Class 12 Macro Economics - Chapter Money and Banking NCERT Solutions | Do you consider a commercial bank &lsquo

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 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 is High Powered Money?

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’?

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

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?

Explain ‘Paradox of Thrift’.

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?

If inflation is higher in country A than in Country B, and the exchange rate between the two countries is fixed, what is likely to happen to the trade balance between the two countries?

Suppose that for a particular economy, investment is equal to 200, government purchases are 150, net taxes (that is lump-sum taxes minus transfers) is 100 and consumption is given by C = 100 + 0.75Y (a) What is the level of equilibrium income? (b) Calculate the value of the government expenditure multiplier and the tax multiplier. (c) If government expenditure increases by 200, find the change in equilibrium income.

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?

Explain the relation between government deficit and government debt.

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?

Describe the Great Depression of 1929.

What are the important features of a capitalist economy?

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.