1. Answer/Choose the correct one of the following: 1x8=8
- To compute GDP, the quantity of each final good and service produced must be weighted by
- Its advertise price.
- Its cost of production.
- Its share of total output.
- Its market price.
- Double counting in the national income accounts will not occur if GDP is computed by summing all
- Sale of final output.
- Sale of final output and intermediate goods.
- Sale of final output and advertising cost.
- All of the above.
- Define the concept of effective demand.
- Marginal propensity to consume can be always between
- 1 and 10.
- 10 and 20.
- 30 and 30.
- None of the above.
- Relative income hypothesis was given by
- Adam Smith.
- Ricardo.
- Milton Friedman.
- James Duesenberry.
- If marginal propensity to save (MPS) is equal to 0.25, what is value of investment multiplier?
- 4
- 4.01
- 4.04
- None of the above.
- Write the name of economists who first developed the concept of IS and LM curve analysis.
- What do you mean by balance of payments (BoP)?
2. Write short notes on any four of the following (within 150 words each): 4x4=16
- Nominal and real GDP.
- Life cycle hypothesis.
- Marginal efficiency of capital.
- Investment multiplier.
- Basic accounting rule.
Answer the following questions (within 500 words each):
3. (a) Explain the different methods of calculating national income. Briefly explain the relationship between GDP and welfare. 8+4=12
Or
(b) Discuss the circular flow of national income model in a two-sector economy. Also discuss its importance and limitations. 7+5=12
4. (a) What are aggregate demand and aggregate supply function? Explain the relevance of classical theory of employment in a full-employment situation in an economy. 4+7=11
Or
(b) Compare the process of determination of aggregate price level in classical approach and Keynesian approach. What are the advantages of Keynesian approach over classical approach in aggregate price determination? 8+3=11
5. (a) What are absolute income and relative income? Explain the relative income hypothesis stating three limitations of the hypothesis. 2+6+3=11
Or
(b) What are induced investment and autonomous investment? Explain the working of the static investment multiplier. What are the leakages of investment multiplier? 2+6+3=11
6. (a) What are produce market and money market? Explain the determination of equilibrium income and interest rate with the help of IS and LM curves. 4+7=11
Or
(b) What do you mean by monetary and fiscal policies? Examine the effectiveness of monetary and fiscal policies in IS and LM frameworks. 2+9=11
Also Read: Dibrugarh University Question Papers
7. (a) Distinguish between balance of payments (BoP) and balance of trade (BoT). “BoP is always balanced in accounting sense.” Explain the meaning of the statement. 4+7=11
Or
(b) What do you mean by equilibrium and disequilibrium of BoP? What are the steps that may be taken to remove the deficits in the BoP? 6+5=11
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