BCom TY BCom Sem 6 BCom Sem 6 (2018 2019) April 2019 BUSINESS ECONOMICS VI Question Paper - Mumbai University | munotes

Questions asked in this paper

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• 2. Figures to the right indicate full marks

1. Q1 A) Select the right answers and rewrite the statements (Any 10) : 10 marks
2. Q1 According to the modern theory of international trade, is responsible for
   • c) Money d) None of these
3. Q2 refers to the rate at which a country’s exports exchange against its imports
   • a) Foreign exchange b) Balance of payments
   • c) Terms of Trade d) Investment rate
4. Q3 Marshall and Edgeworth introduced a geometrical device to explain the gains from trade which is known as
5. Q4 policy has the following drawbacks
   • a) Consumers have to pay higher price Producers get higher profits
   • c) Quality of goods may be affected d) All of these
6. Q5 A tariff
   • a) Increases the volume of trade b) Reduces the volume of trade
   • c) Has no effect on volume of trade d) None of these
7. Q6 occurs when a group of countries agree to have free movement of factors of
8. Q7 Rich countries have balance of payments deficit
   • a) Sometimes b) Never
9. Q8 The official reduction in the value of a currency with respect to other currencies is known
   • a) Revaluation b) Appreciation
   • c) Devaluation d) Depreciation
10. Q9 The declaration recognised that the TRIPs agreement should protect public
    • a) Bali b) Doha
11. Q10 Foreign exchange market is
    • a) Grouping, by electronic means b) Located only in London
    • c) Located only in New York d) None of these
12. Q11 Hedgers enter into a foreign exchange market to
13. Q12 Holding everything else constant, an increase in interest rates in India will lead to
    • a) Capital inflows into India b) Depreciation of the INR
    • c) Capital outflows from India d) A decrease in demand for goods and
14. Q1 B) State whether the following statements are True or False. (Any 10) 10 marks
15. Q1 Adam Smith gave the first classical theory of international trade
16. Q2 Net barter terms of trade is also known as commodity terms of trade
17. Q3 If the cost ratios are equal there will be gain to both the countries and there will be
18. Q4 The cheap foreign labour argument is a legitimate argument against free trade because the cheap labour leads to low costs of production
19. Q5 increases its tariff then imports will be more expensive
20. Q6 Nepalis a founder member of the European Union
21. Q7 in the current account of BOP implies that the country is lending to foreigners more than foreigners lending to it
22. Q8 Monetary and fiscal policies are used to correct BOP disequilibrium
23. Q9 The IMF has been given the mandate to negotiate multilateral rules in services
24. Q10 Majority of retail foreign exchange trading happens in forward market
25. Q11 If the U.S. dollar appreciates relative to the Swiss franc, Swiss chocolate will become cheaper in the U.S.A,
26. Q12 Sterilised intervention is done through open market operations any two of the following: (15)
    • a) Bring out the differences between the Ricardian theory of international trade and the modern theory of international trade
    • b) What are the factors affecting terms of trade?
    • c) Discuss the J.S. Mill’s theory of reciprocal demand any two of the following: (15)
    • a) Discuss the arguments in favour of the policy of free trade
    • b) Explain the economic effects of import tariffs
    • c) What are the reasons for Britain exiting (Brexit) the European Union?
27. Q4 Attempt any two of the following: 15 marks
    • a) Discuss the structure of balance of payments of a country
    • b) Explain different measures to correct deficit in the balance of payments
    • c) Discuss the WTO agreements with references to GATs
28. Q5 Attempt any two of the following: 15 marks
    • a) Discuss the factors influencing demand for and supply of foreign exchange
    • b) Discuss the absolute and relative versions of the purchasing power parity theory
    • c) Explain managed flexible exchange rate system in India
29. Q6 Write short notes on any four of the following: 20 marks
    • a) Short comings of the Heckscher — Ohlin theory of international trade
    • b) Objectives of commercial trade policy
    • c) The Marshall — Lerner condition
    • d) Spot and forward exchange rates
    • e) Types of economic integration
    • f) Functions of foreign exchange market
    • A) sat
30. Q2 carat
31. Q3 AN
    • A) WA
    • S) ax

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