BA 7103 ECONOMIC ANALYSIS FOR BUSINESS

Part A (2 MARKS)

UNIT-I

1. Define Economics. May 2016

Economics is the study of how individuals and societies choose to use the scarce resources that nature and
previous generations have provided.

2. State the meaning of efficiency. Nov 2014

Efficiency is the condition in which the economy is producing what people want at the least
possible cost.

3. Brief on externalities. Nov 2014

An externality refers to the by-product of a transaction that affects someone not immediately
involved in the transaction.

4. What do you mean by scarcity?

Scarcity is one in which goods are limited relative to desires.

5. Differentiate Micro and Macro Economy. May 2016 Nov 2011 Nov 2012 Nov 2013
Macro economics is the study of the economic system as a whole. It is related to issues such as
determination of national income, savings, investment, employment at aggregate levels, tax collection,
government expenditure, foreign trade, money supply etc., Micro economics focuses on the behavior of the
individuals, firms and their interaction in markets.

6. List out the three fundamental economic problems. Nov 2011 Nov 2013
What to produce?
How to produce?
For whom to produce?

7. What do you mean by positive externalities?

When the impact on the bystander is beneficial, the externality is called a positive externality.

Immunizations
Restored historic buildings
Research into new technologies
8. What do you understand by Productive efficiency? Nov 2012
A situation in which an economy cannot produce more of one good with out producing less of another
good; this implies that the economy is on producing possibility frontier.

9. State the meaning of micro economics.

Micro economics focuses on the behavior of the individuals, firms and their interaction in markets.

10. What is macroeconomics?

Macro economics is the study of the economic system as a whole. It is related to issues such
as determination of national income, savings, investment, employment at aggregate levels, tax collection,
government expenditure, foreign trade, money supply etc.

11. What is economic efficiency?

Economic efficiency is that an economy produce the highest combination of quantity and
quality of goods services given its technology and scare resources.

12. What do you mean by PPF?

The production possibility frontier (PPF) represents the point at which an economy is most
efficiently producing its goods and services and, therefore, allocating its resources in the best way possible.

13. What is mixed economy?

An economy where economic decisions are made partly by the government and partly
through the market.

14. What do you understand by production possibility curve? Nov 2015

A curve showing all the possible combinations of two goods that a country can produce
within a specified time period with all its resources fully and efficiently employed.

15. What are the reasons behind Economic prolems?

Unlimited wants, Limited or scarce means, Choice / Alternative uses of Means.

16. What is the meaning of capitalist economy?

Capitalist economy is that economy in which ownership of means of production and property is
vested in private hands. The basic economic problems are solved with the help of price mechanism.
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17. List out the things that are elements of economic growth? Nov 2015
Human resources, Natural resources, Capital formation, technological change and innovation.

18. Write short notes on Business cycle stabilisation?

This term generally refers to demand management by monetary and fiscal policy to reduce normal
fluctuations and output, sometimes referred to as keeping the economy on an even keel.

19. What is crisis stabilisation?

The term can also refer to measures taken to resolve a specific economic crisis i.e., exchange rate
crisis or stock market crash, in order to prevent the economy developing recession or inflation.

20. Name some tools of fiscal policy?

Taxation, Government spending, Tax incentives.

21. What are automatic stabilizers?

Automatic stabilisers are an economic policy or porogram that increases or decreases automatically
to offset the current economic trend without government assistance.

22. What are the tools of automatic stabilizers?

High growth, Reflation, Tax system and Unemployment insurance.

23. Explain FDI and FPI.

FDI: Foreign direct investment refers to a long term participation for eg by country A into country
B. It usually involves participation in management, joint venture, tansfer of technology and expertise.
FPI: Foreign portfolio investment means investmens financed with foreign money but operated by
domestic residents.

24. Compare positive vs negative externalities.

A positive externality is that it enhances labour participation, and therefore reduces demand for
social security provisions, however a negative externality is that it hinders integration of minority groups in
the society which will eventually cause these members of minority groups to be less productive.

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25. What are the roles of an economist?
Analysis of external factors
Analysis of internal factors
Specific functions
o Sales forecasting
o Market research
o Economic analysis of competing firms
o Pricing problem of the industry
o Evaluation of capital projects.

Part B (16 MARKS)

1. Enumerate and explain the fundamental economic problems. Nov 2014 Nov 2013 Nov 2012 PG
66-67

2. Examine the factor that determines the economic growth. PG 33

3. Explain production possibility frontier. State the importance of PPF. May 2016 PG 31-32

4. How do markets solve the three economic problems? Explain with suitable examples. PG 27-28

5. (i)Explain the themes of economics. Nov 2015 May 2016 Nov 2014 PG 22- 24

(ii) Compare productive efficiency Vs economic efficiency. PG 23-24

6. As an economist how will you plan for productive efficiency economic efficiency Nov 2011 PG
23-24

7. Explain the positives and negatives of economic externalities Nov 2011 PG 42-44

8. How can economic growth and stability be balanced Nov 2011 PG 32-33

9. Discuss the three fundamental economic problems and suggest suitable measures to overcome
these problems. PG 66- 67

10. Enumerate the economic role of Government and Markets. Examine their role in the present

economy scenario Nov 2015 Nov 2013 Nov 2012 PG 41-42

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 UNIT-II

Part A (2 MARKS)

1. Define Market.
Market is the place where the interaction between buyers and sellers happen and with that
interaction there is every possibility of a positive trade.

2. How does market equilibrium occurs? Nov 2015 Nov 2014

Market equilibrium is a situation in which at the prevailing price , consumers can buy all of a
good they wish and producers can sell all of the good they wish.

3. What do you mean by consumer surplus? Nov 2012

The difference between the amount that a consumer would be willing to pay for a
commodity and the amount actually paid.

4. State the meaning of market economy.

An economy where economic decisions are made through the market and not
through impulse. Purchase impulse has nothing to do with and only market decides whatever.

5. What is marginal rate of substitution?

The amount of one good(Y) that the consumer is prepared to give up in order to obtain
one extra unit of another good(X). i.e. Y / X.

6. What do you mean by consumer equilibrium?

A consumer is said to be in equilibrium when he regards his actual behavious as the best possible
under the circumstances feels no urge to change his behavious as long as circumstances remain
unchanged.

7. What is the elasticity of demand? Nov 2011

A measure of the responsiveness of quantity demanded to a change in one of its
determinants (eg. Price or Income).

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 8. What is autonomous demand and negative demand?
A negative demand occours when an individual or firm making a decision does not have to pay the
full cost of the decision .

9. State the importance of economics of scale. Nov 2014

Economies of scale refer to the notion of increasing efficiencies of the production of goods as the
number of goods being produced increases. Typically the average cost of producing a good will diminish
as each additional good is produced, since the fixed costs are shared over an increasing number of goods.

10. State the law of demand. May 2016 Nov 2012

As price increases, demand decreases, other things held constant.

11. What do you mean by Income effect?

The effect of a change in price on quantity demanded arising from the consumer becoming
better or worse off as a result of the price change.

12. What are diseconomies of scale? Nov 2013

Decreasing returns to scale, or diseconomies of scale, refers to an increase in a firms
scale of production, which leads to higher average costs per unit produced.

13. What are returns to scale? Nov 2013

The rate at which output increases when all inputs are increased proportionately.

14. Which is called autonomous demand?

Autonomous demand for a commodity is one that arises independent of the demand for any other
commodity.

15. Define the law of diminishing marginal utility? May 2016

The law of diminishing marginal utility holds that as the amount of good consumed
increases,
the marginal utility of that good tends to diminish.

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 17. What are the factors influencing the market demand?
Price of the commodity, Income of the consumer, Tastes and preferences, Prices of related goods,
Advertisement and sales propaganda, consumers expectation, growth of population, wather conditions, tax
rate, availability of credit, pattern of saving, circulation of money.

18. What is opportunity cost?

Opportunity cost refers to the value of goods and services forgone.

19. What do you mean by Production function?

The mathematical relationship between the output of a good and the inputs used to produce it.

20. What do you mean by consumer behavior? Nov 2015

Consumer behaviour is the study of when, why, how and where people do or do not buy
product, it blends elements of psychology, sociology, social anthropology, and economics.

21. What is measurement of utility?

We measure utility in units called utils which help us to understand the consumers behaviour. It is
useful analytically to distinguish between the three utility concepts. They are internal utility, total utility,
marginal utility

22. Why do cardinal measurement of utility is not possible?

Utility cannot be measured in cardinal numbers like 1, 2, 3, 4 ets as such utility derived from
different quantities of the goods can neither be added nor subtracted. It is clearly sought to measure
marginal utility indirectly in terms of money.

23. Define Law of equi marginal utility.

It is defined as A consumer gets maximum satisfaction when the ratio of marginal utilities of all
commoditites and their prices is equal.

24. Derive Marginal rate of Substitution.

Marginal rate of Substitution = Change in the consumption of one good / Change in the
consumption of another good.

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 25. What are the reasons for increasing returns to a factor?
Under utilisation of fixed factors, Indivisibility of factors, specialisation and division of labour.

Part B (16 MARKS)

1. Explain returns to scale and its types. What are the uses of returns to scale? PG 94-95

2. Describe the relation between production and cost function? PG 104-105

3. (i)Explain the determinants of demand and supply Nov 2011 PG 49-50, 65-66

(ii) Elucidate the factors determine the demand for a commodity with suitable examples. Nov
2012 PG 49-50

4. (i)Explain market equilibrium Nov 2011 PG 71-74

(ii)Explain the economies of scale PG 96-100

5. What is Production function? Discuss its managerial uses. Nov 2012 PG 84-86

6. (i)Explain elasticity of demand and supply. Critically evaluate market equilibrium and
consumer Equilibrium Nov 2015 Nov 2014 Nov 2013 PG 56-59, 68-70

(ii)Explain how elasticity of demand is useful for marking business decisions. PG 63-64

7. Discuss about analysis of short-run and long-run production function. What is the relation

between production and cost functions? Nov 2015 Nov 2014 Nov 2013 Nov 2011 PG 113-115

8. How does the cost related to consumer behavior? PG 99-101

9. What is market equilibrium? How does market equilibrium change Explain? May 2016 PG 72-
73

10. What is cost-output relationship? Explain the theory of cost in short-run. May 2016 PG 113-
115

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 UNIT-III

Part A (2 MARKS)

1. What are the components of product market?

Gross production, Buyers and sellers, Household consumption, Business investment, Government
purchases, Foreign exports, domestic business production, foreign imports.

2. Write a note on Factor Market'. May 2016

A factor market refers to markets where the factors of production are bought and sold such as the
labour markets, the capital market, the market for raw materials, and the market for management or
entrepreunerial resources.

3. What is product market?

Product markets are the markets to exchange consumer goods purchased by the households sector,
capital investment goods purchased by the business sector, and goods purchased by government and
foreign sectors.the seller of this production is primarily the business sector.

4. Give a brief account on competitive equilibrium.

Supply shows how sellers respond to changes in price and other variables that determine quantities
offered for sale. The interaction of buyers and sellers in the marketplace leads to competitive
eqilibrium.

5. Bring out the meaning of market efficiency. Nov 2015 Nov 2013
Market efficiency relies on the self correction process that eliminates shortages or surpluses. It also
presumes that the market is competitive and is not subject to market failures.

6. When imperfect markets occur? Nov 2015 Nov 2011

This situation occours when buyers or sellers do not have complete information about the product
being exchanged.

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7. List down the determinants of factor price. Nov 2011
Availability of prices and productive factors go a long way to influence production costs and hence
production prices in which factors of production and factor market is also a part. Factor price
determination is also referred to as theories of distribution.

8. What do you mean by factor price?

In a competitive factor market supply of productive factors is ulimited at fixed prices while in a
monopoly factor market, it varies with factor prices.

9. What do you mean by price leadership?

The strategy in which price haves higher command over the quantity demanded. Price remains stable
and thereoff, a great shift in the demand is marked by the price by itself. So when the total demand
and supply process is wholely run by one factor called price , its the price leadership strategy.

10. What is competitive market? Nov 2013

A competitive market is a one in which there will be more number of sellers and buyers each having
their own will and wish of the product everyone reaps profit with the help of lending features or so.

11. Differentiate characteristics of perfect and imperfect market?

Perfect market is many sellers selling identical products to many buyers whereas imperfect market is
sellers and buyers can influence in the determination of the price of goods, leading to efficiency
losses.

12. Mention the indicators of market efficiency?

The nature of information does not have to be limited to financial news and research alone; indeed,
information about political, economic and social events, combined with how investors perceive such
information, whether true or rumored, will be reflected in the stock price.

13. Mention the factors of production. Nov 2012

Factors of production are land, labour, capital and Entrepreneur

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 14. What are the features of perfect competition? May 2016
Freedom of entry and exit; this will require low sunk costs. All firms produce an identical or
homogeneous product. All firms are price takers, therefore the firm's demand curve is perfectly elastic.

15. What are the types of price discrimination?

First degree, second degree, third degree and combination of all are the four types of price
discrimination

16. What is a cartel?

an association of manufacturers or suppliers with the purpose of maintaining prices at a high level
and restricting competition.

17. What is price discrimination?

Price discrimination or price differentiation is a pricing strategy where identical or largely similar
goods or services are transacted at different prices by the same provider in different markets.

18. What do you mean by kinked demand?

The Kinked-Demand curve theory is an economic theory regarding oligopoly and monopolistic
competition. When it was created, the idea fundamentally challenged classical economic tenets such
as efficient markets and rapidly changing prices, ideas that underlie basic supply
and demand models.

19. What do you mean by natural monopoly?

A natural monopoly is a monopoly in an industry in which it is most efficient (involving the lowest
long-run average cost) for production to be permanently concentrated in a single firm rather than
contested competitively.

20. What are the factors influencing price discrimination?

As such, the factors that affect the degree of price discrimination includes the ability of such
customers to pay, the location, and an assessment of whether they will agree to pay. It may also be
affected by the type of sale under consideration, such as when the goods are sold in bulk.

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21. What is a gross production?
The product market exchanges final goods and services, what is commonly specified as gross
domestic product. Gross domestic product is the total market value of all final goods and services
produced in the domestic economy over a given period.

22. What is a Monopoly Power?

All monopolies are not equally powerful. Some monopolists are able to exercise greater control on
price output than others. Monopoly power indicates the extent of the departure from the competitive
behaviour.

23. What are product groups?

There is no any industry under monopolistic competition but a group of firms producing similar
products. Each firm produces a distinct product and is itself an industry.

24. Decipiate indeterminate demand curve.

Because of interdependence of the firms in oligopoly and because of inability a particular firm to
predict the behaviour of other firms, the demand curve facing an oligopolistic firm loses its defeniteness
and determinateness.

25. Who are termed as stress takers?

Enrepreneurs are capable of working for long hours and solving different complexities at the same
time. As the captain of an industry or an enterprise an entrepreneur faces a number of problems and at
right moment they take right decisions, which may involve physical as well as mental stress.

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 Part B (16 MARKS)

1. Elucidate the different types of market structure May 2016 Nov 2015 Nov 2014 Nov 2013 Nov
2011 PG 120-123

2. A firm's shutdown point comes where price is less than minimum average cost _Explain

3. Demand for labour reflects marginal productivity-Examine Nov 2014 Nov 2012

4. Discuss about the factors influencing the price and market. Nov 2016 Nov 2011 PG 154-155

5. Discuss about the methods of improving the efficiency of competitive market. Nov 2011 PG 122-
124

6. Explain the characteristics of perfect and imperfect market & differentiate. Nov 2012 PG 121-
122

7. Enumerate the producer for determination of pricing factors. What is the interaction of
product and market factor? Nov 2013 PG 143-144

8. Explain the methods of maintaining the market and firm's equilibrium. PG 123-124

9. How the market and product factor is synchronized to maintain the economic efficiency? PG 143-144

10. How is price determined under perfect competition? Describe PG 123

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 UNIT-IV
Part A (2 MARKS)

1. What is Gross National Income?

Gross national income (GNI) is defined as the sum of value added by all producers who are residents
in a nation, plus any product taxes (minus subsidies) not included in output, plus income received
from abroad such as employee compensation and property income.

2. What do you mean by circular flow of income?

The circular flow of income or circular flow is a model of the economy in which the major exchanges
are represented asflows of money, goods and services, etc. between economic agents.

3. Differentiate between GNP and GDP.

GNP and GDP both reflect the national output and income of an economy. The main difference is
that GNP (Gross National Product) takes into account net income receipts from abroad.

4. What is GDP ? Nov 2015 May 2016

GDP is a measure of the level of prices of all new, domestically produced, final goods and services in
an economy. GDP stands for gross domestic product, the total value of all final goods and services
produced within that economy during a specified period.

5. What is fiscal policy? Nov 2015 May 2016 Nov 2011 Nov 2013
Fiscal policy is the means by which a government adjusts its spending levels and tax rates to
monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a
central bank influences a nation's money supply.

6. Define Multiplier'. Nov 2014

The multiplier is the ratio of the change in total output to the change in investment.

7. What do you mean by accelerator?

Accelerator theory suggests that when demand levels result in an excess in demand, firms have two
choices of how to meet demand.

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 8. What are the various components of Aggregate Demand?
The equation for aggregate demand proposed by the Mundell-Fleming model of a large open
economy is Y = C(Y - T) + I(r) + G + NX(e). Y represents income or output. C(Y - T) represents
consumption as a function of disposable income, defined as income less taxes.

9. Define Net National Product.

The total value of goods produced and services provided in a country during one year, after
depreciation of capital goods has been allowed for.

10. What is Net domestic product?

The net domestic product (NDP) equals the gross domestic product(GDP) minus depreciation on a
country's capital goods. Net domestic product accounts for capital that has been consumed over the
year in the form of housing, vehicle, or machinery deterioration.

11. Define national income? Nov 2011 Nov 2014

The total amount of money earned within a country.

12. What is disposable income?

Disposable income is calculated by deducting the personal taxes like income tax, personal
property tax from the personal income (PI).
Disposable Income = Personal Income Personal Taxes = Consumption + Saving

13. What does Fiscal policy effectiveness measured?

Fiscal policy effectiveness can be measured by public expenditure method in which two modes can
be formulated one is pump priming and the other one is compensatory spending.

14. State the various objectives of Fiscal policy.

Policy for full employment, for economic stabilization, for economic growth, fiscal policy and social
justice.

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15. What is meant by multiplier effect? Nov 2012
The multiplier effect refers to the increase in final income arising from any new injection of spending.
The size of the multiplier depends upon household's marginal decisions to spend, called the marginal
propensity to consume (mpc), or to save, called the marginal propensity to save (mps).

16. What is aggregate demand? Nov 2012

Total spending on goods and services made in an economy.
AD = C + I + G + X-M

17. What is aggregate supply? Nov 2013

Aggregate supply (AS) or domestic final supply (DFS) is the total supply of goods and services that
firms in a national economy plan on selling during a specific time period. It is the total amount of goods
and services that firms are willing and able to sell at a given price level in an economy.

18. What is equilibrium in macroeconomics?

Macroeconomic equilibrium is an economic state in an economy where the quantity of aggregate
demand equals the quantity of aggregate supply. Significant changes in either aggregate demand or
aggregate supply will have important effects on price, unemployment, and inflation.

19. What are the various approaches to National Income?

The national income of a country can be measured by three alternative methods: (i) Product Method
(ii) Income Method, and (iii) Expenditure Method.

20. Point out the various difficulties in computing National Income.

Some of the difficulties in measuring national income are owner occupied houses, self employed
persons,illegal activities, Capital gains, depreciation, government services, public expenditure etc.

21. What are leakages from Multipliers?

Leakages are the potential diversions from the income stream which tend to weaken the multiplier
effect of new investment.

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 22. What is an effective demand?
Effective demand represents that aggregate demand or total spending which matches with aggregate
supply .
Effective demand = National Income (Y) = National Output (O)

23. Fiscal policy induces Resource Mobilization?

Fiscal policy has helped to mobilize resources through taxes, savings, public debt, etc., for
economic development of the country.

24. What are the two types of circular flow of economy?

The two types of circular flow of economy are Product flow and Income flow.

25. What is per capita income?

The average income of the people of a country in a particular year is called per capita income.

Part B (16 MARKS)

1. What is national income? How is national income measured by income method? Discuss about
its methods & factors influencing it. Nov 2014 Nov 2013 PG 171-176

2. How are aggregate price and output determined by the interaction of aggregate supply and

demand? Explain with suitable illustration PG 182-184

3. Decline in aggregate demand leads to an economic downturn? Explain May 2016 PG 181 -
182

4. (i)Explain the process of determination of National Income Nov 2011 PG 176-178

(ii)Explain the methods, scope and limitations of computing national income. PG 178-180

5. Explain the theories of Fiscal Policy May 2016 Nov 2011 PG 199-200

6. How do different forces interact to determine over all macroeconomics activity? Illustrate. Nov
2012 PG 165

7. Give an account of Fiscal Policy. Examine its impact on business Nov 2012 PG 201-202

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 8. What are the components of national income? Explain any two components in brief. Nov 2013
PG 172-174

9. Critically examine macro-economic aggregate and the performance of economy. Nov 2013 PG
163-165

10. What is expenditure multiplier? What is the role of budget in National Income? PG 187-193

UNIT-V
Part A (2 MARKS)

1. What is Inflation? Nov 2015

Inflation means persistent and appreciable increase in general level of prices over a period of time.

2. What is unemployment?
The number of people who are actively looking for work but are currently without job.

3. What does Okuns law state? Nov 2012

Okuns law states that for every2% decrease in GDP, Unemployment increases by 1%.

4. Bring out the meaning of inflation rate. Nov 2014

The rate at which the general level of prices for goods and services is rising, and, subsequently,
purchasing power is falling. Central banks attempt to stop severe inflation, along with severe
deflation, in an attempt to keep the excessive growth of prices to a minimum.

5. What does Phillips curve state?

The Phillips Curve shows the relationship between the inflation rate and the unemployment rate.

6. Differentiate inflation and deflation. Nov 2011

Inflation is a common phenomenon in modern times and is seen in nearly all economies. It is a
situation where prices of commodities increase with a simultaneous decrease in the value of the
currency. Deflation is characterized by a contraction or shrinking purchasing power. It is a
condition where prices are falling but there is a corresponding decrease in employment, total output,
and thus income.

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 7. What is demand pull inflation?
Demand-pull inflation is the result of excessive aggregate demand and can be associated
with higher levels of real as well as nominal GDP

8. What is Philip's curve? May 2016 Nov 2013

Phillips curve is a historical inverse relationship between rates of unemployment and corresponding
rates of inflation that result in an economy. Stated simply, decreased unemployment, (i.e., increased
levels of employment) in an economy will correlate with higher rates of inflation.

9. What is cost push inflation?

Cost-push inflation is caused by increased costs which push aggregate supply up; it is
therefore associated with lower levels of real GDP, so nominal GDP can be higher or lower.

10. What are the causes for inflation?

This is a reflection of classic Demand and Supply Analysis where an increase in demand results in
an increase in price. Hence demand-pullinflation: a rise in general prices caused by increasing
aggregate demand for goods and services. Cost-Push Inflation - There are also supply-side factors
that may trigger inflation.

11. What are the measures for reducing inflation?

A higher interest rate should also lead to higher exchange rate, which helps to reduce inflationary
pressure by making imports cheaper, Reducing demand for exports and Increasing incentive for
exporters to cut costs.

12. What is money market? Nov 2011

The trade in short-term loans between banks and other financial institutions.

13. What do you mean by market policy?

Monetary policy consists of tools used by the Central Bank to control the quantity of money
in the economy.

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 14. Define the meaning of money market equilibrium. Nov 2013
The interest rate at which the quantity of money demanded is equal to the quantity of money
supplied.

15. What does monetary policy deal? Nov 2015 Nov 2012
Monetary policy is maintained through actions such as increasing the interest rate, or changing the
amount of money banks need to keep in the vault

16. Define market research?

Market research is any organized effort to gather information about target markets or customers. It is
a very important component of business strategy.

17. What is deflation?

In economics, deflation is a decrease in the general price level of goods and services.Deflation occurs
when the inflation rate falls below 0% (a negative inflation rate). This should not be confused with
disinflation, a slow-down in the inflation rate (i.e., when inflation declines to lower levels).

18. What do you mean by demand for money?

The demand for money is the desired holding of financial assets in the form of money: that is, cash or
bank deposits. It can refer to thedemand for money narrowly defined as M1 (non-interest-bearing
holdings), or for money in the broader sense of M2 or M3.

19. What is money supply?

Money supply or money stock, is the total amount of monetary assets available in an economy at a
specific time.

20. What is frictional unemployment?

Frictional unemployment is the time period between jobs when a worker is searching for, or
transitioning from one job to another. It is sometimes called search engine and can be voluntary based
on the circumstances of the unemployed individual.

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21. What are the different types of unemployment?
There are various types of unemployment, they are frictional unemployment, structural
unemployment, real wage or classical unemployment, cyclical unemployment and seasonal
unemployment.

22. What are the measures to reduce unemployment?

There are some measures that can be incorporated to reduce unemployment, they are Population
control, reform in the education system, self employment, policy towards seasonal unemployment,
rapid industrialisation, government policies.

23. According to Keynesian view, what is mark up inflation?

This is closely related to the price push problem. Modern labour organizations posess substantial
monopoly power. They therefore set prices and wages on the basis of mark up over costs and relative
incomes.

24. Who are the players of money market?

The players of money market are Government, Central bank, Commercial Banks, Financial
institutions, Corporate bodies.

25. What do you mean by BoP?

The term BOP literally mean or can be abbreviated as Balance of Payments.

Part B (16 MARKS)

1. Long run and Short run Supply Curve . Nov 2015 PG 217-219

2. Enumerate and explain the impact of monetary policy on business. PG 243-244

3. Discuss in detail the various determinants of money supply? PG 229-231

4. What is Okuns Law and Phillips Curve? Sketch it in detail PG 208-209

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 5. What is Inflation? List the reasons and impacts of inflation Nov 2014 Nov 2011 PG 211-212

6. Discuss about money market Nov 2011 PG 220-222

7. Write about the roles of monetary policies Nov 2014 Nov 2013 Nov 2011 PG 237

8. Enunciate the factors involved in determining the demand and supply money Nov 2012 PG
226-229

9. Identify the causes of inflation and discuss its effects on multi-dimensional policy. May 2016
Nov 2012 PG 211-212

10. Discuss about unemployment and its impact in the national economy. Nov 2014 Nov 2013 Nov
2011 PG 205-206

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