Macro-Economics Analysis And Policy External Correspondence Economics Paper-II Previous Year Question Paper Year 2005 : IInd Year
Q. 1. How is the equilibrium level of income determined in an economy ? Is this equilibrium always at full employment ?
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Q. 2. An increase in investment leads to a multiple increase in national income. Discuss. Answer :
Q. 3. Distinguish between autonomous investment and induced investment. Explain the factors that determine the level of induced investment. 8, 12
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Q. 4. Does an increase in money supply always lead to a pro-, portionate increase in price level ? Answer :
Q. 5. Write short notes on :
(a) Demand-pull and cost-push inflation;
(b) Measures of money supply used in India.
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Q. 6. How do commercial banks create credit ? What are the limitations to their power of credit creation ?
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Q. 7. Discuss the functions of Central Bank. 20
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Q. 8. Explain the reasons for increase in public expenditure in Indian economy.
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Q. 9. Distinguish between impact and incidence of a tax. Discuss the incidence of a unit tax under perfect competition. 10, 10
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Q. 10. Write short notes on :
(a) Centre-state financial relations in India;
(b) Objectives of fiscal policy in a developing country.
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