36,610 questions & answers

What is the difference between ex ante investment and ex post investment?

Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (A) is Rs 50 crores, and MPS is 0.2 and level of income (Y) is Rs 4000 crores. State whether the economy is in equilibrium or not (cite reasons).

What is ‘effective demand’? How will you derive the autonomous expenditure multiplier when price of final goods and the rate of interest are given?

What do you understand by ‘parametric shift of a line’? How does a line shift when its (i) slope decreases, and (ii) its intercept increases?

What is marginal propensity to consume? How is it related to marginal propensity to save?

What role of RBI is known as ‘lender of last resort’?

What are the instruments of monetary policy of RBI?

Do you consider a commercial bank ‘creator of money’ in the economy?

What is money multiplier? What determines the value of this multiplier?

What is High Powered Money?

Explain the functions of a commercial bank.

What are the alternative definitions of money supply in India?

What is a ‘legal tender’? What is ‘fiat money’?

What are the main functions of money? How does money overcome the shortcomings of a barter system?

What is transaction demand for money? How is it related to the value of transactions over a specified period of time?

What is a barter system? What are its drawbacks?

Write down some of the limitations of using GDP as an index of welfare of a country.

In a single day Raju, the barber, collects Rs 500 from haircuts; over this day, his equipment depreciates in value by Rs 50. Of the remaining Rs 450, Raju pays sales tax worth Rs 30, takes home Rs 200 and retains Rs 220 for improvement and buying of new equipment. He further pays Rs 20 as income tax from his income. Based on this information, complete Raju’s contribution to the following measures of income (a) Gross Domestic Product (b) NNP at market price (c) NNP at factor cost (d) Personal income (e) Personal disposable income.

The value of the nominal GNP of an economy was Rs 2,500 crores in a particular year. The value of GNP of that country during the same year, evaluated at the prices of same base year, was Rs 3,000 crores. Calculate the value of the GNP deflator of the year in percentage terms. Has the price level risen between the base year and the year under consideration?

Define budget deficit and trade deficit. The excess of private investment over saving of a country in a particular year was Rs 2,000 crores. The amount of budget deficit was ( – ) Rs 1,500 crores. What was the volume of trade deficit of that country?