Optionals IAS Mains Economics: Questions 128 - 136 of 199

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Question 128

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Appeared in Year: 2015

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Essay▾

Is inflation better measured by CPI or WPI?

Explanation

  • Wholesale price index (WPI) and Consumer price index (CPI) are the two primary measures of inflation.
    • Inflation should be measured based on the rise in price of a basket of inflationary items that directly affect the common man. CPI-based inflation captures this better than WPI-based inflation.
    • A high CPI, on the other hand, is something that directl

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Question 129

Theories of under Development in an Open Economy
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Appeared in Year: 2010

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Essay▾

State the stages of economic growth in Rostow’s model.

Explanation

Professor W. W. Rostow has sought an historical approach to the process of economic development.

He refers to five stages of economic growth:

  • Traditional society: According to him, the structure of the traditional society was based on primitive technology and orthodox ideas of the people.
    • The modern facilities of science and technology were absent. Th

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Question 130

BOP, Adjustments and Policy Coordination
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Appeared in Year: 2016

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Distinguish between autonomous and accommodating transactions. What role do the accommodating transactions play in the balance of payments?

Explanation

  • Autonomous transactions are those which occur in the current and capital accounts for business or profit motive independently of the BOP considerations.
    • All the transactions such as visible and invisible exports and imports, unilateral transfer receipts do affect country’s balance of payments but these are, in no way, caused by the consideration of

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Question 131

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Appeared in Year: 2012

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Discuss the role of property rights and transaction costs in relation to Coase Theorem.

Explanation

The article ‘The Problem of Social Cost’ was published in the journal of ‘Law and Economics’ in 1960. He argued that govt. need not be involved in internalizing the externalities.

  • Private bargain and negotiations can lead to efficient solution without government intervention. This view is popularly called Coase theorem.
  • The basic idea of this theorem

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Question 132

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Appeared in Year: 2012

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Essay▾

Write a short note on Public Choice theory.

Explanation

Public choice theory was developed in USA during the past two or three decades. This approach is associated with the economists like A. Downs, J. M. Buchanan and G. Tullock and others.

  • Public choice is concerned with the application of economics with that of political science. The growth of public sector has been an important objective of public cho

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Question 133

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Appeared in Year: 2012

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Essay▾

Explain the methods of determining shadow price.

Explanation

  • Shadow prices have been used as an adjective in three senses:
    • In mathematical programming, the term is used for interpretation of dual problem and in this sense, the shadow price Lagrange’s multiplier for constraint optimization.
    • The term is used to cover the benefits and costs that are unpriced.
    • The shadow prices are used in those countries where pri

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Question 134

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Appeared in Year: 2010

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What do you mean by tax incidence? Analyze how is it determined under the modern theory of incidence of taxation?

Explanation

Tax incidence is defined as its final resting place. It is to be seen and judged in terms of the money burden. Thus, the incidence of a tax is upon that economic unit which finally bear the money burden of it and which are not able to pass it on to others.

  • The modern economists like Dalton were of the view that the shifting of taxation is basically

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Question 135

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Appeared in Year: 2018

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Essay▾

In the case of Corporate Tax, who bears the incidence? Substantiate your answer in the light of Herberger Model. (2012)

Explanation

Corporation tax is considered to be the most controversial issue in tax incidence analysis.

  • According to the traditional view, shifting of corporation tax is not possible but modern economists do not agree with this view.
  • In the opinion of the traditional thinkers on this subject matter, the burden rests with the stockholders through reduced dividend

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Question 136

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Appeared in Year: 2010

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Essay▾

Explain the causes and consequences of global climate change and analyze international initiatives taken under this regard.

Explanation

  • Global warming refers to an ever increasing and continuing rise in the average temperature of the climate system of the Earth.
    • Causes: The drastic increase in the emission of carbon dioxide within the past few years, caused by burning fossil fuels has been the major reason for the change of temperature in the atmosphere. More than of the worldwide e

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