Where will sale of machinery to abroad be recorded in the Balance of Payments Accounts? Give reasons.
Explain the 'bank of issue' function of the central bank.
Or
Explain 'Government's Bank' function of central bank.
Government of India has recently launched 'Jan-Dhan Yojna' aimed at every household in the country to have at least one bank account. Explain how deposits made under the plan are going to affect national income of the country.
With the Jan Dhan Yojna a greater number of individuals are brought under the ambit of banking system. Those individuals who earlier did not have savings account now have access to banking facilities and have opened savings account with the commercial banks.
In this way, the commercial banks are able to tap greater savings which in turn can be used to lend loans for investment purposes. Thus, the yojna indirectly helps in increasing the investment and production in the economy which in turn would help in improving the national income.
An economy is in equilibrium. Calculate national income from the following:
Autonomous consumption (C) = 100
Marginal propensity to save (S) = 0.2
Investment expenditure (I) = 200
A consumer consumes only two goods X and Y both priced at Rs. 3 per unit. If the consumer chooses a combination of these two goods with Marginal Rate of Substitution equal to 3, is the consumer in equilibrium? Give reasons. What will a rational consumer do in this situation? Explain.
Or
A consumer consumes only two goods X and Y whose prices are Rs. 4 and Rs. 5 per unit respectively. If the consumer chooses a combination of the two goods with marginal utility of X equal to 5 and that of Y equal to 4, is the consumer in equilibrium? Give reason. What will a rational consumer do in this situation? Use utility analysis.
Giving reason, explain how the following should be treated in estimation of national income:
(i) Expenditure by a firm on payment of fees to a chartered accountant
(ii) Payment of corporate tax by a firm
(iii) Purchase of refrigerator by a firm for own use
Explain the concept of Inflationary Gap. Explain the role of Repo Rate in reducing this gap.
OR
Explain the concept of Deflationary Gap and the role of 'Open Market Operations' in reducing this gap.
Explain the role the government can play through the budget in influencing allocation of resources.
Calculate National Income and Personal Disposable Income:
(Rs.crores) | ||
(i) | Personal tax | 80 |
(ii) | Private final consumption expenditure | 600 |
(iii) | Undistributed profits | 30 |
(iv) | Private income | 650 |
(v) | Government final consumption expenditure | 100 |
(vi) | Corporate tax | 50 |
(vii) | Net domestic fixed capital formation | 70 |
(viii) | Net indirect tax | 60 |
(ix) | Depreciation | 14 |
(x) | Change in stocks | (-) 10 |
(xi) | Net imports | 20 |
(xii) | Net factor income to abroad | 10 |