This question paper comains 3 printed pages. 526 Youur Rall No. Subsidiary for Honours Courses AC ECONOMICS - Paper IL [Macro Economics : Anslysis and Policy| Time : 3 hours Marinsum Marks 100 (site your Roll No. on the top inumediaely on receipt of this question paper) Note :~ Answers may be written either in English or in Hindi; but the same medium should be used throughout the paper. Reh — 7 weer aor are seat ar Reh AeA Gar en 2 eI airs eel sen) ar meas ew) Ben eae Attempt FIVE questions in all. selecting 41 least two questions from each Section. Alll questions curry equal marks. Poel aa eat & ere ere) Re sek eas a) am 9 aH eb sre afar By wh ead 3 sian wom BY Section -A 1 Using suitable diagrams explain the determination of equilibrium level of income with the help of (i) Aggregate demand. aggregate supply approach (i) Saving investment equality approach fret tenferat wr sitet area Ee (WR ahr eee OA gfeatnr, sik @) Waa Pree waa, gReatr aA wera B ona S ager tae aie a aren wife! 7, 7% 2. a) Explain the process of income generation with the help of investment multiplier showing its relationship with ‘marginal propensity to consume, b) _Ifinvestment increases by rupees 1000cr and the value of marginal prospensity to save (MPS)is !, what will @) be the total increase in income ? Rae a ears ort ug S wer war ere we EL TH A werac A wa YOM &h ofan a are wife | afe Faw ¥ 1000cr Go a gfe ef @ six Wart aaa waft & at wa 4 |e fort fee arf ? . 12.03 5261(500) uya) b) Evaluate Fisher's approach to the relationship between Quantity of Money and Price level. If the money supply in Fisher's equation is reduced to one half (4 } other variables remaining constant, what will be its effect on the value of money: (eo) ger ah gf otk ara sae S dla ena & Pye Hi free afer a wher wR (es) a) b) °) () @) @) a) ) @) @) a » (@) @ a) by @) afe fier & woe A yer at ft ot omen oe Rar Ge dl ora oer TAR AR ST yal & yea we aay gee etm ? 12,03 Distinguish between Inflation and Deflation. Explain the effects of inflation on (i) Fixed income groups (i) Debtors and auditors. Ismild inflation beneficial foreconomic growth ? wT car ores A are ETE AP | wht 3 Par ra at aren afer (@) fea ora wt di) Feo gen Ferrer TF Bar Bea VHS anlar eons ¥ ores @ ? 06, 06.03 * Explain the following. )— Money and Near Money i) Demand for money forspeculative motive. Pre at coe affine © gain Prac WRT @ | Wer Ste & fee gar a aT Section -B Discuss the main functions performed by a commercial bank. Do you think that quantitative methods are adequate for an effective control of credit, Examine. ye ame fp gre fey wy wAE ara a ae ase) ame far 4 gar Romer ver Perso & afte werd & 2 area Ay 07.08 Explain the main items on the Assets and Liability side of the balance sheet of a commercial bank Why should acommereial bank try to minimize cash holdings with it? we anne aa & qe va 4 aftenafeal cen afer & ae A qea vet a crea Are) arate a ot ore aadh toh ot am 8 wa wet on gare gai area afey 10, 05 Differentiate between Impact and Incidence of a tax. Explain the conditions under which a Per unit tax under perfectly competitive market can be shifted (@ —Partlyonthe consumers Gi) Wholly onthe consumers ues sik arora 4 ora ere wifsig '526/(500) @9. (@ sr aRRaftat A aren aiftre Bird otra get afeetfrar arene A of garg a aT AR @ ge Shr oe oom we cet oT waa 8) i) ira sedis ue eT OT wa By 05, 05, 05 2) Explain how the Central Bank ofa country is lender to the last resort b) Discuss briefly the developmental functions of Reserve Bank of'India inthe fields of agriculture and industry. (@) we 2u on data ae fre ver ore Foor & ? ae TTL (a) anda Rad te S pf cen vet FAs 4 foe ay flere oral A vas F are apifary | 05,10 Write short notes on © Principlesof Public Expenditure (i) Difference between monetary and fiscal policy viftra feaphy ferry @ adore aad ye Ret Gi) hfe afte womens fa H ore 74, 7% 526((500) ()