M.A. (Semester IV) (CBCS) Examination Oct/Nov-2017
Economics
MONETARY ECONOMICS
Day Date: Friday, 17-11-2017 Max. Marks: 70
Time: 02:30 PM to 05.00 PM
Instructions: All questions are compulsory.
Calculator is permitted.
Q.1 Select the correct answer. 14
The money perform the function.
Store of value Medium of exchange
Unit of value All the above
is/are the plastic money.
Cheque Bond
ATM Card Cash Income
is known as fiat money.
ATM Card Debit Card
Currency Notes and Coins All the above
M3 is
M1 time deposit M2 time deposit
M4 time deposit None of all above
According to Fisher when other things are remain constant quantity of money
and price level has relation.
Negative Positive
Constant None of the above
According to Keynes precautionary demand for money is the function of

Level of income Interest rate
Investment Consumption
equation of demand for money is given by the Marshall.
M=kPY M=sPY
M=tPY M=zPY
LM denotes the equilibrium between
Demand and supply of money Demand and supply of capital
Demand and supply of goods Demand and supply of saving
The combined effect of Multiplier and Accelerator is known as
Acceleration effect Leverage effect
Super Multiplier GDP
10) The ratio between Change in income and change in consumption is known
as
Average propensity consume Marginal Propensity Consume
Consumption Expenditure Total Consumption Expenditure
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SLR-HE-29
11) are the quantitative measure of monetary policy.
Bank rate Open market operation
CLR and SLR All the above
12) Continuous increase in price is known as
Inflation Deflation
Recovery None of the above
13) According to business cycle is purely monetary phenomenon.
JM Keynes Haw trey
Schumpeter Adam Smith
14) According Hayek the equality between demand and supply of loan able fund
means
Natural rate of interest Market rate of interest
Determination of rate of interest Determination of investment
Q.2 Write short Notes. (Any Four) 12
Liquidity Trap
Accelerator
Aggregate Demand
Supply Price of Capital
Inflation
Q.3 Write short Notes. (Any Four) 16
What is super multiplier?
What is minimum reserve system?
What is psychological law of consumption?
What is the average propensity to consume?
What is Business Cycle?
Q.4 Attempt any Two questions: 14
Explain the Concepts of L1, L2, and L3.
Explain the Friedman's Restatement of Quantity Theory of Money.
Explain the Hayek's Business Cycle Theory.
Q.5 If the MPC is 0.5 percent and investment is 3000cr then computes the
multiplier effect.
14
OR
Compute the APC, MPC, APS and MPS and draw the income-consumption
line.
14
Income

Consumption

APC MPC APS MPS
Rs. 500 Rs. 1800
Rs. 2000 Rs. 2000
Rs. 3000 Rs. 2200
Rs. 4000 Rs. 2400
Rs. 5000 Rs. 2600
Rs. 6000 Rs. 2800