{"id":1264,"date":"2021-03-23T13:06:14","date_gmt":"2021-03-23T07:21:14","guid":{"rendered":"https:\/\/bcisnotes.com\/secondsemester\/?p=1264"},"modified":"2021-03-23T13:06:14","modified_gmt":"2021-03-23T07:21:14","slug":"pokhara-university-spring-2016-introductory-macroeconomics","status":"publish","type":"post","link":"https:\/\/bcisnotes.com\/secondsemester\/question-bank\/pokhara-university-spring-2016-introductory-macroeconomics\/","title":{"rendered":"Pokhara University|| Spring 2016 Introductory Macroeconomics ||"},"content":{"rendered":"
Spring 2016 Introductory Macroeconomics<\/h5>\n

This is the question set along with the answers of Spring 2016 Introductory which was taken by the Pokhara University (PU).<\/h3>\n

POKHARA UNIVERSITY<\/p>\n

Spring 2016 Introductory Macroeconomics<\/p>\n\n\n\n\n\n\n
Level:\u00a0 Bachelor<\/td>\nSemester \u2013 Spring<\/td>\n\u00a0Year: 2016<\/td>\n<\/tr>\n
Programme: BBA\/BBA-BI\/BBA-TT\/BCIS\/BHCM<\/td>\nFull Marks: 100<\/td>\n<\/tr>\n
Course: Introductory Macroeconomics<\/td>\n\u00a0Pass Marks: 45<\/td>\n<\/tr>\n
\u00a0Time:\u00a0 3hrs.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n\n\n\n\n
Candidates are required to give their answers in their own words as far as practicable.<\/em><\/td>\n<\/tr>\n
The figures in the margin indicate full marks.<\/em><\/p>\n

Section “A”<\/strong><\/p>\n

Very Short Answer Questions<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/em><\/td>\nAttempt all the questions.<\/strong><\/td>\n10×2<\/em><\/td>\n<\/tr>\n
1<\/em><\/td>\nWhat are the uses of macroeconomics?<\/td>\n2<\/em><\/td>\n<\/tr>\n
2<\/em><\/td>\nDistinguish between NNP at market price and NNP at factor cost.<\/td>\n2<\/em><\/td>\n<\/tr>\n
3<\/em><\/td>\nThe value-added method avoids double counting. Justify.<\/td>\n2<\/em><\/td>\n<\/tr>\n
4<\/em><\/td>\nWhat are the implications of Say\u2019s law of market?<\/td>\n2<\/em><\/td>\n<\/tr>\n
5<\/em><\/td>\nWhat is the cause of unemployment according to Keynes?<\/td>\n2<\/em><\/td>\n<\/tr>\n
6<\/em><\/td>\nThe value of MPC lies between 0 to 1. Justify with proper reasons.<\/td>\n2<\/em><\/td>\n<\/tr>\n
7<\/em><\/td>\nWhat is meant by the paradox of thrift?<\/td>\n2<\/em><\/td>\n<\/tr>\n
8<\/em><\/td>\nLet consumption function and investment function in a two sector economy are given as: C = 200 + 0.75 Y and I = Rs.300 million.<\/p>\n

Compute equilibrium level of income and saving.<\/td>\n

2<\/em><\/td>\n<\/tr>\n
9<\/em><\/td>\nWhat is meant by tight (contractionary) monetary policy?<\/td>\n2<\/em><\/td>\n<\/tr>\n
10<\/em><\/td>\nWhat do you mean by IS curve?<\/td>\n2<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Section “B”<\/p>\n

Descriptive Answer Questions<\/strong><\/p>\n\n\n\n\n\n\n\n\n
<\/td>\nAttempt any six<\/strong> questions<\/td>\n6×10<\/td>\n<\/tr>\n
11<\/td>\nWhat are the scopes of macroeconomics in business decision-making?<\/td>\n<\/td>\n<\/tr>\n
12<\/td>\nWhat is national income? Explain the difficulties to the measurement of national income.<\/td>\n<\/td>\n<\/tr>\n
13<\/td>\nState and explain the Keynesian psychological law of consumption.<\/td>\n<\/td>\n<\/tr>\n
14<\/td>\nExplain the Keynesian theory of employment.<\/td>\n<\/td>\n<\/tr>\n
15<\/td>\nConsider the following data (RS in million).<\/p>\n\n\n\n\n\n\n
\u00a0\u00a0\u00a0 Yd<\/td>\n\u00a0\u00a0 0<\/td>\n\u00a0\u00a0\u00a0 300<\/td>\n\u00a0\u00a0 600<\/td>\n\u00a0\u00a0\u00a0\u00a0 900<\/td>\n\u00a0\u00a0 1200<\/td>\n\u00a0 1500<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0 C<\/td>\n\u00a0 120<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0 –<\/td>\n\u00a0\u00a0\u00a0\u00a0 –<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 –<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 –<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0 –<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

a)\u00a0\u00a0\u00a0 Complete the table at MPC = 0.8<\/p>\n

b)\u00a0\u00a0\u00a0 Using the schedule, explain three propositions of psychological law of consumption function.<\/p>\n

c)\u00a0\u00a0\u00a0 Derive linear consumption & saving function.<\/p>\n

d)\u00a0\u00a0\u00a0 Graph saving curve and explain APS and MPS.<\/strong><\/td>\n

<\/td>\n<\/tr>\n
16<\/td>\nConsider the following features of Nepalese Economy.<\/p>\n

C = 100 + 0.75(Y-T)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/sub>T = 80 + 0.2Y I = 200 \u2013 2000i<\/p>\n

G = Rs.100 million \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Ms<\/sub> = Rs. 200 million\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Mt<\/sub> = 0.5Y\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Msp<\/sub>= 100 -2500i<\/p>\n

i.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Derive IS and LM function.<\/p>\n

ii.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Calculate the equilibrium income and rate of interest.<\/p>\n

iii.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Suppose government expenditure increases by Rs.100 million and tax rate decreases by 5%. Calculate new equilibrium income and interest.<\/td>\n

<\/td>\n<\/tr>\n
17<\/td>\nWhat is inflation? Explain the various anti-inflationary measures of inflation.<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Section “C”<\/p>\n

Case Analysis<\/strong><\/p>\n\n\n\n\n
<\/td>\nRead the scenario and answer the question that follows.<\/em><\/strong><\/td>\n<\/td>\n<\/tr>\n
18<\/td>\n\n\n\n\n
<\/td>\nThe Historical Performance of The US Economy<\/strong><\/p>\n

Economists use many types of data to measure the performance of an economy. Three macroeconomic variables are especially important: real gross domestic product (GDP), the inflation rate, and the unemployment rate. Real GDP<\/strong> measures the total income of everyone in the economy (adjusted for the level of prices). The inflation rate <\/strong>measures how fast prices are rising. The unemployment<\/strong> rate <\/strong>measures the fraction of the labor force that is out of work. Macroeconomists study how these variables are determined, why they change over time, and how they interact with one another.<\/p>\n

The real GDP in the USA: – two aspects of real GDP are noteworthy. First, real GDP grows over time. Real GDP per person today is about eight times higher than it was in 1900. This growth in average income allows us to enjoy a much higher standard of living than our great grandparents did. Second, although real GDP rises in most years, this growth is not steady. There are repeated periods during which real GDP falls, the most dramatic instance being the early 1930s. Such periods are called recessions <\/strong>if they are mild and depressions <\/strong>if they are more severe. Not surprisingly, periods of declining income are associated with substantial economic hardship.<\/p>\n

Inflation in the USA: – inflation varies substantially over time. In the first half of the twentieth century, the inflation rate averaged only slightly above zero. Periods of falling prices, called deflation<\/strong>, were almost as common as periods of rising prices. By contrast, inflation has been the norm during the past half-century. Inflation became most severe during the late 1970s when prices rose at a rate of almost 10 percent per year. In recent years, the inflation rate has been about 2 or 3 percent per year, indicating that prices have been fairly stable.<\/p>\n

The U.S. unemployment rate: – there is always some unemployment in the economy. In addition, although the unemployment rate has no long-term trend, it varies substantially from year to year. Recessions and depressions are associated with unusually high unemployment. The highest rates of unemployment were reached during the Great Depression of the 1930s. The worst economic downturn since the Great Depression occurred in the aftermath of the financial crisis of 2008\u20132009 when unemployment rose substantially. These three pieces of evidence offer a glimpse at the history of the U.S. economy.<\/p>\n

Questions:<\/strong><\/p>\n

a)\u00a0\u00a0\u00a0 What is real GDP? How is it computed?<\/p>\n

b)\u00a0\u00a0\u00a0 What is an economic recession? Write its characteristics.<\/p>\n

c)\u00a0\u00a0\u00a0 Differentiate between inflation and deflation. Explain the role of the monetary authority to maintain price stability in the country.<\/p>\n

d)\u00a0\u00a0\u00a0 Define unemployment. What are the causes of unemployment?<\/p>\n

e)\u00a0\u00a0\u00a0 Overview of the US economy from 1900 AD to the date.<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

 <\/td>\n

20<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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