ECO/III/EC/03 Student's Copy
2 0 1 8
CBCS
3rd Semester
ECONOMICS
THIRD PAPER
Macroeconomics—I
Full Marks 75
Time 3 hours
PART A—OBJECTIVE
Marks 25
The figures in the margin indicate full marks for the questions
SECTION—A
Marks 10
Tick the correct answer in the brackets provided 1×10=10
1. For the calculation of NI, we should exclude
services rendered by a mother
profit earned by government sectors
payments made to the service holder
2. GNP estimated at constant prices in a chosen or base year is called
nominal income
real income
current income
/38 1 Contd.
3. When income increases, consumption expenditure
also increases
decreases
remains as it is
4. Aggregate demand function is governed by consumption and
rate of interest
investment
money supply
5. Consumption function which is not influenced by current income is
induced consumption
autonomous consumption
Both and
6. Marginal propensity to save is denoted by
D
D
Y
C

D
D
C
Y

D
D
S
Y

7. Savings is equal to
Income Consumption
Income Consumption
Consumption Investment
8. Autonomous investment is
income inelastic
interest elastic
profit elastic
ECO/III/EC/03/38 2 Contd.
9. According to the classical economist, the rate of interest is determined by
demand for and supply of investment
demand for and supply of money
demand for and supply of capital
10. Liquidity trap occurs when
increase in money supply can't reduce rate of interest
increase in money demand can't reduce rate of interest
increase in rate of investment can't reduce rate of interest
SECTION—B
Marks 15
Write on/Answer the following 3×5=15
1. What is Green Accounting?
OR
Define GNP.
2. Difference between classical theory of employment and Keynesian
theory of employment
OR
What is aggregate supply?
3. Meaning of consumption function
OR
State three factors influencing consumption spending
4. Autonomous and induced investment
OR
Concept of present discounted value
ECO/III/EC/03/38 3 Contd.
5. Concept of Gross and Net interest
OR
Neo-classical theory of interest
PART B—DESCRIPTIVE
Marks 50
The figures in the margin indicate full marks for the questions
1. What is national income identity? Explain national income identity with
government and international trade. 3+7=10
OR
2. Explain the concept and components of national income. 10
3. Explain the Keynesian theory of employment in terms of the Principle of
Effective Demand. 10
OR
4. ''Supply creates its own demand''. Discuss the statement. 10
5. Distinguish between APC and MPC. What are the factors influencing
consumption in an economy? 4+6=10
OR
6. Explain the Keynesian theory of Absolute Income Hypothesis. 10
7. Explain the concept of investment multiplier. Briefly explain its
effectiveness in LDCs. 7+3=10
OR
8. Define Marginal Efficiency of Capital. What are the factors influencing
MEC? 3+7=10
9. Explain the classical theory of interest. 10
OR
10. Explain the loanable funds theory of Interest. 10