University of Delhi 2010-1st Year M.Com Commerce BUSINESS ENVIRONNMENT UNIVERSITY - exam paper

Attempt All questions All questions carry equal marks

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1 (a) Derive and show that a set of nominal IS and LM functions can establish real income and real interest rate in an economy Explain its dynamics

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(6) The diversified investor helps m determining a demand function for real cash balances Do you agree ^? Give reasons

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2 (a) Establish a price sensitive aggregate demand function with the help of IS-LM functions Comment upon its slope.

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(6) ^WA pnce sensitive aggregate supply function is based on money illusion effect'. Do you agree ⁹ Critically analyze

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3    (a) Show what happens when money supply becomes

both endogenous and exogenous How does it impact rate of interest and level of income ⁹

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(6) Real business cycle theory can explain how shocks lead to business cycles Do you agree ⁹ Give reasons Are there any limitations of this theory⁹

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4    (a) Globalization is a necessary evil Discuss

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(b) WTO has played a significant role m the growth of trade and investment m this globalised world. Critically analyze

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5 (a) How does equilibrium differ between a closed and open economy ? Explain m detail

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(6) Explain Steady State Growth What is the impact of an increase in population on the Golden Rule ?

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