ASSIGNMENT

MACROECONOMICS

Instructions:

The assignment submission deadline is February 25, 2024.

Attempt a total of 10 questions from the provided set.

Each question should be clearly mentioned followed by your answer.

Use A4 size sheets for your submission.

Include your name, roll number, and the submission date on the first page of your submission.

Ensure your handwriting is legible and the content is organized neatly.

Submit the assignment in person or as instructed by the instructor.

Note: Failure to adhere to the submission guidelines may result in a deduction of marks or other
penalties.

1) Distinguish between National income at constant prices and national income at current prices
2) How do commercial banks create credit in multiple banking system? what are the limitations of
credit creation?
3) What are the main objectives of monetary policy? Discuss the main tools used by the central
bank to achieve these objectives.
4) Define national income. Briefly explain the various methods of estimating national income.
5) Explain the impact on interest rate
a) first part change in the price levels
b) change in the level of national income.
6) What are the uses of private saving?
7) Use the following data to calculate private savings and government savings
a) GDP 8000
b) net factor payments from abroad-100
c) consumption 2500
d) government purchases 1500
e) interest payments on government debt 250
f) taxes 2800
g) transfer 1200
8) The following Data is given for two years output and prices for an economy 2011 2012

2011 2011 2012 2012

commodities prices output prices output
A 10 60 16 100
B 6 80 12 140
the nominal GDP, real GDP and GDP deflator taking 2011 as base year.

9)2. Calculate National Income

Items (₹ in crore)
 i) Compensation of employees 2,000

ii) Profit 800

iii) Rent 300

iv) Interest 250

v) Mixed income of self employed 7000

vi) Net current transfers to abroad 200

vii) Net Exports – 100

viii) Net indirect taxes 1,500

ix) Net Factor income to abroad 60

x) Consumption of fixed capital 120

10) Find GDP at Market Price.

Items In Rupees

Value of output of a primary sector 2000

Intermediate consumption of the secondary sector 800

Intermediate consumption of the primary sector 1000

Net factor income from abroad -30

Net indirect tax 300

Value of output of the tertiary sector 1400

Value of output of a secondary sector 1800

Intermediate consumption of the tertiary sector 600

11) What are the main causes of inflation, and how does it affect the overall economy?

12) How does unemployment impact consumer spending and economic growth?
13) What are the key indicators used to measure economic growth, and how are they calculated?

14) How do changes in fiscal policy, such as tax cuts or increases in government spending, impact
aggregate demand and economic output?

15) What is an autonomous variable? What components of aggregate demand have we specified in
the sallybus , as being autonomous?

16) What is the role of the central bank in managing monetary policy, and how does it affect interest
rates and inflation?

17) C=200+0.5YD

YD= Y-TAX

T=0.2Y

I=100

G=200

TR=100

a) Calculate the equilibrium level of income and the multiplier in this model.
b) Calculate the budget surplus(BS)

16) Compare and

contrast the classical
and Keynesian schools
of thought for the
following
economic issues.
(a) The flexibility of
wages and prices.
(b) The importance of
macroeconomic policies
16) Compare and
contrast the classical
and Keynesian schools
of thought for the
following
economic issues.
(a) The flexibility of
wages and prices.
(b) The importance of
macroeconomic policies
17) Compare and contrast the classical and Keynesian schools of thought for the following economic
issues.

(a) The flexibility of wages and prices.

(b) The importance of macroeconomic policies

18) let the consumption function be given by C = 1000 + 0.6 Yd, T =400, I = 500, G = 300 where I is
investment, G is government expenditure, T is taxes and Yd is disposable income in rupees crore.
show the equality of leakages and injections buy calculating the value of leakages and injections.

19) Derive the expression of balanced budget multiplier with lum-sum tax function.

20) discuss the saving investment approach to determine the equilibrium level of income.