Open Economy Macroeconomics — Economics STD 12 Humanities & Commerce — Question

The saving curve of an economy makes an intercept on negative axis at ₹ 50 crore and 20% of additional income is saved. Find out the consumption function.

Classify the into durable, non-durable, semi-durable or service.
Washing soaps.

State whether the following statements are true or false. Give reasons for your answer.

1. When Marginal Propensity to consume is greater than Marginal Propensity to Save, the value of investment multiplier will be greater than 5.
2. The value of Marginal Propensity to Save can never be negative.

Explain the basis of classifying goods into intermediate and final goods. Give suitable examples.

Explain 'mixed income of self-employed' and give an example.

Show diagrammatically the impact on equilibrium level of output of increased government spending.

Can there be a fiscal deficit in a government budget without a revenue deficit? Explain.

During a given year the nominal national income increased by percent while the real national income increased by only 6 percent. Population increased by 2 percent. What has caused the difference between nominal income and real income? What is real per capital income?

In India a majority of population is lying below poverty line due to inequality of 'Income and Wealth'. How can budget be helpful in solving this problem?

Explain briefly how changes in:

1. Government expenditure,
2. Bank rate, can be helpful in correcting excess demand in an economy.