Brief Answer Questions: Attempt ALL questions.
[10 × 2 = 20]What is dynamic analysis in macroeconomics?
Prepare a list of types of unemployment.
What are the components of money market equilibrium under classical theory of employment?
Derive government expenditure multiplier.
Write any four determinants of investment function.
Differentiate between money flow and real flow.
State the scope of macroeconomics.
Write any two implications of Say's law of market.
Double counting may occur under final product method. Why?
What are the determinants of effective demand?
Short Answer Questions (Any Five)
[5 × 10 = 50]Derive the LM curve.
Describe the structure of financial market of Nepal.
Explain the current trends of global economy.
What is trade cycle? Describe its characteristics.
Let, C = 400 + 0.7 (Y-T), T = 120 + 0.2Y, I = 500, G = 400, X = 100, M = 5 + 0.1Y.
i. Determine equilibrium output and trade balance.
ii. What will be the effect on equilibrium output and trade balance when government expenditure decreases by Rs. 100 billions and tax rate increases by 5%?
iii. Compute government expenditure and foreign trade multipliers.
Suppose, saving functions, S = -200 + 0.3Y, investment function, I = 100 + 0.1Y.
i. Determine equilibrium output, saving and investment.
ii. What will be the effect on equilibrium output saving and investment when (a) planned saving increases by Rs. 40 billions and (b) MPS increases to 0.4?
iii. Do these conditions reflect paradox of thrift? Give reasons.
Analytical Answer Questions (Any Two)
[2 × 15 = 30]Explain the determinants of financial inclusion. What is the current status of financial inclusion in Nepal? Discuss.
What is fiscal policy? Explain its types and objectives.
Consider the following data:
| Description | Rs. in billions |
| Dividends | 459 |
| Business interest payments | 946 |
| Addition to stocks | -3 |
| Personal taxes | 413 |
| Personal consumption expenditure | 11943 |
| Govt. and business transfers | 2000 |
| Net indirect taxes | 739 |
| Net fixed capital formation | 1671 |
| Depreciation | 708 |
| Current transfers from rest of the world | 1182 |
| Corporate profits | 2059 |
| Exports | 1048 |
| Rental income | 682 |
| Government consumption | 757 |
| Wages and salaries | 8000 |
| Imports | 1540 |
| Interest | 264 |
| Employer's contribution to social security | 1186 |
| Social insurance payments | 1000 |
a. Compute GDP MP by both expenditure and income methods.
b. Compute personal income.
c. Differentiate nominal GDP and real GDP.