1)Using a diagram show and explain the paradox of thrift.
2)Explain briefly the functions of money in economic development.
3)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.
4)How is inflation measured?
5)Explain the causes of:
a)Demand pull inflation.
b)Cost push inflation.
6)How can the following types of inflation be controlled?
a)Demand pull inflation.
b)Cost push inflation.
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