Questions and Answers of Macroeconomics Canada In The Global Environment

3. Marginal physical productivity schedule of labour can be derived from the aggregate production function. Do you agree with this statement? If yes, illustrate the derivation of MPPL curve.
2. What is Say’s law? Explain the law in the context of a barter economy and a monetised economy. Do you agree with Say’s law? Give reasons.
1. What is meant by the classical economists and classical economics? Did the classical economists develop any macroeconomic theory?
Depreciation Rs 150 billion Indirect taxes Rs 160 billion Subsidies Rs 40 billion Exports Rs 200 billion Imports Rs 250 billion Net Income from abroad Rs 150 billion
18. From the data given below, calculate (i) GDP at market price, (ii) GDP at factor cost, and GNP.Household Rs 550 billion consumption expenditure Government Rs 250 billion consumption expenditure
17. Write a note on the sectoral and sub-sectoral division of economy for estimation of national income in India.
16. What is double accounting system of accounting?What are the accounts used in national income accounting?
15. What are the methods of estimating national income in India? Name the sectors which are used in estimating national income in India ?
14. Explain factor income method of estimating national income. How is this method different from expenditure method?
13. From the following data, compute (i) real GNP, (ii) GNP deflator, and (iii) implicit GNP deflator, and (iv) rate of inflation.Year Nominal GNP Wholesale PIN(Rs crore) (1993-94 = 100)2002-03
12. What is meant by GNP deflator? What purpose does it serve in national income analysis?
(i) Capital gains.
(h) Unsold stock of the finished goods
(g) Salary of the government officials
(f) State sales tax revenue
(e) Excise revenue
(d) Social security payments
(c) Unemployment allowance
(b) Old age pensions
(a) Depreciation
11. State in case of each of the following items whether they are included in GNP, NNP and personal income.
10. Distinguish between net product and factorincome methods of measuring national income. Why do the two methods yield the same measure?
9. How does the GNP estimate of a closed economy differ from that of an open economy? How is net income from abroad treated in GNP and GDP?
8. Suppose A sells a product to B at Rs 100 and B sells it to C at Rs 150. Finally, C sells the product to D, the final consumer. What is the total value added?
7. Suppose wheat costs Rs 10 per kg., wheatflour costs Rs 12 per kg., and price of bread is Rs 8 per 500 grams. Find value added at different stages of bread production.
6. Explain the concept of value added and the value added method of measuring GNP.
5. What is meant by double counting? How does it affect the measure of GNP? What is the method used to avoid double counting?
4. What are the methods of measuring national income? What conceptual problems are confronted in estimating national income?
3. Explain the difference between final products and intermediates. How does the inclusion of intermediates affect the measure of national income?
(c) Nominal GNP and Real GNP.
(b) NNP and NDP
(a) GNP and GDP
2. Distinguish between:
1. Distinguish between economic and noneconomic production in national income accounting. Why is non-economic production excluded from national income estimates?
5. Net export of goods and services
4. Change in stocks, and
3. Gross fixed capital formation including construction, machinery and equipments,
2. Government final consumption expenditure
1. Private final consumption expenditure including expenditure on (a) durable goods, (b) semidurable goods, (c) non-durable goods, and (d) services.
Does a balanced budget policy result in expansion or reduction in the circular flows?
5. What is the effect of change in personal taxes and the government expenditure on the circular flows of income and expenditure?
2. Describe an economy as circular flows of income and expenditure. What determines the magnitude of the circular flows?
12. What do you understand by macroeconomic policies? What are their objectives in general?List macroeconomic policies and the relevant policy instruments.
11. Distinguish between (i) exogenous and endogenous variables, and (ii) stock and flow variables. What purpose does this distinction between variables serve?
10. What purpose do macroeconomic models serve in economic analysis? How relevant are the models to the real world?
9. Explain the uses and limitations of partial and general equilibrium analyses. What kind of analysis will you use to find market clearing price for automobiles in India?
8. Explain the difference between static analysis and comparative static analysis. Which of the two approaches will you adopt when you compare the Indian and the Chinese economy in the years 2004 and
7. Explain the concept of economic statics and dynamics. How does static analysis differ from dynamic analysis? Which of the two approaches, in your opinion, is superior and why?
(d) none of these.
(c) per unit of time, or
(b) duration of time,
(a) unit of time,
6. A stock variable is related to which of the following?
(i) GNP, (ii) Aggregate expenditure, (iii)Investment, (iv) Capital, (v) Employment, and (vi) Government expenditure.
(b) State whether the following are flow or stock variables.
5. (a) Define the stock and flow variables used in macroeconomics.
4. What are the international economic issues pertaining to macroeconomics? Why and how is the recession in the US economy affecting the Indian economy?
3. Why do the problems of poverty and unemployment often persist in even the fast growing economies? Write your answer in the context of the Indian economy.
2. What is the nature of the inflation problem faced by different countries? What kind of the inflation problem is being currently faced by the Indian economy?
1. What are the major macroeconomic issues which make the subject matter of macroeconomics?What are the major issues related to the growth issue?
(d) how logical and realistic are equations of the model
(c) how accurate and relevant are the data to validate assumptions, and
(b) how consistent are the assumptions with one another,
(a) how realistic are the assumptions of the model,
11. What are the limitations of macroeconomics?What is the usefulness of macroeconomics in spite of its serious limitations?
10. Describe the conditions that led to the emergence and growth of monetarism. What are the major developments during the period marked as Keynesian revolution? Did monetarism succeed Keynesianism
9. Why is the study of macroeconomic theory important for finding solutions to macroeconomic problems related to business decision making?
8. Write a short note on the origin and growth of macroeconomics, highlighting the conditions and the factors that led to the emergence of new macroeconomic theories.
(e) Balance of payment deficits.
(d) Factors and forces of economic fluctuations.
(c) Price and output determination of a commodity.
(b) Determination of the level of economic activities.
(a) Performance of the entire economy.
7. Which of the following do not constitute the subject matter of macroeconomics?
6. How do micro- and macroeconomic paradoxes limit the applicability of microeconomics to explain the behaviour of macroeconomic variables?
5. What are micro and macro paradoxes?Explain with examples.
4. Macroeconomics is both a theoretical and a policy science. Comment.
3. Distinguish between microeconomics and macroeconomics. What is Machlup’s view on micro and macro distinction?
2. What is macroeconomics? What is its subject matter? How is it different from microeconomics?
1. What is economics? Describe the nature and scope of economic science.
Diversifying business, i.e., entering other areas of business, like Tatas diversified from textiles, to steel, to truck production, to tea business, to passenger cars, and now to lakhtakia car
Adding new brands to the existing products and buying foreign brands, etc., for example, as most car and mobile phone companies are doing in the country—most of them are adding new brands to the
Establishing new units or production plants of the company in different areas/regions of the country, for example, Mahindra & Mahindra are planning to set up a new plant in Chennai.
Expanding production infrastructure and increasing production of goods and services currently produced, as most medium and large scale firms and business corporations are doing in India.
Why have fiscal and monetary policies of India been unsuccessful in achieving their goals?
How and to what extent has global recession affected the Indian economy?
What factors made the Indian economy grow at 8-9 percent during 2001-07?
Why did the Indian economy, having achieved an annual average growth rate of 5.6 percent during the 1980s, suddenly sunk deep into an unprecedented economic crisis in 1990-91?
Why had inflation rate risen from 5-6 percent during 2001-06 to 12-13% in 2008?
Why does about one-third—27.8 percent30, to be precise—of the population of India still subsist below the poverty line?
Why are there about 13.10 million people still unemployed29 in India despite five decades of continuous efforts to provide jobs to unemployed labour force?
Why could Indian economy grow at only 3.4 percent p.a. in real terms during the period from 1950 to 1975 in spite of the government’s planned development efforts to achieve an annual growth rate of
The demand deficiency can be removed through compensatory government spending.
The unemployment in any country is caused by lack of aggregate demand and economic fluctuations are caused by demand deficiency.
What economic policies can steer the economy on the path of growth?
How do the monetary and fiscal policies of the government affect the economy?
What causes disequilibrium in the balance of payments of a country?
What determines the level of foreign trade and trade balance?
What determines the general level of prices in a country?
What causes fluctuations in the national output and employment?

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