1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION –  APRIL 2014

BBM – II SEMESTER

MACRO ECONOMICS

Duration: 3 Hours                                                                                             Max. Marks: 100

SECTION – A

1. Answer ALL the following questions. Each carries 2 marks.                 (10 x2 = 20)

 

1. What is meant by disguised unemployment?
2. Define National income.
3. What is meant by Economic growth?
4. Give the meaning of human development index.
5. Explain any two characteristics of direct taxes.
6. State any two features of mixed economy.
7. What is meant by a Budget?
8. Give an example of direct and indirect tax.
9. Give the meaning of the term life expectancy.
10. What is meant by devaluation of a currency?

 

SECTION – B

1. Answer any FOUR Each carries 5 marks.                                  (4 x 5 = 20)

 

11. Elaborate on the main features of
12. Explain the various methods followed to calculate the National Income.
13. What is poverty? Explain its demerits.
14. State the difference between the fixed and floating exchange rate.
15. Differentiate between Personal Income & Per Capital Income.
16. What are the measures that have to be devised to raise the rate of savings?

SECTION – C

• Answer any THREE Each carries 15 marks                          (3x 15 = 45)

 

17. What is Monetary Policy? State the various quantitative methods of credit control?
18. Explain the main causes and measures to control over population in India.
19. What is meant by a Business Cycle? State the various characteristics of the different phases of business cycles.
20. Explain any two instruments of the fiscal policy in brief.
21. State the main features of a knowledge economy. Is knowledge economy the need of todays world.   State 3 opinions which are for it and against it.

 

SECTION – D

1. Compulsory Question – Case study                                               (1 x 15 = 15)

22.

The following is the National Income accounting of Swaziland’s economy for the year 2012-13.  The revenue obtained from the primary sector was 5000 crores, from secondary sector was 5700 crores and from the service it was a bountiful 350000 crores.  In the calculation of the secondary sector income during the mid year assessment, they found that raw material to the tune of 500 crores was added to the final  accounts, which actually had to become a finished product for the year 2014.    Then calculated, In calculation of secondary sector accountant they also found the depreciation was larger than that in the year 2011.   The government brought in various measures to promote the exports during the period 2012 -13 which was intended to continue for the next five years period.  They decided that 65percent of returns from primary sector, 50% from the secondary and 75% of the returns from the service sector, they will export to foreign countries there by leading to increase in the foreign exchange for the country as well leading to an increase in the GNP.

 

Questions:

1. Keeping the above case study, explain how National income is calculated?
2. What is double counting? How can it be prevented (In the context of the above case)
3. State the difference between GNP and GDP.

 

                                               

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St Josephs College of Commerce

 

Time 3 hours            I  BBM(Semester II)            Macro Economics

Section A

Answer the following questions.  All questions are compulsory                  2 x10 =20

22. What is meant by disguised unemployment
23. State the meaning of National income
24. What is meant by Economic growth
25. Give the meaning of human development index
26. Explain any two characteristics of direct taxes
27. State any features of mixed economy
28. Explain the meaning of a Budget
29. Give an example of direct and indirect tax
30. Give the meaning of the term life expectancy.
31. What is meant by devaluation of a currency?

 

Section B

 

Answer any four of the following questions in 15 to 20 sentences                           5 x 4 =20

32. State the main features of a socialism
33. Explain the various methods followed to calculate the National Income
34. Explain the main features and demerits of poverty
35. State the difference between the fixed and floating exchange rate
36. State the merits and demerits of capitalism

 

Section C

 

Answer any three of the following questions                                                   15 x 3 =45

 

37. What is Monetary Policy state the various quantitative methods of credit control.
38. Explain the main causes and control of over population
39. Explain the characteristics of the business cycle and measures to control them.
40. Explain any two instruments of the fiscal policy in brief.
41. State the main features of a knowledge economy. Is knowledge economy the need of todays world state 3 opinions which are for it and against it.

 

Section D

The following is the National Income accounting of Swaziland’s economy for the year 2012-13.  The revenue obtained from the primary sector was 5000 croores, from secondary sector was 5700 crores and from the service it was a bountiful 350000 crores.  In the calculation of the secondary sector income during the mid year assessment, they found that raw material to the tune of 500 crores was added to the final  accounts , which actually had to become a finished product for the year 2014.    Then calaculated, In calculation of secondary sector accountant they also found the depreciation was larger than that in the year 2011.   The government brought in various measures to promote the exports during the period 2012 -13 which was intended to continue for the next five years period.  They decided that 65percent of returns from primary sector, 50% from the secondary and 75% of the returns from the service sector, they will export to foreign countries there by leading to increase in the foreign exchange for the country as well leading to an increase in the GNP .

1.Keeping the above case study, explain how National income is calculated?

2.What is double counting?  How can it be prevented(In the context of the above case)

3.State the difference between GNP and GDP.

 

 

 

Answer Scheme

I BBM Macro Economics

1. What is meant by disguised unemployment

Refers to a unemployment situation where people are rendered partially enemployed for most time of the year

2. State the meaning of National income

Aggregate value of goods ands service produced in the country during a year.  It takes into account the final value of goods and services

3. What is meant by Economic growth

The economic growth of all three sectors of a economic system which grows in terms of the GDP is refered to as economic growth

4. Give the meaning of human development index

Development of a country which indicates the level of development its citizens achieve in terms of education, health and livelihood

5. Explain any two characteristics of direct taxes

They are direct in nature ,

They are one time payment

They are progressive in nature

Cannot be evaded

 

6. State any features of mixedeconomy

The govt has a active role in price fixation at times

Working of both public and private sector

7. Explain the meaning of a Budget

Fianancial statement which indicates the head of revenue and heads of expenditure for a particular fianancial year

8. State two example of indirect tax

VAT, customs duty, sales tax

9. Give the meaning of the term life expectancy.

It is a terms which explains the average expectancy of life of a human being at birth

10. What is meant by devaluation of a currency?

The forceful decrease in the value of a particular country’s current to tied over the defict in the balance of payment is devaluation

 

Section B

1. State the main features of a socialism
2. Entire production is controlled by the govt

Fluctuation of vagaries of business cycle is less.  Products demanded by the consumers are produced , no private property,  consumer goods production are given more importance than the luxury goods.

3. Explain the various methods followed to calculate the National Income

There are three methods followed

Product method  the end value of goods produced is taken in to account

Expenditure methos   a method where the expenditure incurred in the form of rent, wages, interest and profit are calculated

Income method it is a method which shows the total income  that the factors of production obtain in the form from land , labour, capital and investment

 

4. Explain the main features and demerits of poverty

High population, illiteracy, ignorance, poverty , lack of basic necessities

 

Demerits , brings down the economic development

Standard of living decreases , low education , low value system , high rate of corruption

5. State the difference between the fixed and floating exchange rate

Whan a currency is fixed according to the rate of the US dollr it is termed as fixed exchange rate

Where as the floating exchange rates is when the rate of currency changes due the effect of demand and supply of currency in the market

6. State the merits and demerits of capitalism

Leads to profitability, increases competition, consumer is given importance better products are produced.

The gap between the rich and the poor increases. The main motive is profit the other values are left, more concentration on profits and goods are high priced where the rich are only able to buy

 

Section C

What is Monetary Policy?state the various quantitative methods of credit control.

Monetary policy is theeconomic policy of the govt to control themovement of money supply in the economic system

Types- 12marks

 

Open market operation refers to buying and selling of securits , bond in the open  market

Bacnk rate policy

Reserve ratio includes cash reserve ratio and statutory reserve ratio where commercial are expected to keep a proportion of their reserves with the centralbank of a country

 

 

 

42. Explain the main causes and controlof over population(71/2 , 71/2 marks)

Leads to poverty

Increases birth rate

Low std of living

Hamper economic development of the country

More pressure on land

Less income

 

Increase education level, increase income of the people, birth control measures

Development of the country

 

43. Explain the characteristics of the business cycle and measures to control them.

Meaning  3 marks – the upward and down turn of economic activity is termed as business cycle

12 marks- Wave like movement one phase follows the other affects all sectors and countries.  Adversely affects the producer goods  industry

44. Explain any two instruments of the fiscal policy in brief.

Meaning 3 marks

Two instruments are public revenue , public expenditure , public debt 6 msrks each

 

45. State the main features of a knowledge economy. Is knowledge economy the need of todays world state 3 opinions which are for it and against it.

It is more technology driven

More competitive in nature

Leads to faster growth

Increases intellectual power of the manpower of a nation

Features of knowledge economy –  5 marks

Merits and demerits- 10 marks

 

 

 

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