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Post-Graduate Course

Term End Examination 2006 Part-I

M. Com.

Macro-economics and International Economic Problems

Paper - III

Time : Two Hours Full Marks : 50

(Weightage of Marks : 80%)

Special credit will be given for accuracy and relevance in

the answer. Marks will be deducted for incorrect spelling,

untidy work and illegible handwriting. The weightage for

each question has been indicated in the margin.

Module I

Marks 25

Group A

Answer any one question.

1. Explain the Says Law of Markets. State its role in the

formulation of the classical macro-economic model. Does

it differentiate the classical model from the Keynesian

macro-economic model ? 4+7+4=15

2. Explain critically the Loanable Fund Theory of interest ratedetermination. 10+5=15

Group B

Answer any one question.

3. Explain the different phases of a business cycle. Define

the concepts of multiplier and accelerator with a reference

to their roles in business cycle formulation. 3+3+4=10

4. (a) Define and explain IS and LM curves.

(b) Suppose C = 100 + (1 20)y ; I = 800 40i ;G

O= 600 ; M

O /P = 500 ; L = 025y 325i. Derive the

IS and LM equations and determine equilibrium income

and interest rate. 2+2+3+3=10

5. Explain the natural rate of unemployment. Analyse the

trade-off between unemployment and inflation. 3+7=10

Module II

Marks 25

Group A

Answer anyone question.

6. Define GDP, GNP and NNP in an open economy. Show

that the following two equations give us the same

information regarding National Income Accounting.

Y = C + I + G + (Exp Imp) .................(1)

(I S) + (G T) = (Imp Exp) .............(2)

where Y = income, C = consumption, t = taxation,

S = saving and S = Yd C or Y T C. 6+9=15

7. What are the arguments in favour of trade liberalisation ?

In this context describe the main principles of the WTO.

7+8=15

Group B

Answer anyone question.

8. Define the BOP of a country. Explain the balances of the

Current Account, the Capital Account, Autonomous and

Accommodating transactions in a BOP accounting.

What is the equilibrium condition in the case of a BOP of

a country ? 2+4+4=10

(2)

P.T.O.

PG Com. - III PG Com. - III

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