Class 12 Macro Economics - Chapter Open Economy Macroeconomics NCERT Solutions | Suppose the exchange rate between the Ru

Differentiate between devaluation and depreciation.

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 are official reserve transactions? Explain their importance in the balance of payments.

Would the central bank need to intervene in a managed floating system? Explain why.

Distinguish between the nominal exchange rate and the real exchange rate. If you were to decide whether to buy domestic goods or foreign goods, which rate would be more relevant? Explain.

Suppose C = 100 + 0.75Y D, I = 500, G = 750, taxes are 20 per cent of income, X = 150, M = 100 + 0.2Y . Calculate equilibrium income, the budget deficit or surplus and the trade deficit or surplus.

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

Differentiate between balance of trade and current account balance.

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

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?

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.

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?

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

Distinguish between revenue expenditure and capital expenditure.

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?

What are the important features of a capitalist economy?

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

What is the difference between planned and unplanned inventory accumulation? Write down the relation between change in inventories and value added of a firm.

In the above question, calculate the effect on output of a 10 per cent increase in transfers, and a 10 per cent increase in lump-sum taxes. Compare the effects of the two.

What are the alternative definitions of money supply in India?

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

Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.

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.

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?

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?