt any FIVE questions

(ii) All questions carry equal marks

 

Q1       State and explain the functions of commercial banks and their role in economic development of Pakistan.

Q2       Compare the Keynesian's and Friedman's theories of demand for money. Which one is more effective in today's scenario?

Q3       What are the tools of monetary policy? How Central Bank uses these tools to achieve its objectives?

Q4       What is the difference between direct and indirect financing? Discuss the structure of financial market.

Q5       Explain the Keynesian and monetarist views of inflation. Do they both agree that a rapid inflation must be driven by high money supply growth?

Q6       Define evolution of money. Highlight the importance of paper money.

Q7       Write short notes on any TWO of the following

a)    Liquidity trap

b)    General equilibrium

c)    Capital account of balance of payment

  

M.A. (FINAL) EXAMINATION 2017 HELD IN 2018

ECONOMICS (PAPER III)

MONETARY ECONOMICS

Time: 3 hours                                                                                      Max Marks: 100

 Instructions:

(i) Attempt any FIVE questions

(ii) All questions carry equal marks

 

Q1       (a) Explain the functions of money.

(b) What are some advantages and disadvantages of the alternative forms of money commodity, money commodity standard and flat money? Is flat money necessary preferable to the other forms of money? Why or why not?

Q2       (a) What are the types of Financial Institutions?

(b) What are the primary and secondary markets for financial instruments and what distinguishes the money market from capital market?

Q3       In the classical model fiscal policy actions cannot influence aggregate demand but in the Keynesian's theory they can why is this so? Explain

Q4       (a) How does the traditional Keynesian theory of interest rate determination differ from the classical model?

(b) What is the Keynesian transmission mechanism for monetary policy? Explain in detail.

Q5       What is the purchasing power parity theory? Is it useful as a guide to movements in exchange rate?

Q6       What is the Phillips curve? How does the monetarists' interpretation of Phillips curve differ from the traditional Keynesian interpretation? Why do monetarists conclude that the long run Phillips curve is vertical? Explain

Q7       (a) State and explain the functions of central bank.

(b) How does the central bank use the different tools of monetary policy to control inflation in the economy?

Q8       Write short notes on any TWO of the following

(i) Intermediate targets of monetary policy

(ii) International Monetary Fund

(iii) Quantity theory of money

(iv) The future of money

  

M.A. (FINAL) EXAMINATION 2018 HELD IN 2019

ECONOMICS (PAPER III)

MONETARY ECONOMICS

Time: 3 hours                                                                                      Max Marks: 100

 Instructions:

(i) Attempt any FIVE questions

(ii) All questions carry equal marks

 

Q1       (a) What items constitutes the M1 money supply? Distinguish between M1 and M2. Which measure of the monetary aggregates M1 or M2 is composed of the most liquid assets? Which is the largest measure?

(b) What are the different forms of money? What process of money creation has led to the current forms of money?

Q2       What is the difference between the money market and capital market? What types of financial instruments are traded in these markets?

Q3       (a) Why are commercial banks required to have Reserves? Explain why reserves are assets for commercial banks and liabilities to the central bank?

(b) How do commercial banks create money?

Q4       (a) What is the basic objective of monetary policy? Describe the cause effect chains through which monetary policy is made more effective.

(b) Why have open market operations (OMOs) involved as the primary means of controlling commercial banks reserves? Discuss the specific limitations of monetary policy.

Q5       (a) Why does Friedman think that money demand is unaffected by changes in interest rates? Why does Keynes think that money demand is affected by the changes in interest rates?

(b) Why does Friedman's view of demand money suggests that velocity is predictable whereas Keynes’s view suggests opposite?

Q6       Why are discretionary policies to eliminate unemployment more likely to lead to inflation than non-discretionary policies? Give your answer with reference to monetary policy.

Q7       What are the key advantages of exchange rate targeting as a monetary policy strategy? When is exchange - rate targeting likely to be a sensible strategy for industrialized countries? Why?