ECONOMIC FOUNDATIONS OF BUSINESS ENVIRONMENT

 (Books for reference M.L. Seth, Dwivedi, Sumathi & Saravanvel, and GSGupta)

INTRODUCTION

1. Importance and limitations of Macroeconomics.

2. Nature and scope of macro economics

3. Explain the macro economic policy and discuss its goals   and objectives.

4. Economic policies of government.

 (Hint: Discuss - Industrial policy, trade policy, fiscal policy and monetary policy)

INFLATION

(Refer M.L..SETH / Dwivedi / my slides)

1. What is Inflation and what are the causes of the same.  

    Causes: Demand-pull factors and cost push factors, ASF and ADF

2. What are the various anti inflationary measures adopted by the  government to combat / control inflation? Or Discuss the Anti – inflationary policy of India.

Hint: fiscal measures, Monetary measures and price and wage control measures.

3. What are the types of inflation? How do they differ from each

4. A moderate degree of inflation is the logical concomitant of efficient economic mobilization. Explain and justify.

Hint: discuss moderate inflation and the economic and social effects of inflation and conclude that these effects do not occur for moderate inflation.

5. What are Inflation, deflation, reflation and disinflation? Differentiate.

6. Discuss the inflationary trend in India. What measures were adopted by the govt to control the inflation?

7. Inflationary gap and deflationary gap. Explain Wage price spiral using demand-pull and cost-push inflation.

Hint: wage price spiral is caused by interaction between demand-pull and cost-push inflation.

8. Various types of unemployment. Differentiate each.

Relationship between unemployment rate and inflation rate. (Philip’s curve)

9. Explain the price level trend in India. What has caused an increase in price level? 

10. Inflation is unjust and deflation is inexpedient – Elucidate.

11. Using demand and supply related factors explain inflation in India.

Hint: Explain demand-pull and cost-push factors.

12. What are supply constraints? What is the impact of unemployment on the economy? What policy initiatives have to be adopted to overcome unemployment?

13.What is stagflation?

BOT AND PAYMENTS (Refer M.L.Seth/Dwivedi/ S.Sumathi)

1. Explain the structure of Balance of payments.

2. What is Disequilibrium in the BOP? What are the various types and causes of Disequilibrium? How can it be adjusted?

3. What is the role of fiscal policy and monetary policy in the BOP adjustment?

4. Discuss India’s balance of payment and external debt position.

5. Analyze the trends in balance of trade for India.

EXCHANGE RATE (Refer Dwivedi)

1. What is meant by exchange rate? What are the various theories of exchange rate?

2. Discuss the various methods of foreign payments and importance of exchange rate.

3. Differentiate “spot and forward” and “fixed Vs flexible exchange rate”.

4. How is exchange rate determined in free exchange market?

INTERNATIONAL TRADE AND INTL. POLICY (Refer S.Sumathi/ Balu)

1. Distinguish internal and international trade. Are they interdependent?

2. What are the various theories of International trade?

3. What are the various barriers to international trade?

4.  What are the various instruments of trade policy?

Hint: discuss tariffs, subsidies, import quotas and physical and administrative policies

5. Differentiate Free trade and protective trade policy. Which policy is suitable for a developing country? Give reasons.

Hint: for developing country it is always protective trade policy and explain the various arguments for protective trade policy and their advantages.

6. What are the features of latest trade policy of India? What impacts does it have on the external economy of India?

7. Analyze the latest trends in exports and imports of India in global market. What would be your suggestions for the growth of Indian exports?

8. What is trade multiplier?

9. What do you mean by exchange control? What are its objectives and what are the various methods of exchange control?

10. What are the merits and demerits of free trade policy?

11. Why are quotas considered superior than tariffs?

12. What do you mean by terms of trade and what are the different types of TOT?

13. Discuss India’s position in global trade. Hint: discuss EXIM policy of India.

14. Discuss India’s issues and concerns over world trade with WTO.

Hint: search from the www.

15. Discuss the political and economic impact of WTO on developing countries. Hint: search from www.

16. Explain the merits and demerits of Dunkel Draft. Hint: search from www.

17. What are intellectual property rights? Explain the provision of GATT 1994 on TRIPS. Hint: search from www.

18. Examine the performance of foreign trade. How do you orient trade theories into the present economy of the external sector?

19. What are the features of foreign trade policy? Discuss the new initiatives of the present trade policy?

CIRCULAR FLOW OF INCOME (Refer Dwivedi)

1. Describe an economy as circular flows of income and expenditure. What determines the magnitude of circular flows? (All sectors with diagrams)

2. What are withdrawals and injections? How do they affect the size if the circular flows of income and expenditure in and economy?

BUSINESS CYCLE

1. What are business cycles? Explain the various types of business cycles?

2. Discuss the various phases of business cycle.

3. Briefly explain the theories of business cycle.

4. Using multiplier and accelerator explain the origin of business cycle.

5. Does business cycle lead to unemployment and poverty? What are the various steps that can be taken to achieve economic stability?

Hint: yes business cycle lead to unemployment and poverty. Measures taken are monetary policy and fiscal policy. Refer S.Sumathi.

6. Explain the view that trade or business cycle is a purely a monetary

phenomenon. Hint: discuss monetary theories.

7. Is business cycle avoidable? Discuss. (Yes. Keynes theory, okuns law)

8. What do you mean by over investment? Explain how does it cause trade cycle? Hint: discuss over investment theory.

9. What is the significance of the study of business cycles from business point of view?

NATIONAL INCOME

1. Explain the concept of national income and other related concepts.

Hint: discuss GNP, GDP, PI, DPI, and NNP etc.

2. What are the uses of national income statistics? Explain in detail.

3. What are the different methods of measurement of national income? Name the sectors, which are used in estimation national income in India?

4. What are the problems and difficulties of measurement of national income?

5. What are the precautions in the estimation of national income?

6. What is meant by double counting? How does it affect the measure of GNP? What is the method used to avoid double counting?

7. Distinguish between net product and factor income methods of measuring national income. Why do the two methods yield the same measure?

8. What does GNP deflator mean? What purpose does it serve in national income analysis?

9. Using saving and investment schedules explain the determination of National income. 

(Discuss eqbm level of income in: 2 sector, 3 sector and 4 sector)

ECONOMIC PLANNING (Refer S.Sumathi)

1. What does economic planning mean? What are the general objectives of planning in India?

2. State the objectives of the 10 five year plans of India.

3. Discuss about the outlay of achievements of the five-year plans.

4. Assess the causes for the limited success or failures of five-year plans of India.

5. What do you mean by deficit financing? Offer suggestions to control deficit financing in India.

6. What are the weaknesses and limitations of five year plans in India.

CLASSICAL THEORY OF INCOME AND EMPLOYMENT

1. What is Say’s law? Explain the law in the context of a barter economy and a monetised economy.

2. Explain the concept of aggregate demand according to Keynes. (Keynes theory of income and employment)

3. Differentiate static and dynamic multipliers.

4. What are the conditions that prevent the application of the multiplier theory to the less developed countries?

5. Discuss the applicability of multiplier theory of LDC’s.

6. What are the various types of multiplier?

7. Explain – multiplier, accelerator, super multiplier and employment multiplier.

8. Explain marginal efficiency of capital according to Keynes.

9. Discuss the applicability of Keynesian theory to developing countries and state the criticisms of Keynes theory.

10. Consumption function and investment function.

ECONOMIC POLICIES – FISCAL POLICY

1. What are the objectives of fiscal policy?

2. Discuss the role of fiscal policy in developing countries.

3. Suggest an appropriate fiscal policy for underdeveloped country, developing countries and developed countries.

4. What is deficit financing? How does it lead to inflation?

5. Discuss the various fiscal policy instruments. How can they be used to achieve macroeconomic objectives?

6. Examine the role of fiscal policy in India. What are the impacts of fiscal policy on the Indian economy?

7. What are the objectives of fiscal policy? Do the objectives vary for developed and underdeveloped countries?

8. Differentiate automatic stabilization and discretionary fiscal policy.

9. Different types of fiscal policy.

10. Explain how fiscal policy can be utilized to achieve the macro economic objectives. (Discuss FP and Output, FP and Price…)

DEMAND AND SUPPLY OF MONEY

1. Discuss the Classical and Keynes approach to the demand of money.

2. Briefly discuss the various theories of money?

3. How can equilibrium be attained in money market? (IS & LM curve)

4. What are the main motives of demand and supply of money?

MONETARY POLICY

1. What are the instruments of monetary policy? Explain how monetary instruments can be used to achieve economic objectives.

2. Briefly explain the various objectives of monetary policy. What should be the objective of monetary policy for a developing country?

3. Distinguish monetary and fiscal policy.

4. Discuss the conflicting objectives of monetary policy.

5. What is the scope of monetary policy for an underdeveloped economy?

6. Distinguish between quantitative and qualitative measures of monetary control. Under what conditions are the qualitative controls preferred to quantitative controls?

7. Monetary policy in the Indian scenario.

CENTRAL BANK – FUNCTIONS AND CREDIT CREATION

1. What is credit control? What are the objectives of credit control? 2. Methods of credit control.

3. Loans create credit – explain. What measures limit the credit creation capacity of banks?

4. What are the characteristics of a good money market? Discuss the constituents or sectors of money market.

5. Explain about the structure of Indian money market.

6. What are the defects of Indian money market?

7. Explain the process of multiple credit creation.

PHYSICAL POLICY

1. Explain in detail the nature and different forms of physical policy.

2. What are the areas over which regulatory controls are imposed in India?

Hint: search from www.

INDIAN ECONOMY

1. Important characteristics of Indian economy.

2. Indian economic reforms appraisal.

3. Indian performance in the external sector.

4. India’s concern over WTO.

5.Examine the employment policy of India? Draw an employment oriented growth strategy?

6. Critically examine the economic planning of India? What are the new features of the latest economic planning?

7. Explain the trends in national income growth and structure?

8. What are the new estimates of national income?

Other concepts:

GATT, WTO, TRIPS, UNCTAD, MRTP, IMF, EXIM POLICY, DUNKEL DRAFT

TIPS FOR EXAMN:

ÿ        DO NOT LEAVE EVEN 1 QUESTION UNANSWERED.

ÿ        THE LIST GIVEN ABOVE IS NOT EXHAUSTIVE. DIFFERENT PATTERNS OF QUESTIONING ARE ALSO POSSIBLE.

ÿ        DO NOT DEVOTE MORE TIME FOR 2 MARKS.

ÿ        ANSWER ALL QUESTIONS WITHOUT MUCH SHUFFLING.

ÿ        USE PENCIL AND SKETCHES FOR BETTER PRESENTATION.

ÿ        SKETCH GRAPHS WHEREVER APPLICABLE.

ÿ        GIVE APPROPRIATE SIDE HEADINGS.

ÿ        TIME MANAGEMENT IS A MUST

ÿ        REVIEW THE PROBLEMS WORKED OUT IN THE CLASS.

ÿ        DEFINITELY COVER THE QUESTIONS GIVEN ABOVE.

ALL THE BEST

MUST STUDY QUESTIONS FOR MODEL EXAM

2 marks

1. What are the objectives of ninth and tenth five-year plan?

2. Distinguish balance of trade and balance of payment.

3.What is the relationship between MPS and income?

4. What is the pattern of Indian tax structure?

5  Define political business cycle?

6  Objectives of Indian monetary policy.

7  Money supply multiplier

8  Causes of unemployment

9  Demand pull inflation

10 Trade multiplier

11 Inflation

12 Planning

13 Business cycle

14 Define Money (Crowther’s definition)

15 What are International trade & internal trade?

16 What are the weaknesses of five year plans in India?

17 Supply & Demand

18 Macroeconomics

19 Circular flow of income

20 Economic growth

21 Significance of economic planning

22 reverse multiplier

23 role of fiscal policy

24 Liquidity preference

25 What is Money market equilibrium

26 What is gain in international trade

27 Types of multiplier

28 Elements of National Income

29 Per capita real income

30 Aggregate supply

31 Effective demand

32 Dumping

33 Arbitrage and Hedging

34 GDP deflator

35 PIN (Price index numbers) - types

36 Bill of exchange

37 Linkage model

38 How is the change in interest rate decided?

39 MRTP

40 What are the uses of National Income Data?

Part B:

11. Critically evaluate Indian economic performance during the reform period.

22. Examine the role of fiscal policy in India. What are the impacts of fiscal policy on the Indian economy

33. What are the monetary instruments? Using monetarist approach explain how many monetary instruments can be used to achieve economic objective.

44. What are the determinants of aggregate demand and supply? How do changes in them affect national income?

55. What are supply constraints? What is the impact of unemployment on the economy? What policy initiatives do we have to overcome unemployment?

66. What are the causes of inflation? Using demand and supply related factors explain inflation in India?

77. Features of latest trade policy in India. What impact does it have on the external economy of India?

88. Explain the trend in BOP situation in India since 1991 and analyze the trend.

99. Circular flow of income and expenditure.

10.    Consider few macro economic aggregates. How these aggregates are used to analyze the performance of the economy.

111.Characteristics of Business cycle. How fiscal policy is useful to manage BC.

112. Consumption and investment function.

113. Approaches to measure National income and their limitations.

114.  Explain the trade off between inflation & unemployment.

115. Explain the causes of globalization of business.

116. For a developing economy protectionist trade policy is good. Justify.

117. Theories of money.

118. What is Disequilibrium in BOP? How can it be adjusted?

119.  Causes of Business Cycle.

220.  A moderate degree of inflation is the logical concomitant of efficient economic mobilization. Explain and justify.

221. One problem has been asked as a compulsory question.

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