This question paper contains 2 printed pages. Your Roll No. SI. No. of Ques. Paper :352.C Unique Paper Code 1227351" Name of Paper : Principles of Macro Economics - I Name of Course : B.A. Programme - Economics Semester iT Duration : 3 hours . Maximum Marks : 75 1 All questions carry equal marks. Answer any five questions. ae seat & won aie bi ahs ot ater reat & sae Sort Questions should be answered either in Hindi or in English, but the same medium should be used throughout the paper. se TS vere Feet afore eHfawr Ge mem ar H cae a se ar Ta afr 1 Explain briefly the main steps taken to estimate national income by production method. wets ara Al ares at see fate a sa A ACEC 15 (a) What is an investment multiplier in a two sector model? How is it related to marginal propensity to consume? we fray seloraen & Ram que at cen afer dain sri safes TH free yore Haan dai 22 Tn (b) (i) What will be the change in income if the change in investment is Rs.1000 crores and MPC = 3/4? arr en F aan agera am, aft faa 1000 sds oud a shady et ait digia sa safT (MPC)=3/4 1? (ii) Calculate the value of multiplier if MPC is zero or 1. fae Toe a mor afer afe MPC Ys at eae at a Te (a) What is personal disposable income? How is it calculated? Safe watea ara Fa ¢? ae be orafera at 2? Ta (b) Given the following consumption function C=100+0-8Y. Derive the corresponding saving function and compute the value of saving when Y=Rs. 1000 crores. we adeqaen a TT HEA C=100+0-8Y @ a see aes aaa Fe a aqefe ifs a aaa Ge a THT aif afe Y=1000 Fos VA) In P.T.0.as2c 2 4. Distinguish between actual GDP and potential GDP. How would we correct this gap in a three sector model? anatase GDP Ua aufaa GDP H sim aaeC | ws Pas adorn H ste FR Se fren sar 2? carer aif | 15 5. (a) Explain the movement along and shift of the AE function, Be 2a (AB) aw Fi afaviten We AB am 4 faware a omen ifs he (b) Suppose you are given the following information: Consumption function C=60+0-8Ya Disposable income Yg=Y-T Taxes T=Rs. 40 crores Investment I=Rs. 70 crores Government expenditure G=Rs. 70 crores Net Exports NX=50-0°10Ya Find the equilibrium output, we afer aeieqgen 8 fq ainsi & aera Gris an often afc: Baa FE (C)=60+0-8Ya warsa 374 (Ya)=Y-T free ()=70 as oA WRI FX (T)=40 HTS TTT WER A (G)=70 FS SY ‘We Pratt Ge (NX)=50-0-10Ya Taz 6. (a), Explain the process of credit creation by commercial banks, arate a ara frat se aed 82 eer afar Tn (b) If cash reserve ratio is 5% and initial deposits are Rs. 10,000/-, what would be the credit money supply in an economy, assuming that cash with the public is zero? w aterren Hare yar off a ofa sifay, afe ae srefea aiquid (CRR) s sferera @, Ai SAT 10,000 eed @ ait Shi Bi Te ya vat a Tha 7. Explain why an increase in tax revenue accompanied by an equal increase in Government spending will not have a neutral effect on GDP. aren vifre fe a aH ait acm om i aur ag a wets ora & a & Ta ISAT et 15 8. Write short notes on any two: (a) Speculative demand for money (b) Narrow and Broad measures of money supply (c) Net Exports. fer Qe fecoohl afc: %) Fer sees ART FIT (@) satel we faega aa aim of (7) aR ar afta frat athe 1300