Q

a) Consider two economies which differ by the fact that unemployment benefits are given in one economy and not in the other. In which economy is the multiplier larger? Illustrate with the help of a diagram. 6

b) Explain how would following policy taken by the government during current slowdown affect the output in the short run:

The govt. in June launched a rural jobs program named as Pradhan Mantri Garib Kalyan Rojgar Abhiyan, which aimed at creating livelihoods for jobless migrant workers who moved back from cities to their villages during the lockdown. 3

c) What do you think the size of multiplier would have been if this scheme were introduced during the boom in the economy? 3

d) Plot the feasible frontier before and after the change:

d.1) Non-wage income = 10000; wage = 40 rs. per hour ; total time available = 50 hours; total time increases to 60.

d.2) Non-wage income = 0; wage = 500 rs. per hour; total time available = 40 hours; 1000rs. is donated to charity irrespective of earnings. 6

( PRINCIPLE OF ECONOMICS)

( IT IS A 18 MARKS QUESTION PLEASE ANSWER BREIFLY)

( INCLUDE ALL THE NECESSARY POINTS )

( IT IS A BIT URGENT BUT PLEASE KEEP THE ANSWER PRECISE)