Hourly Exam Spring-2021

Department of Business Administration

Subject: Macroeconomics Submission Day: Monday

Instructor: Rahmat Ullah Submission Date: April 05, 2021
Program: BBA Max. Marks: 15

Please follow the instructions carefully:

• Write your answers directly on the Black Board (recommended) or upload word file/pdf
before the due date on Blackboard.

• Write your name and registration ID on the first page of your Word file.

• Answer scripts can only be uploaded on Blackboard only during the submission time.

• To avoid any unforeseen problems, you are advised to follow the Guide lines
communicated by the Faculty Members.

• Submission of answer copy (ies) will be considered acceptable through Blackboard only.
Therefore, do not submit your document through email or any other medium.

• Use 12 pt. font size and Times New Roman font style along with 1-inch page margins.

• Follow the requirements of the word limit and the marking criteria while writing your
answers.

• Provide relevant, original and conceptual answers, as this exam aims to test your ability to
examine, explain, modify or develop concepts discussed in class.

• Do not copy answers from the internet or other sources. The plagiarism of your answers
may be checked through Turnitin.

• Double check your word file before uploading it on Blackboard to ensure that you have
uploaded the correct file with your answers.
Important Instructions:
1. First login to your blackboard Account.
2. Click on 1st Hourly Exam Paper-2021 which is available on left side of main screen of
blackboard.
3. Download your paper or write directly on the blackboard.
4. Solve on the same downloaded MS word document or scan and make pdf if handwritten and
then submit your work on black board.
5. Duration: April 5th, 2021 (06:30 PM to 07:40 PM)
6. Total number of attempts allowed: 1
7. Note: There is no need of details. Therefore, there is no requirement of words limit. Your answer
should be concise and must cover the requirement.

Macroeconomics
Note Attempt all of the following questions. (60 Minutes) Max Marks
15

Question 1: Marks (05)

The GDP is the market value of all final goods and services, produced in the economy during a
year. GDP is a better idea to visualize domestic production in the economy. GDP may be derived
in three ways or in combination of them.
• Production Approach: It measures the contribution to output made by each producer.
• Income Approach: In this approach, consideration is given to the costs incurred by the
producer within his own operation, the income paid out to employees, taxes (less
subsidies) on production, consumption of fixed capital, and the operating surplus. 
• Expenditure Approach: This approach looks at the final uses of the output for private
consumption, government consumption, capital formation and net of imports &
exports.
We have discussed expenditure approach in general for GDP calculation. Based on this
approach, in Pakistan GDP is calculated as:

GDP = Final consumption + Gross capital formation + Exports – Imports

If “Y” represents gross domestic product, “C*” represents the final consumption, “I+G*”
represents gross capital formation and “NX” represents the net exports.
Imports of goods and services were USD 56.532 Billion while exports were USD 28.153Billion.
Population of Pakistan was 216,565, 318 in 2019. Gross capital formation was USD 43.433
billion.
Billions (USD) % of GDP Per capita (USD)

Y 100.0
 C 263.168 95
I+G 43.433
NX

Required:
Using the given data, fill the above table related to GDP calculation for Pakistan (2019).

Question 2:
Marks (05)

Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
CPI* 100 111.92 122.75 132.19 141.70 145.28 150.75 156.91 164.88 182.32
Inflatio
n

Considering 2010 as the base year and using data given in the above table
Required:
Calculate inflation rate for each year (2011-2019) and fill the given table.

Question 3:

Prices and Quantities

Wheat Rice
Year Price of Wheat Quantity of Wheat Price of Rice Quantity of Rice
2018 PKR 60 100 PKR 50 50
2019 PKR 70 200 PKR 60 150
2020 PKR 80 300 PKR 70 250

Required:
• Marks (03)

• Nominal GDP
• Real GDP and
• GDP deflator
• Marks (02)
State two major differences between CPI and GDP deflator.
difference between cpi gdp
The CPI measures price changes in goods and services purchased out of pocket by
urban consumers, whereas the GDP price index and implicit price deflator measure
price changes in goods and services purchased by consumers, businesses, government,
and foreigners, but not importers