DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS ____ MBA (BE) PROGRAMMME II SEMESTER - MAY, 2022 __ Paper Name :Macroeconomic Analysis and Policy Paper No: 424801201 Time: 3 hour 30 minutes ‘Maximum Marks: 70 ie (Attempt any4 questions. All questions carry equal marks). Ye MPiscuss the role of the banking system in the US financial crisis, explain the amplification mechanims that ‘were instrumental in its spread and outline any two policy measures adopted by the government to deal with this criss @)Money supply can become endogenous in an economy with fixed exchange rates. Explain, Mention any 2 reasons countries choose to adopt.a fixed exchange rate regime. (10+ 7.5) Til, /{@} Compare and contrast the efficacy of fiscal policy under fixed and flexible exchange rates under perfect pital mobility. = Or, (a) Use the 3-equation model to evaluate the likely impact of and appropriate policy response to a permanent deqnand shock. ((@), What isthe theory ofPurchasing power parity ? What does it imply about the relation between exchange \Gaés and inflation rates ? (10+ 7.5) ( .quation model to explain the policy options and constraints faved by governments in such a situation. (b) Weite a short note on the Paradox of Thrift and comment on the difference in the role of savings in the short run vis a vis the long run, Or, (b) Explain why governments tend to opt for Monetary accommodation of fiscal policy. (12 + 5.5) OSes an economy is deseribed by the following functions : C = 50 + 0.8Yd ; I= 70; G = 200; TR = “Io: (0.2. Calculate the equilibrium level of income, the multiplies and the government's Budget surplus in this model, Suppose that the tax rate t inoreases 10 0.25. What would be the new equilibrium income, new tmulipier and change in the budget surplus? Comment on the differences between the inital and new tuations. aylWhat do you understand by the Covered and Uncovered Interest Parity conditions ? What do they imply regarding the relation between interest rates and exchange rates ? (10+ 7.5) (a) Use the Solow model to bring out the relative importance ofthe savings rte and technological progress for long run economic growth or, {@) In aclosed economy suppose the government decides to reduce transfer payments (e.g. cut unemployment dole) but increases government purchases of goods and services by an equal amount, would equil ‘income rise or fll asa result ofthis change? Give reasons and check your answer with the folowing example Initially MPC = 0.8, t=.25 and Y = 600 and after the change 4G = 10 and ATR = -10 (where MPC=Marginal propensity to consume; t = tax-rate; Y = GDP; dG and dTR represent change in government expenditure (G) vad transfer payments (TR) respectively). Inthe example find the change in equilibrium income and in the budget surplus and explain why the budget surplus changed. (b) Define the Wage Setting and Prive Setting relations and use the WS-PS framework to explain the shape of the Phillips curve (PC) and reasons for shift in the PC.(10 + 7.5) vw ium ) Use the Central Bank’ loss function to compare and contrast Inflation Averse, Unemployment Averse and lanced Central Banks and explain the derivation of the MR curve, ‘Current account deficits may be good or bad depending on its source. Do you agree ? Discuss, reference to possible causes and means of financing current account deficits. (12 + 5.5) Page LofInternational Economics MBA (BE) ~ Il Semester Examination 2022(May) Paper Title: Internationial Economics Paper code: 424801202 Time: 3hours 30minutes Total Marks: 70 Adempt any 4 questions, All questions carry equal marks GC Use the information in the table below to answer the following questions Part I) Production of per unit of labor: s LS Argentina Wheat a by 30 20 ale ere 100 20 el px UG Does either country have an absolute advantage in the production of wheat or Rice? Explain. ) What is the opportunity cost of wheat in each country? v6) What is the opportunity cost of rice in each country? LAF Analyze comparative advantage and opportunities for trade between the U.S, and Argentina, S Part 2) Production of per unit of labor: | US Argentina \ Wheat = 200) 20 Rice 100 80 VA) Does either country have an absolute advantage in the production of wheat or rice? Explain 46) What is the opportunity cost of wheat in each country? : \leF, What is the opportunity cost of rice in each country? (A Analyze comparative advantage and opportunities for trade between the U.S. and Argentina, x coe the table and answer following questions; Country Wage rates Cloth Wine USA UDollar / hr The / unit B3hr / unit England 06 Pound /he 2br 7 unit dhe unit Given exchange rate is one dollar equivalent to one pound. a) [Ftrade is possible at above exchange rate, which country has comparative cost advantage in which commodity? : b) What would be the pattern of trade if the exchange rate is 'pound / 1.25 dotlar? ° ?©) What are the limits to the wage rate in each country? What will happen to pattern of trade if the wage limit is broken, justify your answer using the above information? d) What are the exchange rate limits? What will happen to pattern of trade if exchange rate limit is broken, justify your answer by using from above information? eo Will free teade and perfect competition lead to an equalization of wage rate internationally? Explain. Why the wage rate largely vary between developing and developed countries, in the same sector in a real world situation, even after the adoption of free trade? 0-4 oy Why are increasing returns to scale and fixed costs important in models of international trade with imperfect competition? wf There is no economic rationality behind the export subsidy, Prove! Koh Home's demand curve for wheat is 1, <9) = 100 -20P; and Its supply curve is S=20 + 20 P <.... demand curve is D* = 80 ~ 20P; and a supply curve S* = 40 +20P. : a Devive and graph Home's and foreign’s import demand schedule and export supply curve ind the price of wheat in the absence of trade in both countries. \ftrade is there between home and foreign, at zero transportation cost, what is the world wen And what is the volume of trade? Home levies a specific tariff of 0.5 on wheat imports. Determine the price, quantity of wheat demanded and supplied in each country and volume of trade, 9 Show graphically and calculate the term of trade gain, efficiency loss, and the total effect on welfare of the tariff. & Write Short tiotes on following; Aorier Curve \oyBynamic Learning Curve of Immiserizing Growth v National Welfare Arguments against Free Trade.MBA (BE) Il Sem, ~ May 2022 Business Economies--Course 424801203 Paper Name: Firms, Markets and Public Policy Time : 3 hours 30 minutes Maximum Marks : 70 Instructions: Answer any four questions from the six questions given below. All questions carry equal marks. WZ A/ rom a public policy perspective, does it make sense to allow firms to co-ordinate Cost GUE theipR&D efforts? Dicouss the experience of the COVID 19 vaccine research in the context of the egaek ae above. Lob mene : ‘gouss the possible effects of persuasive advertising in imper fect competition. expert ot “ye analyze the data given below and comment on advertising intensity in the given industries. , ad ont ot ald Tndustry Tncome Price | Advertising Elasticity of Elasticity | Elasticity Demand Short Run | Long Run Book Publishing 2.2 0.8 ¥0.25) 0.35. Artificial Jeweller AS 3.0 =G98 | 031 Gold Jewellery 1.79 0.66 0.15 0.20 ‘Soaps and Detergents 1.68 0.76 0.284 0.294 ~| Cold Drinks 2.0 “1.48 0.57 0.59 * Wine 0.41 0.68 0.97 1274) X Busines often offer several varieties of products, Describe the possible reasons for this type of market conduct. yw ‘Wrige short notes on the following: rincipal-Agent Problem ys acentration Ratio and HHI akesile Price Maintenance hat players | and 2 play a dynamic, 3-stage game of perfect and complete fnformation, Player | moves first, choosing between Land R, Player 2 moves second, aovescing between L” and R’. In the final stage, player T chooses between a and b ‘Their payoffs are as follows: (assume tlL-L?-a(1,0) L-L’- b (2,1) L-R*-a (1,3) L-R’-b (0,1) R-L’-a(0,0) R-L'-b(2.2) R= R*=a(i.0) R-R-bN Note that the first number in parentheses is the payoff for player 1, and the second number is the payoff for player 2. Describe this game with a game tree. Use backwards induction to identify the unique SPNE to this game. Explain the concept of “Infinite Re complete information.” Explain the concepts of “perfect information” and Ww Although price wars occur in equilibr statement. aogces in equilibrium.” Explain thisMBA (BE) II Sem. - May 2022 Business Economics--Course 424801204 Paper Name: Environmental Economics ‘Time: 3 hours and 30 minutes Maximum Marks: 70 Instructions: Answer any four of the six questions given below. All questions carry equal marks. 5 UrGWith the help ofa diagram. explain how a negative externality creates a distortion is lowering greenhouse gas emissions by a system equilibrium price and output levels. to declare a plan of climate action—its “nationally (b/The main focus of the Paris Agreement of pledge and review. Each party commits determined contribution” or NDC. Discuss. of the followit Extended Producer Responsibility Comment on anytwa Weh Cradle-To-Grave approach in “(sf Weak and Strong Sustainability (c) Tragedy of the Commons is considered as the only wAnswer the following: 49 During the environmental audit process. “planning stage” important stage. Do you azree? Explain f Economic Values that can be derived from the to Identify and explain the different types 0 ‘Amazon rain forest. suit the desires of humans; itis a udget has been ‘spent,’ “F = 0.0017 Residual} 152738493 46 = 332040.202 Resquared = 0.2428 = Adj Resquared Total | 20172112.0 48 = 420252.332 Root MSE, [Salary | Coef. Std. Err. t P>it| [95% Conf. Interval] ISales | 651.5859 200.3094 3.253 0.002 248.384 1054.78, Roe | 37.78687 13.6906 2.760 0.008 10.22912 65.34462 cons | 346.4558 405.5214 0.854 0.397 469.8165 162.728 (@) Find above the results of a regression using a cross-section data of 49 companies where log of CEO salaries was regressed on 2 measures of firm performance : log of Sales and Return on equity (measured in percentage). Interpret the estimated coefficients and comment on theit statistical significance. (0) Find the value and degrees of (reedom of the F-statistic and interpret the result. (c) Find the values of the Adjusted R-squared and Root MSE. () This regression covers two types of firms, 29 Financial Firms and 20 Manufacturing Firms State how you would use a dummy variable and carry out a Chow test for the hypotheses that the relation between firm performance and CEO salary is different for these two types of firms, Specify the model and give details of how the hypothesis test would be carried out (include details of the restricted and unrestricted models, distribution and degrees of freedom of the test statistic). 4,4,3.5, 6) Page 1 ofa442% Consider the following model : Ym at Bixi+ Bra + fo tu, Where ¥ = Dummy variable which takes the value 1 otherwise X1= Annual Income X2~ Amount of total outstanding loans and mortgages X3-= Age ‘a credit card application is accepted and 0, @)_ How would you interpret the estimated coefficients from this model ? wo Show that this model violates at least ne OLS assumption and mention how would you address this problem. . E s (ef Using data on output (¥), labour (L) and capital (K), explain how you would use OL: "regression to estimate the Cobb-Douglas production function ¥ = ALK? and test the hypothesis of incroasing returns to scale (i.¢., a+b > 1). Ue) Consider the followmg Regression models Model 1: ¥= a+ Bixi + axa + Baxs tu, Model 2: ¥=a*+ BI*xl +v Explain how you would interpret the coefficient of x1 in Models 1 and 2. Under what conditions can the coefficient of x1 be the same in Models | and 2? Give reasons for your answer. 45,45) a tudent is studying the relation between Business school ranking and starting salary of Y © individuals with a MBA. degree, Data is available fap starting salaries, gender and Graduation marks of S00 students along with the ranks of the Business schools they attended (B-schools. ranked from I (the top B-school) to 50 (the lowest ranked B-school). Explain how he ean ase lummy variables to formulate a regression model for this study. consider the following Finite Distributed Lag model : y, a+ Box, FOX HEX + uy and interpret the following coefficients 6; (i=0,1,2) and (Bo + 8: + 83). a Define ‘serial correlation’ and explain any one method to te: ‘What is Multicollinearity ? How does it affect the propertic cone method for checking st for first order serial correlation, for the presence of Multicollineat problem. ies of the OLS estimators ? Outline rity and one possible remedy for this (4,4, 4.5, 5) X=¥42, he regressed Y on X, th (i) Intercept and slope coefficients Ui) ‘Standard errors ofthe coefficients (il) Coefficient of determination Justify your caleulations/answer? (b) Researcher is running the Model: £; Families, the result ‘Xpenditure = By + By Income, he has the data for 20 OF the regression jg : Page 2 of 4Source ss at Ms Number of obs = 20 — | Ba, 8 = 6741.83 Model | 6459227.31 6459287.31 Prob > F = 0.0009 idual 958.091186 squared Adj R-squared 0.9972 Tovel | 6476532.95 340870.155 Root MSE = 30.953 expendivure Coef. Std. Err. ct Piel [95% Conf. Inverval] income -0120031 82.11 9.000 _cons | -32.88421 -2.29 0.035 (i) Find the missing values in the above result? ii) Interpret the coefficients? Does the value of intercept have any meaning? Justify. (ii) Interpret the R-squared? (iv) Conduct hypothesis testing for slope and intercept coefficients using Confidence Interval approach, Level of significance approach and P-Value approach. Do the three approaches give you the same results? {c) Suppose slope coefficient of regressing y on xis yonx and slope coefficient of regressing X on YisBcony- If we multiply these two slope coefficients we get 1, then do you think it matters if we regress ¥ on X or X on Y, Justify. [(2+1+1) + (3424245) + (2.5)] 6 _(al-lustify whether the following statements are true or false Ai" If we double the value of dependent (y) and independent variable (x), then regress y on x, We get the same slope coefficient and coefficient of determination, lif’ Regression done on standardized variables, will always be the regression without intercept. “Uilif if we run the regressio average of y;. i = Bo + Hi, than R? = 0 and estimator of f¥y will show the oy Given the following scatter plots of y (dependent variable) and x finde, ‘Suggest the appropriate functional forms of the model, interpret the c: the slope and elasticity of the respective model, pendent variable), efficients and find(i) (ii) leet ce! ue eax variables, we regressed Y on X using the following model Model A: In¥; = By + BX; Model B: ¥; = By + B,InX; (i) Do'you think the interpretation of both the models are same? Justify (ii) Can we compare the R?s of both the models? Justify \ [(2x3) + (444) + (241.5)Semester: I Name of the examination: MBA (Business Economics) Subject: Leadership and Organization Maximum mark: 70 Time: 3 hours 30 minutes s. Candidates need to answer four of them, three from Gection )) ne question. All questions Paper Code: 424801207 There is a total of six question. ks are given against ( andBection ts compulsory to answer. The mar carry equal marks. Section I galrat is strategic leadership? Distinguish between the con a and mission statement that you 12 Desoribe about yourself the carer's visio GY acept of a vision and a mission statement will draft after you graduate from MBA? 7+7 x ¢ tenants of Servant Leadership? Give an ‘Define servant leadership? What are thi illustration of a suitable Indian leader who possess the qualities of a servant leader? GYtT+D arning, 5, What is a learning organization? Explain Peter Senge’s five discipline of the le able example of why is it important to have a te GBwtTt Ty organization? Explain with suit arming ganization in today’s competitive corporate world? vie is motivation? Describe Maslow’s hierarchy theory of need and Herzberg two- factor theory? Just say if you are a senior manager supervising a group of below average productive individuals, how would you motivate them to achieve their potentials Bw or uny and help t +7+7) 5, What is organizational Sonnenfeld? Explain the Ouchi Framework and Udai Pareek Approach of organi: culture? Gwr4+5+5) he organization in achieving its specified objective? 1 culture? The four types of organizational eulture given by ationalSection: If Saw below is a case passage. Answer all questions. Julie isa computer science engineer who works isa high-tech corporation where 81% ma dominates the workplace. She recently got appointed in a middle management supervisory ee grade role and has been told to lead a team comprising of nine people that includes only one told to lead a team comprising of ine Pee includes only One female. The director of the company Mr. Kapil is a very successful, liberal and an inclusive ams —— seas —— person. He has been able to transform the company into a result-oriented culture to the best there is town. But he has not been able to imbibe the good cultural values in the company. : not bee > good culture Despite being inclusive Mr. Kapil has been unable to provide equal opportunities for women as veer in various roles the organization has to offer and it has been a drawback for him despite his inclusive policies for the organization. Julie a qualified and experienced manager was made the leader of a group and members had difficulties in accepting and listening to a woman in higher position. This is also because the employees were so acquainted and adapted to a male Eee =a ee centric culture that it was unique for them to take orders from a lady. Then the only lady in Zc e for them to wke oreo gay lady in the group Mrs. Rai would support her occasionally just because she i a wom Ra the other hand is older than Julie but junior in position too has some grudges otra not having her being promoted. And that is the reason why Mrs. Rai sometimes plays a diplomatic role and remains indifferent. All these while Mr. Kapil has been observing the day-to-day activities from quite some time and has not unable to provide a valuable solution to the problem. Of the group only Mr. Raj, who is a senior in the group and who works under Julie supports the importance of gender minority in the organization. Mr. Sonu the new eecrult is in probation for a period of six months and is just learning the organizational culture. Due to all tho differences and lack of support from higher authority, Julie has gone to a state of depression and unable to perform to her full potential ota the style of leadership Mr. Kapil possess in the case? Do you think he is having @ wrong style of leadership for the organization? If yes/no please elaborate on the style of leadership? G5)ZL Do you think the lack of proper diversity management is responsible for the problems Julie is facing? (3.5) a the fault with the organizational culture or with the employees that Julie has to face such situations? (3.5) west on the case if you were a new recruit like Mr. Sonu, what would be your course of action? (3.5) 5, AAustify the lack of competence in leadership role in the case? Give a suitable title to the case G+ A)