University of Delhi 2005-2nd Year B.A Economics Macro- Analysis And Policy External Correspondence -II Year : - Question Paper

part ‘A’

Q. 1. How is the equilibrium level of income determined in an economy ? Is this equilibrium always at full employment ?

Q. 2. An increase in investment leads to a multiple increase in national income. explain.

Q. 3. Distinguish ranging from autonomous investment and induced investment. discuss the factors that determine the level of induced investment. 8, 12

Q. 4. Does an increase in money supply always lead to a pro-, portionate increase in price level ?

Q. 5. Write short notes on :
(a) Demand-pull and cost-push inflation;
(b) Measures of money supply used in India.

part ‘B’

Q. 6. How do commercial banks create credit ? elaborate the limitations to their power of credit creation ?

Q. 7. explain the functions of Central Bank. 20

Q. 8. discuss the reasons for increase in public expenditure in Indian economy.

Q. 9. Distinguish ranging from impact and incidence of a tax. explain the incidence of a unit tax under perfect competition. 10, 10

Q. 10. Write short notes on :
(a) Centre-state financial relations in India;
(b) Objectives of fiscal policy in a developing country

Earning:   Approval pending.