Class 12 Macro Economics - Chapter Money and Banking NCERT Solutions | What is a ‘legal tender’? Wh

What is a barter system? What are its drawbacks?

What are the alternative definitions of money supply in India?

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

What is High Powered Money?

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

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

What are the instruments of monetary policy of RBI?

Explain the functions of a commercial bank.

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

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

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 the difference between microeconomics and macroeconomics?

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

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 important features of a capitalist economy?

In the above example, if exports change to X = 100, find the change in equilibrium income and the net export balance.

Distinguish between stock and flow. Between net investment and capital which is a stock and which is a flow? Compare net investment and capital with flow of water into a tank.

Should a current account deficit be a cause for alarm? Explain.

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

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

How is the exchange rate determined under a flexible exchange rate regime?

Give the relationship between the revenue deficit and the fiscal deficit.

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?

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?