MAC25 MMT12 JG

1: Current data on Pakistan shows that the inflation rate is around 7% and rising, and the output gap is negative -- that is, output is greater than potential output. According to the NAIRU conceptual framework, explain why we should pursue tight monetary policy and contractionary fiscal policy.

2. Explain the concept of the unemployment buffer stock, and how it is used to control inflation.

3. Use the Indian and Argentinian experience to discuss some essential elements which are required for the success of a Job Guarantee Program.