IEcoS (Economic Services) Economics Paper-2: Questions 74 - 82 of 82

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Question number: 74

» Economic Thought » Mercantilism Physiocrats

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

State briefly the key propositions of Monetarist school of macroeconomics.

Explanation

Monetary variables which includes the growth rate of the stock of money strongly influence the determination of the behavior of nominal and real GNP in the short-run.

  • Rapid growth of money supply in excess of the long-run growth of real output cannot only be offset by continuous adjustments in income velocity or short-run adjustments in outpu

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Question number: 75

» Economic Growth and Development » Theories of Economic Development

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Appeared in Year: 2016

Essay Question▾

Describe in Detail

Describe Quesnay’s Tableau economies. What effect did it have on modern economic thought?

Explanation

After discovering the source of wealth, the physio rats turned to the problem of how wealth produced by the agriculturalists gets circulated among the different classes of the society.

  • The idea was given by a famous physio rat Quesnay through tableau economies.

  • He was a doctor and applied his biological knowledge to the economy and compar

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Question number: 76

» International Economics » Theories of International Trade

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Appeared in Year: 2016

Essay Question▾

Describe in Detail

Explain and derive foreign trade multiplier.

Explanation

The foreign trade multiplier, also known as the export multiplier, operates like the investment multiplier of Keynes. It may be defined as the amount by which the national income of a country will be raised by a unit increase in domestic investment on exports.

  • In a country, an increase in exporters’ income will stimulate them to expand their

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Question number: 77

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

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

Explain the term capital deepening.

Explanation

Capital deepening will help to increase output through better technology and higher output per worker, for example, new technology will help in making capital more productive.

  • Capital deepening will lead to rise in labour productivity. A development process involves a transition from labour intensive traditional agriculture to more capital-in

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Question number: 78

» Balance of Payments » Exchange Rates

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

Distinguish between Hot money and Capital flight.

Explanation

Capital flight is the uncertain and rapid flowing of large sums of money out of a country.

  • Capital flight may be legal, as in the case of foreign investors who send back their profits to their home country, or it may be illegal as in the case of those economies where the transfer of assets out of a country cannot take place.

  • Capital fligh

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Question number: 79

» Financial and Capital Market » Financial and Capital Market » Financial Markets

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Appeared in Year: 2017

Essay Question▾

Describe in Detail

Why do financial intermediaries like banks exist in a modem money using economy?

Explanation

  • Banks play an important role in the economic development of the country apart from being the lender to people and accepting deposits.

    • They are not only dealers in money but also leaders in the development. They are not only the storehouse of the country’s wealth but also are the reservoirs of resources necessary for economic development.

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Question number: 80

» Theory of Employment, Output, Inflation, Money and Finance » The Classical Theory of Employment and Output and Neo Classical Approaches

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Appeared in Year: 2015

Essay Question▾

Describe in Detail

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 somethin

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Question number: 81

» Economic Growth and Development » Theories of Economic Development

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

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 w

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Question number: 82

» Balance of Payments » Disequilibrium in Balance of Payments

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Appeared in Year: 2016

Essay Question▾

Describe in Detail

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 consider

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