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QUESTION BANK MACRO ECONOMIC POLICY & ANALYSIS Question Paper Set 01: Q1.

What components of Macroeconomics would help a manager in his decision making? Explain the importance and relevance of various macroeconomic indicators used in Macroeconomic analysis. Q2. Define National Income? What are the various methods of measuring the National Income of an economy? What are the difficulties in measuring National Income and what care must be taken to calculate National Income? Q3.Graphically derive the Aggregate Demand Curve. What are the factors responsible for the movement and shift of the Aggregate Demand Curve? Q4. Define Inflation. Is Inflation always bad? How can Inflation be classified? Q5. How can the Monetary Policy help in achieving the Macroeconomic goals? What are the various tools of the Monetary Policy? Q6. Write short notes on: a. b. c. d. e. Automatic Stabilizers. Real vs. Nominal GDP Shape of the Aggregate Supply Curve. Recommendations of the Tarapore Committee. IMF

Question Paper Set 02: Q1. Why should different countries engage in International Trade? What are the gains of International Trade? Comment on the Gold Standards. Q2. National Income measured by the Income Method, Product / Output Method and the Expenditure Method must always be the same. Do you agree with this statement? Justify your answer. Q3.Graphically explain the concepts of Demand Pull and Cost Push Inflation. Comment on the measures to control Inflation. Q4. Explain the interdependence of the Goods Market and the Money market by using the ISLM curve model. Q5. What are the various objectives of the Fiscal Policy? Explain the terms Capital & Revenue Budget alongwith their components. Q6. Write short notes on: a. b. c. d. e. Stagflation Net Indirect taxes Constituents of the World Bank Balance of Trade Fixed vs. Floating Exchange rates

Question Paper Set 03: Q1. Explain the Circular flow Model of Income and Expenditure. How does it form a conceptual framework of Macroeconomics? Q2. Assuming the MPC of an economy to be 0.8, by how much will its National Income increase if there is an increase in the Investment by Rs.5,000 crores? Graphically explain the concept of the Investment Multiplier. Q3. Explain the derivation of the Consumption function C = a + by and the Saving function S = -a + Y (1-b). Q4. Trace the history of international financial settlements with respect to the Gold Standards, Bretton Woods System and the Floating exchange rates system. Q5. A nation must cautiously move towards full convertibility of the Capital Account Do you agree to this statement? Justify your answer. Q6. Write short notes on: a. b. c. d. e. CRR, SLR & Repo Rate. Revenue expenditure and Capital expenditure. Marginal Propensity to Spend (Z) GDP at Market Price vs. GDP at Factor cost Functions of Money.

Question Paper Set 04: Q1. Why does an economy experience fluctuations in its economic activities called as Business Cycles? How can the Monetary Policy help an economy achieve its macroeconomic objectives? Q2. Classify Inflation with the reasoning of each type of Inflation. Q3. Explain the equilibrium GDP determination by using the Aggregate Expenditure Approach. Q4. Even though the WTO was established in 1995, it is not as young. Its origins can be found in the year 1944 at the Bretton Woods Conference in USA. Trace the history of WTO and explain its main functions. Q5. Graphically explain the Floating Exchange rates mechanism. On the same graph explain how the floating exchange rates can be converted to the fixed exchange rates by the intervention of the Central Bank. Q6. Write Short notes on: a. b. c. d. e. Money Multiplier. Three reasons for Demand of Money. Impact of taxes and subsidies on National Income Accounting. Determinants of Investments. Difference between Domestic Trade and International Trade.

Question Paper Set 05: Q1. Graphically explain the Money Market equilibrium. Q2. Equilibrium National Income and Rate of Interest of an economy are jointly determined by the two interdependent Goods and Money market. Explain this sentence with the help of the ISLM curves model. Q3. The Aggregate Supply curve is flatter towards the beginning, then upward sloping and near vertical in the end. What are the reasons for this unique shape of the AS curve. What are the reasons for the movements and shifts of the AS curve. Q4. What lessons were learnt by the world from the South East Asian crisis? How has India approached the Convertibility of its Capital Account? Q5. What are the components of the Balance of Payments account? Why does the Balance of Payment account always balance? Q6. Write short notes on: a. b. c. d. e. Reserve Bank of India. Five sectors of an economy. Inflationary Gap. FDI vs. FPI GDP Deflator.