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Lets solve these questions. Very important for final term. Also, please share your current final term subjective questions.

Question 1:

If the CPI for the year 2001 is 176.4 and CPI for the year 2000 is 174 then what will the inflation rate of year 2000?

Solution: ?

Question 2:

Consider an economy described by the following equations:     


Where, Y = 7,000, G = 1,000, T = 1,000

C = 250 + 0.75 (Y-T)

I = 1,000 – 50r

In this economy, compute private saving.

Solution: ?

Question 3:

Calculate the tax multiplier if, MPC = 0.73  

Solution: ?

Question 4:

Find unemployment rate of example of your choice

Solution: ?

Question 5:

 Effect of increase  in MPC on investment

Solution: ?

Question 6:

Keep the concepts of money demand theories in mind, discuss what will be the impact of an increase in each of the following variable on demand for money?

a.  Expected real return on bonds.

b.  Expected inflation rate.

c.  Real wealth.

Solution: ?

Question 7:

Example graph of demand curve and supply curve and we have to find that what happens if :
Income of consumers are high
Price of steel rises

Solution: ?

Question 8:

Why prices are sticky in the short run

Solution: ?

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