[This question paper contains 4 printed pages.) Sr.No. of Question Paper : 92 E Unique Paper Code: 227351 Name of the Course B.A. Programme ~ Economies Name of the Paper : Principles of Macro Economics —I Semester ml Duration : 3 Hours Maximum Marks : 75 Inst yr Candi es, Write your Roll No. on the top immediately on receipt of this question paper. 2. All questions carry equal marks. 3. Answer any five. 4. Answers may be written either in English or Hindi; but the same medium should be used throughout the paper. pri & few faa lL Www & fied & oe fee ae Pelfte eat w aT aHAT fafay 2 walt wei A wart oe eI 3 woe wed F oer Sie 4. ROWE Gr Tae sa oT AA Re Cem sareT A fare, Afar MA Tera a EAT KAT & Bn afte) Explain the income method of measuring National Income. What are the precautions that economists observe while measuring National Income using this method ? is) arate sare at ae EY seer FART aan ae AAP 1 TS aH aT gira FAR Sa A Shr ahmed a fare after gamba an eat wer wat 3 ? PTO.92 2 2. (a) Explain the consumption function in detail. How can the savings function be derived from the consumption function ? (7%) (>) @ Supposing C = 10 + 0.6 Y + 0.03 W I= 100; W = 1000, I = Investment; W = Wealth. What are the equilibrium levels of GDP (Y), Consumption (C) and Savings (S) 4) (i) Suppose W increases by $0% Recalculate Y, C, & S. @Y%) (%) Rear 8 oni wer A care se | aaa Gat A owt wae a apa aa 1 (@) (i) wean ater } fer aint a agit, GDP (Y) sat (C) war wae (S) an after afte 1 saint Hert (C)= 1040.6 ¥ + 0.03 W faa (1) = 100 weg wa UF (W) = 1000 ads wa (i) aR ea srpfoacen % uz (W) 50 Wiad az UI, wa Wala GDP (Y) HIT (C) war waa (8) Bt ge we APE | 3. (@)_ What is an investment multiplier ? Is it related to MPC ? Explain precisely how ? (7%) (b) Does a Rs. 100 crores increase in government spending and a Rs, 100 crore decrease in tax have the same effect on the budget deficit ? Elaborate. Which in your view. would be better policy to stimulate the economy? (74)92 3 (@&) Fae qos an aan ate 2 ? Gaia suet waft wen yore A ear Ga 2? Rega Bre areT Se (@) we srfaaen ¥ aant aa 100 wos wea a ae THY es UTE THT 100 THs wT Awe wy a eer sae ae wee GH BA we ET? Sr AST | se ayn aM-S Ae aeterrer wt agra Bt How do changes in money supply affect the interest rate in an economy ? (1s) aren fare fe yer afore F aera ofS F afteda ar wera wt A eee FA EAT 2? If there were a society where there was no money, what would be the problems ? How are they resolved through money ? (as) ae ver arfoaaen 4 yer car ae aT et at er- ae SHSTEaT sme ? eae wife | ST afsareat ar Pare yer at gareate & Ha ate 3 7 “Banks create money out of thin air”. Explain. (15) “te ara an Pato gar F aa #1" are sfary 1 How is National Income determined in an open economy ? Explain through a suitable diagram in a four sector economy. (is) eee ee Sta ER area Hare set ar Prifeor PR Star Renta ram eet aren afare 1 Write short notes on any two : () Speculative demand for money PTO.92 4 (i) Paradox of thrift Gii) Quantity Theory of money (7447) Prt Aa Rah aif: (i) Far ster fe aT at a (ii) Prefer & Atenne (iii) yen an Vt eit (700)