GE: Introductory Macroeconomics

Semester II, Year I

Assignment 1
Time: 60 minutes (40 + 20) Maximum Marks: 15

Instructions:
 The time limit is 60 minutes, which includes the time for downloading the question paper for the
assignment and uploading the answer scripts.
 All questions are compulsory

1. You have been given the following data (base year=2020). (5)

Oranges Cloth Milk Pens Cars

Price Quantity Price Quantity Price Quantity Price Quantity Price per car Quantity
per kg (kg) per (meter) per litre (litre) per (dozen) (in Rs 1000)
meter dozen
2010 4 10 5 10 20 40 120 5 100 10
2020 6 40 15 30 60 20 240 50 500 20
Find the nominal expenditure and real expenditure, for both years. Also find the inflation rate of the
economy.

2. Calculate Private Savings from the following data: (2)

i. Income from domestic product accruing to private sector 4,500
ii. Savings of non-departmental public enterprises 100
iii. NFIA (-) 50
iv. Direct Personal Taxes 150
v. Private Final Consumption Expenditure 2000
vi. Current Transfers from American Government 80
vii. Wages and Salaries 1000

3. Explain how the following transaction will be recorded in India’s BOP accounts: (4)
i. An Indian purchases a Lenovo Laptop during his holiday to America, through his credit card of
Russian Bank for Rs 50000.
ii. An American dined out in Sarvana Bhawan at Connaught Place, and made the payment through
his credit card of a Russian Bank for Rs 5000

4. There are 100 people in an economy. 80 people are in the age group of 15-65 years. 25% of this
group constitutes students who are not allowed to work. 50% of the rest do not want to work. Out of
the remaining, 12 individuals can’t find work. Find the Unemployment Rate for this economy. (2)

5. Explain giving reasons, how the following are treated in National income, and by which method: (2)
i. You are getting Rs 100 extra as pocket money on Father’s Day
ii. Car purchased by the course instructor of GE Introductory Macroeconomics