unat- h1.u1.auan Duration: 111.30 min Answer All Questions [52: IS = 30 Marks}. A. Dene procyelical and conntercyclical. Give any one example for each. (3 marks} B. Describe how Keynesian economics is a cyclical phenomenon. Is it leading. lagging. or coincident? proeyclical or counter cyclical? (3 marks) A. Why did the labour supply has positive relation with real wage (positive slop) as visualized by classical economist? (3 marks) B. Dierentiate the reasons for change in investment as visualized by classical economist from new-Keynesian economist. (3 marks] The demand for money is given by Md = SY (0.3 - i). where 3? = 120 and the supply of money is $30. A. What is the equilibrium interest rate? (3 marks) B. If the central bank wants to decrease i by 2%, at what level should it set the supply of money (3 marks} China is a large open economy with an extraordinarily high saving rate. If. as seems likely, there is a decrease in desired saving in the coming years= what eects should we expect to see on China's trade balance (net capital ow), domestic real interest rate. and actual levels of saving and invesnnent'? . (6 marks}