(one mark question)

cheapecuadorianManagement

Oct 28, 2013 (3 years and 7 months ago)

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FOR AVERAGE STUDENTS


Part


B


MACRO ECONOMICS



UNIT VI: NATIONAL INCOEM AND RELATED AGGREGATES ( 15 MARKS)


(
one mark question)


1.

Is the study of cotton textile industry a macro economic study or micro economic
study?

2.

Two main problems studied in Macr
oeconomics.

3.

Define Macroeconomics.

4.

Two examples of macro economic variables.

5.

Define consumer goods.

6.

What are producer goods?

7.

What are capital goods?

8.

Basic difference between final and intermediate goods.

9.

Define stock and flow.

10.

What is consumption of fixed
capital or deprecation.

11.


state, which of the following is a stock or a flow

a.

wealth


b. cement production


12.

What is investment?

13.

If an economy investment is greater than saving, what is the effect on the national
income.

14.

What are transfer payments?

15.

Define for
ced transfer.

16.

what is real national income

17.

if domestic income is Rs. 500 cr and net factor income from abroad is Rs. (
-
5) cr.
How much will be national income.

18.

when will be domestic factor income greater than national income

19.

Meaning of non
-
market activitie
s.

20.

Which of the following is not included in national income?

i) Old age pension.

ii) Purchase of a new car.

21. What is a GNP deflator?

22.

Define the concept of value added.

23.

Define nominal GDP

24.

Define real GDP

25.

Is net of exports (x
-
m) a part of

net factor income from abroad ?


(3/4 marks questions)


1.


Describe the important features of a capitalist economy.


2.

Describe the great recession of 1929.

3.

What are the 4 factors of production and what are the remunerations to each of
these called ?

4.

Differen
tiate between planned and unplanned inventory accumulation.

5.

What is difference between budget deficit and trade deficit ?

6.

Suppose the GDP at market price of a counting in a particular year was Rs. 100
Cr., Net factor income from abroad was Rs. 100 cr ,the
value of indirect taxes
-

subsidies was Rs. 150 Cr. and national income was Rs. 850/
-

cr. Calculate the
aggregate value of depreciation.

7.

Differentiate between monetary flow and real flow.

8.

What is meant by circular flow of income? Name its 3 related phase
s.

9.

Explain the concept of leakages and injections in the circular flow of income.

10.

Differentiate between private income and personal income.

11.

What is difference between factor inputs and non
-

factor inputs ?

12.

Show as how the sum of value added is equal to s
um of factor income ?

13.

State any 4 precautions while measuring national income by income method.

14.

Find out personal disposable income.


Corporation tax






3 cr.

Misc receipts of Govt.






1 cr.

Direct taxes paid by household




4 cr.

Saving of private c
orporate sector




1cr

Net of retained earnings of foreign companies

Private income






218 cr.


15.

Find out private income from the following

i) Corporation tax






4cr.

ii) Direct taxes paid by households




6cr

iii) Personal disposable income




317 cr
.

iv) Misc. receipts of govt. administrative



02 cr.

v) Saving of private corporate sector net of


retained earnings of foreign companies.



02 cr.



16.

Calculate NDP at MP from the following.

i) Net indirect taxes






38 cr.

ii) Consumption. Of fixed

cap.




34 cr.

iii) Net factor income from aboard




(
-
)3 cr.

iv) Rent






10 cr

v) Profit







25 cr.

vi) Interest







20 cr.

vii) Royalty







5 cr.

viii) Wages and salaries





170 cr.

ix) Employers contribution to social security schemes

30cr


17.

Ca
lculate value added by firm x and firm y


i) Sales by firm x to households





100

ii) Sales by firm y







500


iii) Purchases by households from firm y




300

iv) Exports by firms y







50

v) Change in stock of firm x






20

vi) Change in stock of
firm y






10

vii) Imports by firm x







70

viii) Sales by firm Z to firm y






250

ix) Purchases by firm y from firm x





200


18.

Calculate gross value added of factor cost.

Sales





180

Rent





05

Subsidies




10

Change in stock


15

Purchase of raw
materials


100

Profits





25



19.

State the circular flow of monetary and real flow among 3 sector models of the
economy.


(
06 Marks questions)


1.

Explain the circular flow with 4 sector economy.

2.

Will the following be a part of domestic factor income of Indi
a? Give reasons for
your answer.

i)

Old age pension given by govt.

ii)

Factor income from abroad.

iii)

Salaries to Indian residents working in Russian embassy in India.

iv)

Profit earned by a company in India, which is owned by a non


resident.


3.

Explain the problem of d
ouble counting in estimation of national income by
giving suitable examples and 2 ways of avoiding this problem.

4.

GDP may not be an appropriate index of welfare of the people. How?

5.

From the following data, calculate NNP at Market price by i) Expenditure met
hod
ii) Income method.

1)

Personal consumption exp.





700

2)

Wages and salaries






700

3)

Employers contribution to social security



100

4)

Gross business fixed






60

5)

Gross residential construction investment



60

6)

Gross Public investment





40

7)

Inventory investment






20

8)

Profit.








100

9)

Govt. Purchases of goods and services



200

10)

Rent








50

11)

Exports







40

12)

Imports







20

13)

Interest








40

14)

Mixed income of self employed




20

15)

Net factor income from

abroad




(
-
)10

16)

Depreciation







0

17)

Indirect Tax







20

18

subsidies







10


6.

Calculate (a) Personal Disposable income (b) National Income


1)

Private income






4000

2)

Mixed Income






1200

3)

NFIFA








-
50

4)

Compensation of employee
s




1300

5)

Net retained earnings of private enterprises


200

6)

Profit







800

7)

Rent







600

8)

Corporation Tax





400

9)

Interest







700

10)

Net Indirect Taxes





500

11)

Net exports






-
100

12)

Direct Taxes paid by households



1
50

13)

Consumption of fixed capital




180






















FOR AVERAGE STUDENTS

Part


B


MACRO ECONOMICS


UNIT


08


DETERMINATION OF INCOME AND EMPLOPMENT ( 12 Marks)


One mark questions


1.

Define aggregate demand.

2.

What do you mean by aggregate supply
?

3.

What is effective demand?

4.

What is paradox of thrift?

5.

What do you mean by marginal propensity to consume?

6.

What is marginal propensity to save?

7.

If MPS is .5, what will be the value of multiplier?

8.

If MPC is .8, what is the value of MPS?

9.

Can the value of MPC

be equal of one?

10.

Define Marginal efficiency of capital.

11.

What is consumption function?

12.

What is the saving function?

13.

What is autonomous consumption?

14.

What can be the maximum value of marginal propensity to save?

15.

Define multiplier.

16.

What is excess demand?

17.

Wha
t is deficient demand?

18.

When does a situation of deficient demand arise in an economy?

19.

Find out the value of multiplier when MPS = 0

20.

What does MPC refer to in a diagram showing consumption function or
consumption line?

21.

What happens to an economy, if AD>AS.



(
3 / 4 marks question
)

01.


Find saving function when consumption function is given

c = 1000 + .6y


02.

Show diagrammatically, the effect on equilibrium. Level of output of govt.


spending.


03.

What happens if AD>AS prior to full equilibrium. Level of
output.


04.

Does an excess of AD over AS always imply a situation of inflationary



gap?


05.

Complete the following.


Income



consumption


MPC


APC

1

12

20

26

40

40

60

54


2.

An increase in investment by Rs. 400 cr. leads to increase in national income
by Rs. 1600 c
r. Calculate MPC

3.

In an economy, the marginal propensity to consume is 0.75 Investment is
increased by Rs. 200 cr. Calculate the total increase in income and
consumption expenditure.

4.

i)

If the value of multiplier is 4, what will be MPC and MPS ?

i)

What increa
se in investment is needed to raise income to Rs 2000 cr. if
MPS = 0.5.

5.

Explain any 3 measures by which excess demand in an economy can be
corrected.

6.

Explain the concept of deflationary gap. Explain any two measures by which a
central bank can attempt to r
educe this gap.

7.

What is monetary policy? Explain the role of i) Bank rate and ii) Margin
requirements in influencing the availability of credit in an economy.

8.

What is inflationary gat? What is its impact on output and prices?

9.

What is meant by ‘investment m
ultiplier’? Explain the relationship between
marginal propensity to consume and investment multiplier.

10.

Explain the working of investment multiplier with the help of a numerical
example.

11.

What is the difference between planned investment and realized (actu
al)
investment?


(
06 marks questions
)


01.

Measure the level of ex
-
ante aggregate demand when autonomous investment and
consummation exp. (a) is Rs. 50 cr and MPS is 0.2 and level of income (y) is Rs. 4000/
-

state whether the economy is in equilibrium. or

not. Give reasons.

02.

Given below is the consumption function in an economy



c = 100+.05 y


With the help of a numerical example show that in this economy, as income
increases, APC will decrease.


3.

Calculate i) its equilibrium. Level of national i
ncome ii) saving at equilibrium.
Level of national income when following information about an economy is
given :

Consumption function

c= 200 + 0.9 y

Investment expenditure


= 3000

4.

Give the meaning of excess demand in macro economics. Explain any 4
measur
e in monetary policy to correct it.

5.

Explain the concept of under employment equilibrium. With the help of a
diagram, show the additional investment exp. required to reach full
employment equilibrium.

6.

Explain the working of investment multiplier with the h
elp of a numerical
example.

7.

Draw a diagram a straight line saving curve for an economy. From it, derive
the consumption curve explaining the method of derivation. Show a point on
the consumption curve at which APS is equal to one.

8.

Explain the equilibrium
level of income with the help of saving and
investment curves. If savings exceeds planned investment what changes will
bring about equality between them ?

9.

Explain the theory of determination of income and employment with the help
of AD and AS curves and sa
ving and investment approach.

10.

Differentiate between full employment and under employment equilibrium.
with the help of a diagram.