Subject - Business Economics II (Macroeconomics)

Level - BBS Year II

Brief Answer Question 10*2 =20
Attempt all questions.
1) What are the importance of the macroeconomics ?
2) Calculate the equilibrium level of national income when consumption function is
50+0.75Y and investment is 300 million.
3) Define cyclical and frictional unemployment.
4) Write any five advantages of globalization.
5) Derive IS equation from AD=AS approach.
6) Define Philips curve.
7) Write any three difference between money market and capital market.
8) What are the components of government budget.
9) What are the causes of inequality in Nepal, write any five points.
10) What is 'Deflationary Gap' ?

Descriptive Answer Questions. 10*5 = 50

Attempt any five questions.
11) How rate of interest and income level determines in the money market ?
12) From the following data calculate the GNPMP by expenditure and income method.

Headings Amount in billion

Compensation to employees 400
Interest rate 30
13) How Undistributed profit 5
labour market
achieve Corporate tax 10 full
Consumption of fixed capital 10
Private final consumption 400 employment
under expenditure classical theory
Net factor income from aboard -10
of Rent 20 employment ?
Net indirect taxes 50
Government final consumption 100
expenditure
Net Exports 10
Dividends 45
Net domestic capital formation 50
 14) Explain the depression and recovery phases of business cycle. How you suggest to
control business cycle by the monetary policy ? (6+4)
15) The level of income and consumption for over six years time period is given in the
table.

Time Period T1 T2 T3 T4 T5 T6

Income 0.00 1.00 2.00 3.00 4.00 5.00

Consumptio 3.00 3.25 3.50 3.75 4.00 4.25
n

a) Determine saving, MPC and MPS from given data. (5)

b) Estimate the linear consumption and saving function according to data. (5)
16) Define deficit financing and explain its objectives.

Analytical Answer Questions 15*2 = 30

Attempt any two questions.
17) What is investment multiplier ? Explain the income generation process of investment
multiplier. (7+8)
18) Define exchange rate. How equilibrium exchange rate is determine under pegged and
floating exchange rate system ? (3+12)
19) What are the causes of poverty ? Suggest remedies to alleviate poverty in Nepal. (7+8)