Macro Economics

M.A (FINAL) EXTERNAL ANNUAL EXAMINATION

MACRO ECONOMICS (PAPER - I)

1997

Time allowed: Three Hours                    Maximum Marks: 100

Instructions: 1) Attempt any five questions.

2) All questions carry equal marks.

3) Draw the diagram wherever necessary

1. In what respect Keynes criticized the Classical Theory of employment?

2. Explain the Permanent Income Hypothesis of Consumption.

3. Explain the Theory of Consumption function given by Keynes.

4. a) What is GNP? How can it be measured according to expenditure approach?

b) Given the following Set of Information from National Income account of a hypothetical economy, find out GNP, NNP and NI.

Description                                    In million Rs.

Capital consumption allowance                1,800

Indirect tax                                                1,600

Gross investment                                      2,400

(Export-Import)                                             70

Consumption expenditure                       10,800

Government expenditure                          3,650

5. Explain the concept of Multiplier with suitable example. What is the relationship between Multiplier and MPS (Marginal Propensity to save)?

6. What is meant by Demand Pull and Cost Push Inflation? Explain.

7. Briefly discuss the main determinants of Investment Spending.

8. Critically examine Keldor’s Model of Business Cycle.

9. Write short notes on any Two of the following

(i) IS-LM Curves

(ii) Phillips Curve

(iii) Balanced Budget Multiplier

 

1998

1. “In one context, saving and investment are necessarily equal while in another they are often unequal”. Explain this apparent contradiction?

2. State and explain the Liquidity Preference theory as stated by J.M Keynes?

3. a) State and explain in your own words why measuring gross domestic product (GDP) in real terms is important?

b) Explain different methods for measuring gross product.

4. Discuss the classical theory of employment with its assumptions? What the shortcomings of the theory are as pointed out by J. M. Keynes?

5. State and explain the importance of Harrod-Domar Model in the economic growth?

6. Define LM curve and show how it is derived? Explain in which direction and why LM curve shifts when there is:

a) An increase in Money Supply

b) A decrease in Money Supply.

7. State and explain Say’s Law? What are its limitations? Does it apply to barter economy only? Give reasons?

8. Explain Hicks Theory of business cycle with given emphasis on the role of Multiplier and principle of acceleration. Why does accelerator become ineffective in the down swing?

9. Briefly explain “Monetarist” contribution to Macro Economics.

9. Write short notes on any two of the following:’

a) Marginal efficiency of Capital

b) Keynesian theory of interest

c) Induced investment.

 

1999

1. a) State and explain Say’s Law of the market. What obstacles are met if we introduce (i) Money (ii) Savings, In barter economy for which Say’s Law hold?

b) The classical theory has used the Quantity Theory of Money for various purposes. Explain each purpose with its underlying assumptions.

2. Compare the effects of an increase in money supply in the classical and Keynesian models.

3. How did Keynes attach the classical doctrine? Explain his criticism on major classical theories.

4. In a simple IS-LM model are there circumstances when fiscal policy is totally ineffective in raising GNP? Explain.

5. How do firms make decision regarding purchases capital goods overtime? Explain using the theory of marginal efficiency of Capital.

6. Define and derive LM-Curve. Explain the position of the LM-Curve. When and how will LM-Curve shift?

7. Compare the Absolute Income and Permanent Income theories of consumption..

8. a) What are the fundamental sources of Economics growth? Explain with respect in the Harrod-Domar and Neo-Classical Growth Models

b) Explain the “Razor Edge” problem and its essence. Why doesn’t this problem replicate itself in the Neo-Classical Mode1?

9. If consumption is determined by the level of income, while investment is determined by the change in income form the previous period, how will you explain fluctuation in GNP?

10. Write notes on any two of the following:

a) Expenditure approach to measuring GNP

b) Classical theory of Aggregate Supply

c) Types of Equilibrium Analysis

 

2000

1. What are the expenditure components of GDP? What are income components?

2. What would effects of Credit card on output level, employment level and price level in the classical model?

3. What are the contributions of Irving Fishers and Cambridge School in Quantity Theory of Money? What are the major differences between them? Why quantity theory of money is partially true? What alternate do you suggest?

4. What do you understand by inflation? What are the economic and social consequences of inflation?

5. Show how the slopes of the IS and LM curves determine the effectiveness of of fiscaI policy?

6. What is Harrods growth model? What is Domar growth model? Why economists plugged these two growth models in one model? i.e. Harrod-Domar growth model.

7. What are two main components of business cycle? Describe these two components for the real business cycle theory?

8. What does the rational expectations hypothesis imply about the ability of government to reduce inflation without causing unemployment?

9. Explain the permanent income theory of consumer behavior. Compare the permanent income hypotheses with the life cycle theory

 

2001

1. In what respect the Keynes criticized the Classical Theory of employment?

2. Explain the concept of Multiplier with suitable example. What is the relationship between Multiplier and MPC (Marginal Propensity to Consume)?

3. State and explain the Liquidity Preference Theory.

4. Explain different methods for measuring Gross Domestic Product.

5. State and explain Say’s Law. Does it apply to barter economy only? Why?

6. Discuss the Harrod-Domar growth model with reference to the economic growth.

7. In one context, Saving and Investment are necessary equal while in another they are often unequal. Explain.

8. Critically examine Kaldor’s model of business cycle.

9. Write short notes on any two of the following:

(a) Philips Curve

(b) Balanced Budget Multiplier

(c) Marginal Propensity to Save

 

M.A. (FINAL) EXAMINATION 2016 HELD IN 2017

ECONOMICS (PAPER 1)

MACRO ECONOMICS

Time: 3 hours                                           Max Marks: 100

 

Instructions

1) Attempt any FIVE questions

2) All questions carry equal marks

 

Q1          Explain different methods of measurement of GDP.

Q2          “Money is more important in Keynesian system than in classical system.” To what extent do you agree? Explain

Q3          What are the major factors that determine the output and Employment level in classical model? What role does aggregate demand has in determining output and employment?

Q4          In Solow growth model how does the savings rate affect the steady-state rate?

Q5          (a) In the simple Keynesian model, an increase in autonomous expenditure will cause equilibrium income to increase by multiple of this increase. Elaborate

(b) Explain by open economy multiplier is smaller than the closed economy multiplier

Q6          What factors determine the slope and shifting of IS and LM curves? Explain

Q7          Analyze the effect of a reduction of income tax on labor market equilibrium and the aggregate supply of output in the classical model

Q8          Write short notes on any TWO of the following

i) Relationship between inflation and unemployment

ii) Quantity theory of money

iii) Permanent income hypothesis of consumption

iv) Liquidity trap

M.A. (FINAL) EXAMINATION 2017 HELD IN 2018

ECONOMICS (PAPER I)

MACRO ECONOMICS

Time: 3 hours                                                  Max Marks: 100

 

Instructions:

(1) Attempt any FIVE questions

(2) All questions carry equal marks

 

Q1          (a) What is Gross Domestic Product? What are the three approaches to its calculation? Why we get the same answer through all these approaches?

(b) What is Gross National Product? Explain the difference between nominal and real GDP. How can we calculate real GDP?

Q2          Derive the aggregate demand curve using the equilibrium of the money market and goods market

Q3          (a) Define and explain how we calculate the marginal propensity to consume and the marginal propensity to save

(b) If real GDP and aggregate expenditure are less than equilibrium expenditure, what happens to farmer’s invention? How do firms change their production?

Q4          What are the major components of government outlets? What are the major sources of government revenues? Explain how fiscal policy affects the overall economic activity?

Q5          (a) What is production function? What factors shift a nation's production function overtime? The slope of production function is positive but it declines over the time. Why?

(b) Define full employment level of output. How full employment level of output is affected by increase in labor supply by a beneficial supply shock?

Q6          What are the causes of the unemployment in a market economy? What are the policy measures that may be used to reduce the scale of this problem?

Q7          Write short notes on any two of the following

i) Money multiplier

ii) Phillips curve

iii) Government budget deficit

M.A. (FINAL) EXAMINATION 2018 HELD IN 2019

ECONOMICS (PAPER I)

MACRO ECONOMICS

 

Time: 3 hours                       Max Marks: 100

 

Instructions

1) Attempt any five questions

2) All questions carry equal marks

 

Q1          (A) Using National Income Accounting Framework explain the circular flow of income / expenditure considering the case of a four sector economy.

(B) Explain the concept of injections and leakages in the circular flow of national income. How do you think they affect the equilibrium?

Q2          (A) Explain the concept of production function. What will happen to the total production of a country if the amount of labor is increased by keeping everything else constant?

(B) Compare the concepts of actual and potential GDP. How will they differ if the economy reaches to the full employment level?

Q3          (A) What is business cycle? Draw a hypothetical graph of business cycle labelling the 5 phases of the cycle

(B) Explain what is happening during each phase of the cycle with output, employment and inflation?

Q4          (A) Explain the concept of aggregate demand curve. Also draw a graph of an aggregate demand curve and explain the reasons for its slow.

(B) Why long run aggregate supply curve is vertical? Explain.

Q5          Define what the multiplier is and explain how and why it works.

Q6          Discuss the difficulties of controlling inflation. Should government aim at controlling inflation even though it may cause recession in the economy?

Q7          What are the major components of government outlets? What are the major sources of government revenues? Explain how fiscal policy affects the overall economic activity.

Q8          Explain the concept of monetary policy. Also discuss the effects of an increase in interest rate on economy.