Rational Expectations

Explain how IS and LM curves are derived. What are the implications of IS and LM curves?

What are the factors on which the shape of the IS and LM curves depend?

Rational Expectations

An economy with fixed exchange rate cannot maintain an independent monetary policy. Do

you agree with the above statement? Substantiate your answer with appropriate diagrams.

What does the Phillips curve signify? How do you reconcile the difference in the shape of the
curve in the short run and the long run?

2. Explain how IS and LM curves are derived. What are the implications of IS and LM curves?

What are the factors on which the shape of the IS and LM curves depend?

What is meant by endogenous growth? Explain the main features of endogenous growth

models.