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?
Considering the equation of a straight line as
b = ma + ÃŽÂμ
Where m = slope of straight line, m > 0
ÃŽÂμ = intercept on vertical axis, ÃŽÂμ> 0
Also, when a increases by 1 unit, the value of b increases by m units.
The parameters ÃŽÂμ and m are parameters of a graph.
As the value of m increases, the straight line rotates upward around the same vertical intercept. This movement is an example of parametric shift of the graph.
(i) A straight line rotates downward around the same vertical intercept as its slope decreases.
(ii) A straight line shifts parallelly upward when its intercept increases.
Explain ‘Paradox of Thrift’.
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 is marginal propensity to consume? How is it related to marginal propensity to save?
Explain why public goods must be provided by the government.
Differentiate between balance of trade and current account balance.
What are the four factors of production and what are the remunerations to each of these called?
What is a barter system? What are its drawbacks?
What is the difference between microeconomics and macroeconomics?
Distinguish between revenue expenditure and capital expenditure.
What are official reserve transactions? Explain their importance in the balance of payments.
Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.
What are the main functions of money? How does money overcome the shortcomings of a barter system?
What are the important features of a capitalist economy?
‘The fiscal deficit gives the borrowing requirement of the government’. Elucidate.
Would the central bank need to intervene in a managed floating system? Explain why.
Discuss the issue of deficit reduction.
Give the relationship between the revenue deficit and the fiscal deficit.
Suppose C = 40 + 0.8Y D, T = 50, I = 60, G = 40, X = 90, M = 50 + 0.05Y
(a) Find equilibrium income. (b) Find the net export balance at equilibrium income (c) What happens to equilibrium income and the net export balance when the government purchases increase from 40 and 50?
What is the marginal propensity to import when M = 60 + 0.06Y? What is the relationship between the marginal propensity to import and the aggregate demand function?
Distinguish between revenue expenditure and capital expenditure.
Write down the three identities of calculating the GDP of a country by the three methods. Also briefly explain why each of these should give us the same value of GDP.
Differentiate between devaluation and depreciation.
Suppose the GDP at market price of a country in a particular year was Rs 1,100 crores. Net Factor Income from Abroad was Rs 100 crores. The value of Indirect taxes – Subsidies was Rs 150 crores and National Income was Rs 850 crores. Calculate the aggregate value of depreciation.