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Macroeconomic Theory Analysis LPU solved assignments 1
Q1. Explain whether borrowing constraints increase or decrease the potency of fiscal policy to influence aggregate demand in each of the following two cases.
a. A temporary tax cut.
b. An announced future tax cut [10 Marks]
Q2. How do the life-cycle and permanent-income hypotheses resolve the seemingly contradictory pieces of evidence regarding consumption behavior? [10 Marks]
Macroeconomic Theory Analysis LPU solved assignments 2
Q1.What is meant by the international investment position of a nation, or its balance of international indebtedness? What is its relationship to the nation’s balance of payments?
Q2. What is double-entry bookkeeping? Why does double-entry bookkeeping usually involve an entry called statistical discrepancy? [10 Marks]