 10 Mcq ( 5 marks )

 5 short question out of 10 ( 10 marks)

 One case study out of two (10 marks)
 Most of the answers are in 2-3 lines. Don’t get afraid by the number of
questions.

Module 9.01

1. Write four differences between Micro and macro-Economics?

2. Write four factors of production?
3. Mention three fundamental problems of an Economy ?
4. Draw supply and demand curve ?

Differences between Micro and Macro Economics

Aspect Microeconomics Macroeconomics

Examines the economy as a whole, focusing

Scope and Studies individual markets, industries, and on aggregate variables and overall
Focus consumer/producer behavior. economic performance.

Analyzes the economy as a whole, including

Level of Analyzes individual agents like consumers factors like national output and
Analysis and firms. employment.

Focuses on individual consumer

Factors preferences, supply and demand for Considers factors like overall employment,
Considered specific goods. inflation, fiscal and monetary policies.
Aspect Microeconomics Macroeconomics

Influences decisions on pricing, Guides government policies, central

Policy production, and resource allocation by banking decisions, and economic stability
Implications firms and consumers. measures.

**Factors of Production:**

The four factors of production are:

1. **Land:** This includes all natural resources used in production, such as minerals, forests,
water, and agricultural land.

2. **Labor:** Refers to the physical and mental effort exerted by individuals in the production
process.

3. **Capital:** This encompasses both physical capital (machinery, equipment, tools) and
human capital (skills, knowledge, expertise) that contribute to production.

4. **Entrepreneurship:** The innovative ability to combine the other factors of production to

create new products, services, or business ventures.

**Fundamental Problems of an Economy:**

1. **What to Produce:** The decision regarding which goods and services to produce based on
the limited resources available and the needs and wants of society.

2. **How to Produce:** The choice of production methods and techniques that efficiently
utilize the available resources to produce goods and services.

3. **For Whom to Produce:** Determining how the produced goods and services are
distributed among the members of society, addressing issues of income distribution and
fairness.

Supply and Demand Curve

- **Supply Curve:** It's a graphical representation that shows the relationship between the
quantity of a good or service supplied by producers and the price of that good or service,
holding other factors constant. The supply curve slopes upward from left to right, indicating
that as the price of the good increases, the quantity supplied also increases.

- **Demand Curve:** It represents the relationship between the quantity of a good or service
demanded by consumers and the price of that good or service, assuming other factors remain
constant. The demand curve slopes downward from left to right, indicating that as the price of
the good decreases, the quantity demanded increases.

The point at which the supply and demand curves intersect is called the equilibrium point,
where the quantity supplied equals the quantity demanded at a specific price. This is where
market equilibrium occurs.

I'd be glad to provide you with answers to your questions:

Module 9.02

1. Define closed and open economy?

2. Mention 4 key variables for Macro Economy ?
 3. Difference between Real GDP & Nominal GDP ?
4. Draw business cycle curve ?
5. Define recession and boom in economic term?
6. How do you calculate Unemployment rate ?
7. Define inflation?
8. Mention two causes of inflation?
9. What’s the relation between inflation and unemployment rate ?
10.Mention four effects of inflations?
11.Define Budget deficits ?
12.What is trade off and opportunity cost in economic terms ?
13.What are the three types of Macroeconomic policy ?

1. **Closed Economy:** A closed economy is one that does not engage in international trade
of goods and services. It does not interact with other economies through exports, imports, or
financial flows.

**Open Economy:** An open economy is one that engages in international trade of goods,
services, and financial assets. It interacts with other economies through imports, exports, and
international investment.

2. **Key Variables for Macroeconomy:**

- Gross Domestic Product (GDP)

- Unemployment Rate

- Inflation Rate

- Aggregate Demand and Aggregate Supply

3. **Difference between Real GDP & Nominal GDP:**

 - **Nominal GDP:** It is the total value of all goods and services produced within a country's
borders, measured using current prices.

- **Real GDP:** It is the total value of all goods and services produced within a country's
borders, adjusted for inflation to provide a more accurate measure of economic growth over
time.

4. **Business Cycle Curve:**

5. **Recession and Boom:**

- **Recession:** A recession is a period of significant economic decline, typically measured

by a decrease in GDP over two consecutive quarters, accompanied by a rise in unemployment
and reduced consumer spending.

- **Boom:** A boom is a period of robust economic growth, characterized by high GDP

growth, low unemployment, and increased consumer spending.
6. **Calculating Unemployment Rate:**

Unemployment Rate = (Number of Unemployed / Labor Force) × 100

7. **Inflation:** Inflation is the sustained increase in the general price level of goods and
services in an economy over a period of time.

8. **Causes of Inflation:**

- Demand-Pull Inflation: Occurs when aggregate demand exceeds aggregate supply, leading
to upward pressure on prices.

- Cost-Push Inflation: Arises from increases in production costs, such as wages and raw
materials, pushing up prices.

9. **Inflation and Unemployment Rate Relationship:** The Phillips Curve suggests an inverse
relationship between inflation and unemployment rate in the short run. When unemployment
is low, inflation tends to be higher, and vice versa.

10. **Effects of Inflation:**

- Reduced Purchasing Power

- Uncertainty in Planning and Investment

- Distorted Price Signals

- Income Redistribution

11. **Budget Deficits:** A budget deficit occurs when a government's expenditures exceed its
revenues in a specific period, leading to increased borrowing and accumulation of public debt.

12. **Trade-Off and Opportunity Cost:**

- **Trade-Off:** It refers to the decision-making process where obtaining one thing involves
giving up something else.
 - **Opportunity Cost:** It is the value of the next best alternative that is forgone when a
decision is made.

13. **Three Types of Macroeconomic Policy:**

- **Monetary Policy:** Managed by the central bank, it involves controlling the money
supply and interest rates to influence economic activity.

- **Fiscal Policy:** Implemented by the government, it involves changes in government

spending and taxation to influence the economy.

- **Exchange Rate Policy:** Refers to actions taken to manage a country's currency value in
relation to other currencies.

Module 9.03

1. How do you identify a country as rich or poor ?

2. Define GDP & NDP ?
3. Mention three method for calculating GDP ?
4. Explain GDP calculation by Expenditure method ?
5. Difference between Real GDP & Nominal GDP ?
6. Can GDP calculation give proper picture of an economy ? mention
two reasons on your logic ?
7. Why purchasing power parity is used instead of GDP ?
8. Mention four alternative to GDP ?

1. **Identifying a Country as Rich or Poor:**

The classification of a country as rich or poor is often based on its Gross Domestic Product
(GDP) per capita, which represents the average economic output per person in the country.
Generally, countries with higher GDP per capita are considered relatively richer, while those
with lower GDP per capita are considered relatively poorer. However, this classification can be
influenced by other factors such as income distribution, quality of life, social indicators, and
access to basic services.
2. **GDP (Gross Domestic Product) & NDP (Net Domestic Product):**

- **GDP:** It is the total value of all goods and services produced within a country's borders,
regardless of whether the production is by domestic or foreign factors of production.

- **NDP:** It is the GDP minus depreciation (or the value of worn-out or used-up capital)
during a particular period. It provides a measure of the net production in an economy.

3. **Methods for Calculating GDP:**

- **Production (Value Added) Method:** It sums up the value added at each stage of
production in various economic sectors.

- **Income Method:** It calculates GDP by summing up all incomes earned in the economy,
including wages, profits, and taxes.

- **Expenditure Method:** It calculates GDP by summing up all expenditures on final goods

and services in the economy.

4. **GDP Calculation by Expenditure Method:**

GDP by Expenditure = Consumption + Investment + Government Spending + (Exports -

Imports)

5. **Difference between Real GDP & Nominal GDP:**

- **Nominal GDP:** It is the GDP calculated using current market prices without adjusting for
inflation.

- **Real GDP:** It is the GDP adjusted for inflation, providing a more accurate measure of an
economy's size over time.

6. **Limitations of GDP Calculation:**

- **Excludes Non-Market Activities:** GDP does not consider non-market activities like
household work or the informal economy.

- **Ignores Income Distribution:** It does not reflect income distribution, and a country with
high GDP may have significant inequality.
7. **Purchasing Power Parity (PPP) vs. GDP:**

Purchasing Power Parity (PPP) is used to compare the relative value of currencies and the
cost of living between countries. It provides a more accurate reflection of economic well-being
and standards of living across different countries, as it considers price differences for similar
goods and services.

8. **Alternatives to GDP:**

- **Human Development Index (HDI):** A composite index that considers life expectancy,
education, and income.

- **Genuine Progress Indicator (GPI):** Accounts for economic activity while adjusting for
social and environmental factors.

- **Index of Sustainable Economic Welfare (ISEW):** Focuses on sustainable economic well-

being, accounting for factors like income distribution and environmental impact.

- **Happy Planet Index (HPI):** Measures well-being and environmental sustainability based
on life satisfaction, life expectancy, and ecological footprint.

Module 9.04

 Most difficult chapter. If you want you can do 10 questions from a single
slide. Better to read it last

1. Mention four goals for economic policy ?

2. Mention four goals for fiscal policy ?
3. What are the tools of fiscal policy ? draw a diagram ?
4. What are the effects of public expenditure on inflation ?
5. What are the three taxation type?
6. Mention three types of Fiscal policy ? define them ?
7. Relation between Budget Deficit and Inflation ?
 8. What is crowding in and out effect ?
9. Mention four difficulties for implementing fiscal policy ?
10.Mention three goals of monetary policy ?
11.When a bank makes a loan what happens to money supply?
12.Define money multiplier ?
13.Mention central bank’s role in money supply game?
14.Mention three tools of monetary policy ?
15.What is unconventional monetary policy tools ?
16.Write four difference between monetary and fiscal policy ?
17.Mention three options for government to boost up government revenue?

1. **Goals for Economic Policy:**

- Economic Growth

- Full Employment

- Price Stability (Low Inflation)

- Equitable Distribution of Income and Wealth

2. **Goals for Fiscal Policy:**

- Promote Economic Growth

- Control Inflation

- Reduce Unemployment

- Achieve Equitable Income Distribution

3. **Tools of Fiscal Policy:**

- Government Spending
 - Taxation

(Unfortunately, I can't draw diagrams directly, but imagine a diagram showing an arrow going
up for government spending and an arrow going down for taxation, indicating their effects on
the economy.)

4. **Effects of Public Expenditure on Inflation:**

- Increased public expenditure can lead to higher demand for goods and services, potentially
contributing to demand-pull inflation.

- If public expenditure exceeds available resources, it can lead to cost-push inflation as prices
rise due to shortages.

5. **Three Types of Taxation:**

- Progressive Taxation

- Regressive Taxation

- Proportional Taxation

6. **Types of Fiscal Policy:**

- **Expansionary Fiscal Policy:** Involves increasing government spending or reducing taxes

to stimulate economic growth.

- **Contractionary Fiscal Policy:** Involves decreasing government spending or increasing

taxes to control inflation.

- **Neutral Fiscal Policy:** Aims to keep the economy stable without actively trying to
stimulate or restrain it.

7. **Relation between Budget Deficit and Inflation:**

 - A large and persistent budget deficit can lead to increased government borrowing, which
may increase demand for loanable funds and compete with private borrowers, potentially
raising interest rates and inflation.

8. **Crowding In and Out Effect:**

- **Crowding In:** Increased government spending may stimulate private investment, leading
to increased economic activity.

- **Crowding Out:** Increased government borrowing can lead to higher interest rates,
reducing private investment and potentially offsetting the impact of fiscal policy.

9. **Difficulties for Implementing Fiscal Policy:**

- Time Lags

- Political Considerations

- Difficulty in Accurate Forecasting

- Potential Impact on Private Sector Behavior

10. **Goals of Monetary Policy:**

- Price Stability (Low Inflation)

- Full Employment

- Stable Economic Growth

11. When a bank makes a loan, the money supply increases. This is because the bank creates a
new deposit (liability) for the borrower, which adds to the overall money supply.

12. **Money Multiplier:** It represents the ratio by which an initial change in the money
supply will ultimately change the total money supply through the banking system's lending and
deposit processes.
13. **Central Bank's Role in Money Supply Game:**

- Control the Reserve Requirement Ratio

- Conduct Open Market Operations

- Set the Discount Rate

14. **Tools of Monetary Policy:**

- Open Market Operations

- Reserve Requirement

- Discount Rate

15. **Unconventional Monetary Policy Tools:**

- Quantitative Easing (QE)

- Forward Guidance

- Negative Interest Rates

16. **Differences between Monetary and Fiscal Policy:**

- **Authority:** Monetary policy is controlled by the central bank, while fiscal policy is
determined by the government.

- **Tools:** Monetary policy uses interest rates and money supply, while fiscal policy uses
government spending and taxation.

- **Speed:** Monetary policy can be implemented more quickly than fiscal policy.

- **Scope:** Monetary policy affects the entire economy, while fiscal policy can target
specific groups.
17. **Options for Government Revenue:**

- Direct Taxes (Income tax, corporate tax)

- Indirect Taxes (Sales tax, excise tax)

- Non-Tax Revenues (Fees, fines, royalties)

- Borrowing (Debt issuance)

Module 9.06

1. What are the four types of Economic system ?

2. Mention four Characteristics of Traditional , command, Market and
mixed economy ?
3. What is market failure ? Write four causes for market failure ?

1. **Four Types of Economic Systems:**

- Traditional Economy

- Command Economy

- Market Economy

- Mixed Economy

2. **Characteristics of Different Economic Systems:**

**Traditional Economy:**

- Based on customs, traditions, and historical practices.

- Limited technological advancement and innovation.

- Little surplus or economic growth.

 - Economic roles and activities are often inherited.

**Command Economy:**

- Centralized government control over resources and production.

- State determines production, consumption, and resource allocation.

- Limited consumer choice and lack of competition.

- Focus on equity and distribution.

**Market Economy:**

- Decentralized decision-making by individuals and firms.

- Competition and profit motive drive resource allocation.

- Wide variety of goods and services available.

- Limited government intervention.

**Mixed Economy:**

- Combination of market forces and government intervention.

- Government regulates certain sectors and provides public goods.

- Private ownership of resources and individual entrepreneurship.

- Balances individual freedom with social welfare.

3. **Market Failure:**

Market failure refers to situations in which a free market, left to its own devices, does not
efficiently allocate resources or achieve the best possible outcome for society. It is a situation
where the equilibrium in a market does not result in the most efficient allocation of resources.
 **Causes of Market Failure:**

- **Externalities:** When the actions of producers or consumers affect third parties who are
not directly involved in the transaction.

- **Public Goods:** Goods that are non-excludable and non-rivalrous, leading to

underprovision in a market.

- **Information Asymmetry:** When one party in a transaction has more or better

information than the other, leading to adverse selection or moral hazard.

- **Market Power:** When a single firm or a small group of firms has significant influence
over market prices and output, potentially leading to monopolistic or oligopolistic behavior.

Module 9.08

1. What are the export strategy of Bangladesh ?

2. How Bangladesh can achieve product diversification for export ?
3. Mention four challenges of enhancing export of Bangladesh ?

1. **Export Strategy of Bangladesh:**

Bangladesh has pursued several strategies to enhance its exports, with a focus on the ready-
made garments (RMG) sector. The country's export strategy includes:

- **Textile and Apparel:** Bangladesh is a major global exporter of textile and garment
products, benefiting from low labor costs.

- **Labor-Intensive Industries:** Other labor-intensive industries like leather, footwear, and

home textiles.

- **Agricultural Products:** Exports of agricultural products, such as seafood, jute, and tea.

2. **Achieving Product Diversification for Export in Bangladesh:**

 To achieve product diversification for export, Bangladesh can take the following steps:

- **Invest in Research and Development:** Promote innovation and research to develop new
products and improve existing ones.

- **Skill Development:** Enhance the skills of the workforce to support industries beyond
textiles and garments.

- **Infrastructure Development:** Improve transportation, logistics, and energy

infrastructure to facilitate diverse exports.

- **Trade Agreements:** Negotiate trade agreements to access new markets and expand the
range of exportable goods.

3. **Challenges of Enhancing Export in Bangladesh:**

- **Dependency on Textiles and Garments:** Overreliance on the RMG sector exposes

Bangladesh to external shocks and market fluctuations.

- **Infrastructure Constraints:** Inadequate transportation, energy, and logistical

infrastructure can hinder efficient exports.

- **Skills Gap:** Limited availability of skilled labor for diversifying into higher-value
industries.

- **Trade Barriers:** Trade barriers and non-tariff measures in target markets can impede
export growth.

Bangladesh's efforts to enhance exports involve overcoming these challenges while diversifying
its product base to ensure sustainable economic growth.

Module 9.09
1. What are the Criteria for LDC Graduation ?
2. Mention four challenges of Bangladesh’s LDC graduation ?
3. Define HAI?
4. Define EVI?
 5. Draw a diagram showing timeline of Bangladesh’s LDC graduation ?
6. Mention three impact of graduation?
7. Mention four way forward for Bangladesh both at domestic and
international level ?
8. Solve last two slides for mcq

Certainly, I can help with the information you've provided:

1. **Criteria for LDC Graduation:**

The criteria for Least Developed Country (LDC) graduation are based on a combination of
income, human assets, and economic vulnerability. These criteria are reviewed and determined
by the United Nations and include factors such as Gross National Income (GNI) per capita,
Human Asset Index (HAI), and Economic Vulnerability Index (EVI).

2. **Challenges of Bangladesh’s LDC Graduation:**

- Dependence on a Few Industries: Overreliance on the garment sector and limited

diversification.

- Infrastructure Deficiencies: Inadequate transportation, energy, and digital infrastructure.

- Poverty and Inequality: Challenges in reducing poverty and income inequality.

- Vulnerability to Climate Change: Exposure to natural disasters due to its geographic location.

3. **HAI (Human Asset Index):**

HAI is a composite index used in assessing a country's human development. It takes into
account factors such as health (life expectancy at birth) and education (gross and net
enrollment ratios for primary, secondary, and tertiary education).

4. **EVI (Economic Vulnerability Index):**

 EVI is a composite index used to measure a country's economic vulnerability to external
shocks. It considers factors such as exposure to natural disasters, economic diversification, and
dependence on agriculture, forestry, and fisheries.

5. **Timeline of Bangladesh’s LDC Graduation:** (Note: This is a simplified representation)

!*Timeline of Bangladesh’s LDC Graduation+(https://i.imgur.com/q1QyXHz.png)

6. **Impacts of Graduation:**

- Access to International Finance and Trade on Different Terms

- Changes in Eligibility for International Support and Assistance

- Enhanced Image and Perceptions for Investment

7. **Ways Forward for Bangladesh:**

- **Domestic Level:**

1. Diversify Export Base and Industries.

2. Invest in Infrastructure Development.

3. Address Social and Income Inequalities.

4. Strengthen Disaster Preparedness and Climate Resilience.

- **International Level:**

1. Strengthen Bilateral and Multilateral Trade Agreements.

2. Promote Investment and Technology Transfer.

3. Collaborate on Climate Change Mitigation and Adaptation.

4. Participate Actively in International Organizations and Forums.

8. Since I can't see the content of the last two slides or the specific multiple-choice questions
you're referring to, could you please provide the questions or context for those slides? I'd be
happy to help answer them based on the information you provide.