Subject: Business Economics-II

Time : 3 Hours Maximum Marks :75
Note: Attempt any five questions.

Q1. Write notes on any three of the following: (3x5=15)

(a) Circular flow of income in three sector economy.

(b) Measures of money supply in India.

(c) Motives for holding money in Keynesian analysis.

(d) Primary functions of money.

(e) Relationship between multiplier and MPC.


Q2. Define macro—economics. How macro economic variables are useful in understanding the nature of an economy? What are their limitations? (15)


Q3. Discuss the various problems in the measurement of national income. What precautions should be taken in the estimation of national income? (15)




Q4. What do you mean by consumption function? What are various factors affecting it? (15)


Q5. Define and differentiate between demand-pull and cost—push inflation.  What measures can be adopted by the Central Bank for controlling the demandspull inflation. (15)


Q6. What is an IS curve. What factors determine the slope of this curve? Discuss. (15)


Q7. What is the equilibrium rate of interest? Show the impact of expansionary monetary policy on the position of LM curve and the rate of interest. (15)