# Model Question of Macro Economics

326

New Model Question of Macro Economics of BBS 2nd year. We have provided the question and answers to the respective question.

### Model Question of Macro Economics

The following are questions with answers.

Group – “A” – Brief Answer Question

2. If C=50+0.90Yd and I = 65

Where, C = Consumption

Yd = Disposable income

I = Investment

Find the level of income and consumption at equilibrium.

Solution:

C=50+0.90Yd

I= 65

For equilibrium national income and consumption

Y = C + I

or, Y = 50+0.90Y + 65

or, Y = 115+ 0.9Y

Y – 0.9Y = 115

or 0.1Y = 115

, Y = 115/0.1

or, Y = 1150

Putting Y = 1150 in the consumption function,

C = 50+ 0.9Y

= 50+ (0.9*1,150)

= 1,085

Hence, Equilibrium national income is 1,150 and consumption is 1,085.

4. Calculate investment Multiplier if MPC 1/2, 2/3,3/4,4/5.

5. Point out the causes of poverty in Nepal.

6. Define IS curve.

7. Why do saving curves slope upwards?

8. What is speculative demand for money?

9. Explain any two benefits of foreign direct investment.

10. Point out the difficulties to measure national income.

#### Group- “B” – Short Answer Questions

11. “Saving is vice, not a virtue? Explain.

12. What is the trade cycle? Explain the prosperity phase of the trade cycle.

13. Define GDP and GNP and Calculate GDP at market price and at factor cost following data

14. What is privatization? What is its benefit?

15. Complete the following table and answer the given question.

From the above table explain the relationship between APC and MPC.

16. What is the investment? Discuss the important determinants of investment.

Group- “C” – Long Answer Questions

17. Explain the Keynesian theory of employment. What criticism had been made against this theory?