8 THE INSTITUTE OF BANKERS, BANGLADESH (IBB) Banking Diploma Examination, May, 2016 . JAIBB Principles of Economics and Bangladesh Economy (PBE) Time—3 hours Full marks—100 Pass marks—S0 IN.B.—The figures in the right margin indicate full marks. Answer any five @ (b) (@ @ @ () © @ ® (@ ) @ @) questions.] Define Economics after Alfred Marshall and discuss the importance of Economics in our day to day life. Discuss the importance of Statistics in the study of Economics, Distinguish between Microeconomics and: Macroeconomics. State and elaborate the main macroeconomic goals of Bangladesh. _ Define supply and indicate the factors that influence supply. Illustrate why the supply curve slopes upward to the right. State if there are any exceptions to the law of supply. State and explain the law of diminishing maginal utility and discuss its limitations. Show the relationship between the law of diminishing marginal utility and the law of demand. What do you mean by a consumption indifference curve? What are ‘the characteristics of a consumption indifference curve? Show how a consumer maximizes his satisfaction with the help of an indifference curve. What are the main features of perfect competition? Illustrate with the help of a diagram how the price-output equilibrium under prefect competition is superior to that under monopoly from the points of view of the interest of consumers. Marks 12 10 [Please turn over7. Marks (2) Compare and contrast “Absolute advantage” and 8 “Comparative advantage” in the light of Ricardo’s theory of international trade. (b) Why do economists oppose protectionist policies that limit 12 trade among countries? (@ Explain the concepts of (i) Balanced budget, (i) Surplus 10 budget and (iii) Deficit budget. (b) Which type of budget do you recommend for Bangladesh 10 and why? (a) \dentify the components of money supply. 4 (b) How will the following actions affect money supply? 4x4=16 () A reduction in the bank rate; (ii) An increase in the cash reserve requirement; (iii) Bangladesh Bank purchases government securities from commercial banks; and (iv) Government sells newly issued bonds to commercial banks. ~ Write short notes on any four of the following :— 5x4=20 (a) Specialized banks; (b) Terms of trade; (c) Opportunity cost; (a) Returns to scale; (e) Iso-product curve; @ Inferior good. . .