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 1.The slope of the production possibility curve is the A. Marginal rate of exchange B.Margial rate of substitution C. Average rate of transformation D. Marginal rate of transformation ✓ Ans: D  2.   Solution : 5Q2+20Q+20 MC= ∆C/∆Q 5×2Q+20 MC=10Q+20......(1) P=100-3Q.....(2) TR=PQ TR=(100-3Q)Q  {P=100-3Q} TR= 100Q-3Q×Q MR= 100-6Q ....(3) MC=MR 10Q+20100-6Q 10Q+6Q=100-20 16Q=80 Q=80/16 Q=5 From (2). P=100-3Q P=100-3(5) P=100-15 P=85 Derivation of Keynes Multiplier MPC= Marginal propensity to consume MPS= Marginal propensity to save I= investment ∆I= Changed Investment S= Saving ∆S=Changed Saving K= Keynes Multiplier C= Consumption Y=Income MPC+MPS=1 MPS=1-MPC---(1) K= 1/1-MPC or K= 1/MPS----- ( From-- 1) ∆Y= K.∆I ( K = Keynes Multiplier) K∆I= ∆Y K= ∆Y/∆I S=Y-C Saving = Income - Consumption ∆S=∆Y - ∆C ---(2) ∆S=∆I---- (3) K= ∆Y/∆I K= ∆Y/∆S ----(from 3) K=∆Y/(∆Y - ∆C) -----( from  2) Dividing on Numerator a...

 Which of the following pairs is not correctly matched? Author.                                          Book          A. Simon Kuznets.              Asian Drama✓ B. J. Robinson.    Essays in the Theory of Economic Growth C. Karl Marx Das Kapital D. A.w. Lewis Theory of Economic Growth  Ans: A Explanation:  Simon Kuznets:-    Simon Kuznets was born on 30 April 1901 in  Pink,  Belarus and he was died on 8 July 1985 in Cambridge.He received Nobel prize in 1971 for his empirically founded interpretation.  1.Books he wrote National income and capital formation  2, Economic Growth and income inequality. J. Robinson:  J. Robinson was born on 31 October 31, 1903 in Camberley Surrey I'm England and died August 5, 1983 in Cambridge. Book's: 1.Essays...

 List-I.                                                                     List-II A) Offer Curve.                                             1. Public Revenue B) Laffer Curve.                                           2. Sticky Price C) Lorenz Curve.                                         3. Reciprocal Demand D) Kinked Demand Curve.                        4.Inequalitie Codes:  (a).          ...

 In the following diagram,when the income increase from 120 crores to 180 crores in an economy then what is the value of f MPC? A. 0.81 B. O.82 C .0.83✓ D. 0.84 Ans:- MPC= ∆C/∆I ∆C= 170-120=50 ∆I=180-120=60 50/60=0.83 Ans:C 2. C= 20+3/4Y and Y=80, What is the value of APC? A. 3 B 0.75 C. 0.1 D.1✓ Solution: C= 20+3/4Y                        20+(3/4)80                        20+3×20                        20+60                      =    80 APC= C/Y         =80/80         =1 Ans:D 2. Let the two regression lines be given as  3x= 10+5y and 4y=5+15x. Then the correlation between x and y is.... A.-0.40 B. 0.40✓ C. 0.89 D. 1.50 Solution: Equation y on x              ...

 Inflation Rate Definition:  According to Prof. Rowan, inflation is the process of increasing prices continuously. Rowan formula for calculating percentage rate of  inflation= P(t)= {∆pP(t)/P(t-1)}×100 Where, ∆P(t)=P(t)-p(t-1) P= Price Level (t), (t-1)= Time periods  WPI( Holesale price Index).    Aplication of the formula: Ex:- Year.                    WPI.                                               {∆pP(t)/P(t-1)}×100           Inflation Rate 2002-03.             174.                                                               -----        ...

Macro Economics  

Expectations and Interest Rate  Introduction: If someone buys a long-term bond, they must expect some changes in future interest rates. They speculate as a matter of course. Although other considerations may influence their decisions, those who are converting their cash into bonds tend to think that the interest rate will fall and the bond price will rise. Those who monetize their bonds have conflicting expectations. If the current interest rate is low, they expect the current bond price to be high. To be clear, those who believe that the current interest rate is neither high nor low, they use the normal interest rate to compare the current interest rate. This normal rate also always changes. This rate changes due to inflation. Inflation and other factors cause wealthy people to adjust their perceptions of the normal interest rate, but they may decide that the current interest rate at a time is neither higher or lower than the normal rate can decide. The amount of illusory money ba...

P= MV/T  Where: P= Price level  M=Money in Circulation  V= Velocity of Money  T= Transactions 

i Know   Budget Decision – Welfare Planning Allocation of taxes should be done one in such a way as to produce more welfare with less sacrifice. According to 'Edgeworth' and 'Piego' the principle of distribution is better in all sacrificial formulas. According to them, the theory of utility will do more good. The taxation system is essential to cover the cost of government services and the revenue generated by taxation should be distributed in an equitable manner. With this revenue, the tax distribution department distributes the income according to the desires of private individuals to the detriment of the welfare of each individual and distributes the income to the public welfare. According to Edward, the government should follow the principle of taxation with minimum sacrifice from the people. According to 'Pigu', government actions should be for public welfare. But according to 'Peegu' and 'Edworth' the principle of equality may lead to serio...

Find the square root of √625 Now we can solve :

Introduction The theories of demand for money can be mainly divided into four parts. They are: 1. Monetary demand theory 2. Keynesian monetary demand theory 3 Keynesian and post-Keynesian monetary demand theories; 4. Friedman's theory of modern monetary demand. It can be said that Irving Fisher was the first to formulate the theory of traditional monetary demand. Later, this theory, with some modifications, was developed by Cambridge economists such as Alfred Marshall, A. C. Pigou, D. H. Robertson, etc. in the form of the Cambridge equation. Later, Keynes' Mahasaya was a critical critic of the traditional monetary demand theory and introduced an alternative monetary demand theory. This theory of Keynes can be found in Keynes' book "General Theory" published in 1936. .  Importance of monetary dem and To know the equilibrium level of the money market in an economy, it is essential to study money demand. Equilibrium between money demand and supply is called money ma...

 MCQS ON ECONOMICS Chater-1  A. Micro Economics 1. Principle of maximum social advantage is concerned with: a. Public expenditure b. Taxation only c. Public debt  d. Above a & b ✓ Ans: d 2. If marginal propensity to import is 0.1 and Marginal propensity to consume is 0.7, the value of income multiplier will be... a.<1 b. >1✓ c.=0 d=1 Ans: 1/{=1-(MPI+MPC)} From above question MPI=0.1, and MPC=0.7 1/{1-(0.1+0.7)} 1/1-0.8.                        1/0.2 10/2 5        Ans: b.  3. A toll tax is a tax based on which of the folowing: a. Horizontal equality  . The benifit principle✓ c. Vertical Equality d. Tax progressively  Ans: b  4.which of the following factors is Not the cause for Market Failure a. Public goods  b. Externality  c. Lack of  Demand ✓ d. Symmetric information  Ans: c  5. Liquidity approach is also known by the name:- a. Gurle...

  Deficit Financing Introduction: Local currency is an integral part of domestic monetary policy. When this seed is defined in the budget language of the Reserve Bank we are one stage (How Treasury Bills), the funds that fill the gap that is higher than the total expenditure of the government, the total revenue (including all types of income) is known as the deficit. Traditional economists and monetarists who advocate a balanced budget, while other modern economists and politicians condemn deficit financing. They associate deficit monetary policy with inflation, generally, deficit financing, as new currency is printed to the extent that the money supply increases. It is argued that blindly believing or misapplying the Quantity Theory of Money leads to deficit financing and inflationary pressures, so this basis is inappropriate for development seed collection. Logically, theoretically, and even upon proper historical data analysis, this argument is weak. Because an increase in money...

Effect of latent money on the economic and social system. Introduction: emergence of crypto-currency and its growth over time in circulation has adverse effects on the Indian economy in many ways.  So it is essential to analyse its effect. Effects of Latent Money   1. The direct impact of cryptocurrency is on the government exchequer.  Growth of black money tax evasion reduces government tax revenue.  The government has to levy more taxes to cover this.  Many people believe that this is the reason why the Regressive tax structure has developed in India.  Both black money and tax evasion are intertwined.  Both these together burden the righteous tax payer.  It leads to inequality of income and assets.  Black money helps tax evaders to increase luxury consumption.  D.K.  According to D.K. Rangnekar, while the incomes of taxpayers are falling, the incomes of tax evaders are increasing and luxury consumption is increasing, leading ...

Economic World : Problems faced by backward countries in implementa... :  Problems faced by backward countries in implementation of globalization policies  Many economists consider it unclear how far international...

  Development Indicator: Only GDP is not a Parameter India is currently the fifth largest economy in the world in terms of Gross Domestic Product (GDP). The International Monetary Fund (IMF) has confirmed that India has overtaken Britain and taken that status. Analysis has recently come to light that Germany, which is one step above India, will surpass Japan this year. India will become the third largest economy by the year 2030 after both Germany and Japan, S&P Global Market Intelligence's latest estimate says. There are rumors that India, which is a three and a half trillion dollar economy, will expand to 7.3 trillion dollars in the next seven years. By then, only America and China were ahead of India. This is a gratifying development, but on deeper analysis - different angles are revealed. On the basis of GDP growth rate, India seems to be creeping up the ladder. India is a lower middle income country in terms of GDP per capita. It is a stark truth that India, with a populat...

  My Bharat' to keep up with the changing times. Introduction : India is moving fast in the digital world.  The Center is launching a digital platform 'My Bharat' to keep up with the changing times.  The center hopes that this will stimulate and utilize the intellectual power and energy of the youth for the progress of the country.  It is believed to become a tool of coordinated action.  Governments should take all precautions to ensure that educated Indian youth plays a vital role in the international economic system.  Constructive measures should be taken under vision 2007 to bring the youth of villages, cities and small towns on a single platform.  In this process, the Center hopes that the My Bharat platform will help empower the youth to realize their dreams, share innovative ideas with each other and become drivers of development.  Apart from indigenous youth in the age group of 15-29 years who are classified as youth under the National Educ...

Price determination in perfectly Competitive Markets A perfectly competitive market is rare in the modern world. It can be said that this is not the case in the industrial sector. Similarly, a monopolistic market is rare in the private sector. Markets between these two are widely prevalent. Monogamous power exists in all these in varying degrees. It results in misuse of resources. Marginal cost pricing method is followed in public sector organisations to prevent such misuse of resources. Only short- run marginal cost considerations come into play. The net social benefit is maximised. Because many industries have credit exposures, marginal costs of exposure are subsumed under social marginal costs. If that happens, over production will be reduced and social benefit will be achieved. In industries that follow the marginal cost pricing system, long- run costs are declining and they incur losses. Burying them is difficult. Marginal cost measurement is complicated. Full cost pricing approac...

  Average marginal cost theory Ex' A farmer who produces 1000 quintals of excess grain in a year is spending 100000 rupees more. In such a case, how much should the farmer sell quintals of grain? Ans: AIC= dTC/dQ               = dTC= 1000000               = dQ. = 1000 Q= Quantity  TC= Total Cost 100000/1000 100 Cost of 1 quintal grain= Rs.1000        

 Problems faced by backward countries in implementation of globalization policies  Many economists consider it unclear how far international competition and globalization can go in a highly diverse world with differences in basic facilities, non-equal availability of information, differences in the stages of development of different countries, and limitations in terms of labor and investment.  Because of these differences among the countries of the world, the integration of the global economy brings benefits in some respects and challenges in others.  These countries have already spent a lot of time preparing their markets to compete globally.  Factors such as high world prices, continued official depreciation of their currencies and rising import volumes pose problems for their international marketing efforts.  Moreover, the protectionist policies implemented in these countries, discretionary procurement policies implemented by the governments, incorrect t...