BCom SY BCom Sem 3 BCom Sem 3 (2017 2018) March 2018 BUS. ECONOMICS Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 a) Explain the following terms (Any 5) Peak of a business cycle 10 marks
   • iv. Marginal efficiency of capital
   • v. LM curve
   • b) Choose the correct option and rewrite the statements. 10
   • i. The following is not the subject matter of macro economics
   • a) National income accounting b) Law of demand and supply
   • ii. Which of the following is the sum of all income actually received by the people in the
   • iii. According to Keynes’, in order to increase employment we have to increase aggregate
   • a) supply b) output
   • c) demand d) investment
   • iv. Investment will be in equilibrium when become equal to the given current rate of
   • a) Marginal Efficiency of Capital b)
   • c) Savings d) None of the above
   • v. Investment multiplier is MPS
   • a) directly related to b) of
   • c) not related to d) equal to
   • vi. Which of the following will cause the LM curve to shift to the right ?
   • a) Increase in money supply b) Decrease in money supply
   • c) An increase in the rate of interest d) Decrease in government expenditure
   • vii. Supply side economics aims at increasing income by The value of money multiplier is determined by
   • c) Currency deposit ratio and reserve ratio d) None of the above
   • ix. According to the Fisher equation of exchange, an increase in the money supply is most likely to lead to inflation if,
   • a) The velocity of circulation decreases b) The number of transactions decreases
   • c) There is deflation d) The velocity of circulation and the number of transactions is constant
   • x. Government’s budgetary policy during inflation should aim at
   • c) Increase in investment d) Lowering taxes
2. Q2 Answer any two of the following. 20 marks
   • a) Discuss the circular flow of national income in a three and a four sector economy
   • b) How is the concept of Green National income different from that of the conventional measure of national income? Discuss the relationship between national income and economic
   • c) State and explain Say’s law of market. On what grounds did Keynes criticize it?
3. Q3 Answer any two of the following 20 marks
   • a) What is effective demand? Discuss Keynes’ equilibrium level of output and employment
   • b) i. Suppose the consumption function (INR billion) for a closed economy is C = 20 + 0.8Ya Suppose that disposable income increases from. INR 50 billion to INR 150 billion. By how much would the consumption and savings rise? What has happened to the savings rate? li. Distinguish between Gross and Net Investment & Autonomous and Induced
   • c) Explain with an example and illustrative diagrams the working of investment multiplier
4. Q4 Answer any two of the following 20 marks
   • a) Discuss IS curve and bring out its properties
   • b) Discuss the nature of the short run and long-run Phillip’s Curve
   • c) What is stagflation? Discuss the causes and consequences of stagflation
5. Q5 Answer any two of the following 20 marks
   • a) What is money supply? Discuss the determinants of money supply
   • b) Examine the effects of inflation on economic activities and different sections of people
   • c) How is interest rate determined? Discuss the drawbacks of liquidity preference theory of
   • (4) LM
   • (3) Ad,
   • (a) Hah
   • 2. seat 20
   • 3. Scat 20
   • (ii) ,
   • (31) IS

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