1. Briefly explain the process of National income calculation up to Personal consumption expenditure using expenditure method. What are the important exclusion rules in national income calculation.
2. Explain with the help of circular flow diagram how an interaction in an economy occurs. Explain the condition of equilibrium in an economy as prescribed by circular flow of income model.
3. What are the basic assumptions of classical theory of income and output? What determine the level of output and distribution of national income among factors of production according to Classical theory?
4. What are factor prices? How are factor prices determined according to Classical theory of income and output?
5. Explain and derive the properties of Cobb-Douglas production function.
6. Explain with diagrams how is equilibrium in the goods market attained according to Classical theory?
7. Explain with diagrams how is equilibrium in the loanable funds market attained according to Classical theory?
8. Explain the effects of the followings on economy according to Classical Theory of Income and Output:
a) When the government uses expansionary fiscal policies
b) Change in investment demand
9. How is money defined? How is equilibrium in money market attained according to classical theory?
10. Explain and derive Quantity Theory of Money as prescribed by Classical Theory. Explain the effects of monetary injection in an economy.
11. What is fisher Effect? Explain the statement “ There is one to one relationship between Inflation and nominal interest rate”.
12. What is inflation? What are the various costs of inflation?
13. Explain with the help of diagram, “There is a dichotomy between real and nominal variables” according to classical theory of income and output.
14. What is net export? Explain and derive the condition when...