QUESTION BANK

National Income Analysis

1) Explain the Circular Flow of National income in a two-sector closed

economy.
2) Explain the Circular Flow of National income in a three-sector closed
economy.
3) Explain the circular flow of National income in an Open economy.
4) What is National income? Discuss the various aggregates of national income.
5) Distinguish between GDP and GNP. Explain each of them at market price
and at factor cost. Of the two which is a better measure of economic welfare?
Why?
6) Write a note on HDI / CPI / GDP Deflator.
7) What is inflation? Explain Demand –pull inflation.
8) What is inflation? Explain Cost-push inflation.

Demand for Money, Supply of Money, Classical Vs Keynesian Economics,

Determination of Income and Employment.

1) Define Money Supply. Explain the constituents of money supply.

2) Examine the Keynesian approach to demand for money.
3) Write a note on Classical approach (Fisher’s) to demand for money.
4) Write a note on Classical Vs Keynesian economics.
5) What is effective demand? Explain using ADF and ASF the point of effective
demand.
6) What is business cycle? What are its features?
7) Discuss the various phases of business cycle?

IS_LM Model

1) Explain the derivation of IS curve? Determine the slope and factors

responsible for shifts in IS curve.
2) Explain the derivation of LM curve? Determine the slope and shape of LM
curve. What will cause the shift in LM curve.

INTERNATIONAL TRADE
1) Explain the gains from trade?
2) Examine the Comparative Cost advantage theory of Ricardo. What are its
limitations?
BALANCE OF PAYMENT

1) Explain the meaning and structure of balance of payment.

2) What is disequilibrium in BOP? What are it causes?
3) Discuss the various monetary measures to correct disequilibrium in BOP.
4) What is foreign exchange market? Explain the determination of flexible
exchange rate?
5) Explain the various functions of foreign exchange market.