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Brief Answer Question
Attempt All question
Write any four features of macroeconomics.
What is effective demand?
What are the components of labour market equilibrium? 2
What is profit-push inflation? 2
Write any two implications of Say's Law of Market. 2
List the economic values that are used to computing rate of inflation.
What are the cost drivers of globalization? 2
What are the assumptions of psychological law of consumption function? 1
Point out the core values of economic development? 1
What are the components of financial inclusion? 2
Descriptive Answer Question
Attempt any Five questions
Describe the static analysis of macroeconomics. ②
Derive investment and tax multipliers. 2
Explain the factors that causes poverty in Nepal. 2
Assess the features of monetary policy (2023-24) of Nepal.
Consider the following data for a hypothetical economy: \[ [(2+2+2+2)+2] \]
| Year | Output of A | Price of A | Output of B | Price of B |
| 2021 | 300 | 900 | 1000 | 80 |
| 2022 | 350 | 1000 | 1300 | 120 |
| 2023 | 375 | 1200 | 1700 | 140 |
a. Compute nominal GDP, real GDP, GDP deflator and rate of inflation.
b. Why the real GDP is better measurement of welfare than nominal GDP?
Consider the following schedule:
| Period | t₁ | t₂ | t₃ | t₄ | t₅ |
| Yd: | 0 | 200 | 400 | 600 | 800 |
| C: | 80 | 240 | 400 | 560 | 720 |
| S: | -80 | -40 | 0 | 40 | 80 |
a. Derive linear consumption and saving functions.
b. Graph Yd and C and explain three propositions of psychological law of consumptions function.
Analytical Answer Question
Attempt any Two questions
Explain the contraction phases of trade cycles. What types of fiscal measures would you apply to stabilize the economy? [8+7]
Explain the process of measuring GDP by product method with examples. What types of conceptual difficulties are encountered in the measurement of GDP by product method? [10+5]
Let, the structural equations for the money market and product market in a hypothetical economy are given as follows:
I = 400 - 4000 i;
Mt = 0.5 Y
T = 200 + 0.2Y
Msp = 200 - 2000 i;
C= 400 + 0.75(Y-T)
M = 800
G = 500,
1∅
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ii. What will be the simultaneous effect on the equilibrium rate of interest and output when government increases its planned expenditure by Rs. 100 billion and central bank increases money supply by Rs. 200 billion?
iii. Are these fiscal and monetary measures effective to control inflation? Give your comments. [6+6+3]