IEcoS (Economic Services) Economics Paper-2: Questions 68 - 73 of 82

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Question number: 68

» Economic Growth and Development » Theories of Growth » Classical Approach Adam Smith, Marx and Schumpeter

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Appeared in Year: 2017

Essay Question▾

Describe in Detail

What is value-in-use and value-in-exchange according to the classical economists? In this context, explain the diamond water paradox as indicated by Adam Smith.

Explanation

  • Value in use is the want satisfying power of a commodity. The satisfaction that a person obtains from the use of a commodity is called as value in use.

    For example, when a person is hungry, the food has a utility for him. It has the ability to satisfy his want.

  • Value in exchange is the amount of goods and services, which we may obtain in

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Question number: 69

» Economic Growth and Development » Theories of Growth » Classical Approach Adam Smith, Marx and Schumpeter

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Appeared in Year: 2010

Essay Question▾

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Elucidate the concept of balanced growth model.

Explanation

  • Nurkse idea of balanced growth explains that a synchronized application of capital to a wide range of industries is necessary for the enlargement of market and for breaking the vicious circle of poverty in an underdeveloped country.

    • This idea rests on the balance in demand approach. He does not neglect the supply side of balanced growth.

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Question number: 70

» International Economics » International Trade, Terms of Trade, Policy, International Trade and Economic Development

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Appeared in Year: 2010

Essay Question▾

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What is Reciprocal Demand? Critically evaluate the reciprocal demand theory?

Explanation

By reciprocal demand, Mill meant the quantities of exports that a country would offer at different terms of trade, in return of varying quantities of imports. In other words, reciprocal demand refers to the intensity of demand for the product of one country in the other country.

  • Assumptions: (i) The trade takes place between two countries, A

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Question number: 71

» International Economics » International Trade, Terms of Trade, Policy, International Trade and Economic Development

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Appeared in Year: 2015

Essay Question▾

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Examine the effect of international trade on the difference in the factor prices ‘between nations’, and the effect of international trade on the relative factor prices and income ‘within’ each nation.

Explanation

  • According to this theory, countries which are rich in labour will export labour intensive goods and those rich in capital will export capital intensive goods.
  • Assumptions of the model:

    • It considers a two-commodity, two-country and two factors case. It takes into account labour and capital. It is possible to extend this to multi-commodity a

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Question number: 72

» Theory of Employment, Output, Inflation, Money and Finance » The Inflationary Gap » Philip's Curve and Its Policy Implication

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Appeared in Year: 2015

Essay Question▾

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The following functions are estimated for an economy:

Consumption Function:

Investment Function:

Government Purchases: G = 200

Taxes: T = 0·2Y

Real demand for money:

Nominal money supply:

Now Estimate the equation for the IS curve and the LM curve. Thereafter, solve the system for equilibrium level of real income and real interest rate.

Explanation

a) IS equation

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Question number: 73

» Economic Growth and Development » Concepts of Economic Growth and Development and Their Measurement

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Appeared in Year: 2016

Essay Question▾

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“The best strategy of development is the creation of imbalances. ” Discuss this statement in light of Indian context.

Explanation

Hirschman’s Unbalanced growth model:

  • According to Hirschman, “Development is a chain of disequilibria that must be kept alive rather than eliminate the disequilibrium of which profits and losses are symptoms in a competitive economy.

    • If economy is to keep moving ahead, the task of development policy is to maintain, tension, disproportions

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