wR THE INSTITUTE OF BANKERS, BANGLADESH (IBB) Banking Diploma Examination, December, 2014 JAIBB Principles of Economics and Bangladesh Economy (PBE) Time—3 hours Full marks—100 Pass marks—S0 [N.B.— Figures in the right margin indicate full marks. Answer any five questions.] Marks. (a) nomics is the science of wealth-—Discuss. 8 (b) Why is Economics central to an understanding of the problems 12 of development? Elaborate on the basic economic questions of ‘what’, *how’, and 20 “for whom’. Give specific examples of these questions with respect to the use of'a country’s limited resources. (a) Distinguish between price elasticity of demand and income 10 elasticity of demand. (b) Calculate the price elasticity of demand when the price of a 10 product rises from Tk. 10 to Tk. 15, causing a fall in the quantity demanded of the product from 40 to 30, (a) State the distinguishing features of (i) Perfect competition, 14 (ii) Monopoly, and (iii) Monopolistic competition (b) How does monopoly hurt the interest of common consumers? 6 (a) What should be the major objectives of monetary policy of a. 12 developing country like Bangladesh? (b) Are these objectives attainable at the same time? 8 (a) What are the main functions of a commercial bank? 10 (b) In what ways commercial banks in Bangladesh can help 10 accelerate the country’s economic development? Population is both an asset and, a liability for a country— 20 Critically discuss the statement. (a) Present arguments for welcoming ‘foreign direct investment’ 10 (FDI) in Bangladesh. (b) Suggest measures for attracting more FDI in the country. 10 Distinguish between fixed and flexible exchange rates, stating the 20 merits and demerits of each. . Write short notes on any four of the following > 5x4=20 (a) Vicious circle of poverty; (b) Reserve money; (c) Green banking: (d) Excess liquidity; (e) Terms of trade; () Inferior good. [Please turn over