Explain the concept of asymmetric information in general. Discuss the implications of asymmetric information for the market of deposits, the credit market and the inter-bank market.

[50 marks]

Fractional reserve banking is inherently unstable. Comment.

Explain the IS-LM model?

What are the Differences between New Keynesian economics and New classical economics as they relate to ad-as model?

What is the optimal price cap for a government to impose on a monopoly? Why?

Discuss the effects of a shock that increases oil prices in the AD-AS model. Be sure to explain also the problem of stagflation.

• Discuss the effects of a shock that increases oil prices in the AD-AS model. Be sure to also explain the problem of stagflation.

Show graphically how an increase in US government spending affects the US trade deficit.

Answer All Parts Of The Following Question

A. ) Why, in the absence of technological change, will a county’s steady state growth rate equal its population growth rate?

B.) Show graphically and explain how a decrease in an economy’s depreciation rate will affect both output per worker in that economy and the economy’s long-run growth rate.

• In the New Keynesian Macroeconomics business cycles are driven by demand shocks, while in the New Classical Macroeconomics they are driven by supply shocks. Explain this statement using your knowledge of the AD-AS model.

1. Poverty is mostly a rural phenomenon in many developing countries. In view of this observation, what policies would you recommend for poverty reduction in developing countries.
2. In 1994, the United Nations provided the human security framework as a wider development and security paradigm. Describe any three of the key characteristics of this paradigm that makes it relevant to the contemporary reality.

Assume that investors have a choice between purchasing foreign bonds or domestic bonds. Why does exchange rate volatility cause countries to attempt to keep their interest rates in line with the interest rates of other countries.

Talk about amazon/jeff bezos and how it relates to privilege of the masculine and the ways in which subordination and exploitation are normalized.