Explain the neoclasscal theory of residential investment?How does it differ from the accelerator theory of investment?

Question One.

a)Discuss the effectiveness of fiscal and monetary policy in the economy”s short run equilibrium.

b)Derive the aggregate demand curve for a small open economy.

Question Two.

a)Discuss the four theories in favor of an upward sloping aggregate supply curve.

b)What is the effect of an anticipated expansionary monetary policy in the AD-AS model?

Question Three.

a)Derive the dynamic aggregate demand curve?

b)Discuss the long run Philips curve and how does it filter from the short run Philips”s curve?

Question Four.

a)Discuss the portfolio theory of demand for money?

b)How does the Random walk hypothesis differ from the Permanent Income Hypothesis?

c)What is a Consumption Puzzle?

Question Five.

a)Explain the neoclasscal theory of residential investment?How does it differ from the accelerator theory of investment?

b)Describe briefly the Harrold-Domar economic growth model.

c)Is economic growth rate the same as economic development?

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