Macroeconomics for Business

bbssecond year

This course covers macroeconomic concepts, national income accounting, employment theories, Keynesian economics, IS-LM model, inflation, business cycles, monetary and fiscal policy, global economy, and current macroeconomic issues in Nepal.

semester photo

Chapter Wise Notes Question Banks Syllabus Chapter Wise Questions

Faculty of Management

2078

Bachelor of Business Studies

Macroeconomics for Business

MGT 209

Full Marks: 100

Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.

"Section A"

Brief Answer Questions Attempt All questions .

[10*2=20 ]

State the features of macroeconomics.

What are the long-run determinants of investment?

What are methods of privatization?

Prepare a list of advantages of foreign employment

What are the sources of deficit financing?

Write any four assumptions of Say's Law of Market.

Differentiate money flow and real flow.

What is meant by exchange rate?

Consider the saving function. S = a + bY and interpret the components.

State the condition for labour market equilibrium according to classical economists.

"Section B"

Short Answer Questions ( Any Five )

[5*10=50 ]

(a) Derive tax multiplier.

(b) Suppose in an economy, the following data is given;

C = 200 + b(Y - T), T = 500+tYI = 100, G = 500, X = 100, M = 50+0.1YThe marginal propensity to consume (b) = 0.7 and income tax rate (t) = 0.20(i) Find the equilibrium level of income.(ii) What will be the effect on equilibrium income when government expenditure increase by Rs. 50 billion and the tax rate decreases by 5%

Explain the dynamic analysis of macroeconomics. How does it differ from macro-static analysis?

Suppose that the Nepalese economy has realized the following structural equations for the product and money markets.C = 200+0.8(Y -I), T = Rs. 40 billion, Msp = 200-3000i, Mt =0.5YI = 200-2000i, G = Rs. 100 billion, M= Rs. 400 billioni) Compute the equilibrium rate of interest and output.ii) It is realized that the Nepalese economy is trapped in economic recession. Nepal Rastra Bank has implemented a contractionary monetary policy. As a result money supply increased by Rs. 300 billion. The government of Nepal has also supported NRB and increased its planned expenditure by Rs. 200 billion. What will be the simultaneous effect on the equilibrium rate of interest and output?

Mention the features of budgetary policy of Nepal.

Describe the components of fiscal federalism.

Do you agree that globalization solves the economic problems like high unemployment, low productivity, BOP disequilibrium, etc, faced by developing countries like Nepal? Give your critical comment.

"Section C"

Analytical Answer Questions ( Any Two)

[2*15=30 ]

Consider the following figures for national income accounts:

Description	Rs. in Million
Wages and salaries	44,000
Proprietor's income	6,000
Government Consumption	6,000
Receipts from the rest of the world	800
Private consumption expenditure	52,960
Changes in inventories	-400
Subsidy	1,600
Rental income	1,800
Net interest	5,000
Dividends	3,600
Mixed -income	2,000
Social security contributed by Employer's	3,000
Corporate income	10,000
Direct taxes	1,860
Current transfers from the rest of the world	5,000
Corporate income taxes	2,400
Capital consumption allowance	3,200
Social Insurance payment	13,600
Current transfers from government	8,000
Indirect business taxes	3,600
Imports	2,600
Government Investment	3,600
Payments to the rest of the world	1,600
Net fixed capital formation	10,800
Exports	1,440
Current transfers from business firms	3,000
Interest paid by the consumer	4,000

\( a) \text{Compute } \text{NNP}_{\text{mp}} \) by both income and expenditure methods.

b) Compute personal disposable income.

c) State the significance of real GDP in economic analysis.

d) What types of conceptual difficulties are encountered in the measurement of GDP by product method?

Explain the principle of effective demand. How is it superior to the classical theory of employment?

Explain the principle of demand pull inflation. How can it be removed by monetary and fiscal polices?