Macro Economics for Business Decisions Question Paper 2008

I Semester M.Com. Degree Examination, February/March 2008

(2007-08 Scheme)(NS)

COMMERCE

Paper - 1.4: Macro Economics for Business Decisions

Time: 3 Hours                                                                                          Max. Marks: 80

Section - A

1. Answer any ten of the following in about 3-4 lines each. Each sub-question carries 2 marks. (2X10=20)

a) State the objectives of Macro-Economics.
b) Distinguish between monetary policy and fiscal policy.
c) What is Read GDP?
d) What is marginal propensity to consume?
e) What is investment demand curve?
f) Define multiplier. Give an example.
g) Distinguish between nominal rate of interest and real rate of interest.
h) What is financial intermediation?
i) What are financial assets? Give two examples.
j) Define economic growth.
k) State the drivers of economic growth.
l) What is Production Possibility Frontier(PPF)?

Section - B

Answer any three questions in about a page each.  Each question carries 5 marks. (3X5=15)

2. Explain the linkage between Macro Economic and business planning and decision making.
3. Describe the components of an economic system.
4. Outline the linkages among savings, consumption and investment.
5. What is Fiscal Policy? What are the objectives of fiscal policy in a developing country?
6. Describe the factors determining the economic growth.

Section - C

Answer any three questions. (3x15=45)

7. Critically examine the different approaches advocated for measuring the national income.
8. Explain the major features of consumption and savings functions.
9. Critically examine the process of commercial banks in creation of credit and their limitations.
10. What is structure of interest rates? Explain its utility to business managers.
11. What is a trade cycle? What are its phases? Explain the mechanism to overcome the trade cycles.