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May 19, 2016

)How can the following types of inflation be controlled? a)Demand pull inflation. b)Cost push inflation.

1)Using a diagram show and explain the paradox of thrift.
2)Explain briefly the functions of money in economic development.
1)Given the following information:

S=-11+0.16Y MDTP=50+2Y
T=5+0.2Y MDS=80-10r
I=5+5.5r MS=380
G=7 MDTP=Money demand for transactions and precautionary purposes.
MDS=Liquidity preference
MS=Money supply

i)Derive the IS and LM.
ii)Interpret the IS and LM functions derived.
iii)What factors can cause a shift in the IS curve and how.
iv)What factors can cause a shift in LM curve and how.

3)How is inflation measured?
4)Explain the causes of:
a)Demand pull inflation.
b)Cost push inflation.

5)How can the following types of inflation be controlled?
a)Demand pull inflation.
b)Cost push inflation.

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