Answer any two questions from this section in about 500 words each.

1. Distinguish between a local public good and a national public good. In this context also discuss the advantages and disadvantages of decentralisation.

2. "Social welfare function is an attempt to aggregate individual's welfare in an economy into social welfare." Discuss. Also explain Samuelson-Bergson's social welfare function.

3. Illustrate the international policy linkages and prospects of their coordination with the help of a simple two country Mundell-Fleming model.

4. State Ramsey Rule for optimal commodity taxation. Why may this rule be called inegalitarian How can this problem be mitigated in the presence of leisure?

SECTION B

Attempt any five questions from this section in about 300 words each.

5. Discuss the micro-level and macro-level impacts of public debt in an economy.

6. Discuss in brief the different methods of repayment of public debt.

7. What are the different types of grants and what purpose do they serve How can transfer of grants correct vertical imbalance in a federal country

8. How is the optimal size of local jurisdiction determined? What are its limitations?

9. What do you mean by average cost pricing? Also explain why the monopoly equilibrium for a public utility is unstable.

10. What is ordinalistic approach? How do the New Welfare Economists seek to overcome the limitations of this approach?

11. In context of Allingham-Sandmo model, suggest policy measures for reducing tax evasion In India.

12. Write short notes on any two of the following:

Inflation-Linked Bonds

Role of Government in a Mixed Economy

Fiscal Imbalances in India