Section - I

1. Answer any nine of the following parts in about 50 words each:

Marks: 5 × 9 = 45

(a) Why did Ricardo argue that a capitalist economy would sooner or later reach a 'stationary state'?

(Comment for solution.)

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(b) Explain why most of the mainstream economists before Keynes assumed that a capitalist economy cannot have 'involuntary unemployment'.

(Comment for solution.)

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(c) State and comment on the applicability of Say's law.

(Comment for solution.)

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(d) How does NDP at factor cost differ from GNP at market prices?

(Comment for solution.)

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(e) Explain the concept of 'inflationary gap'

(Comment for solution.)

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(f) List three reasons for not regarding GDP as an appropriate measure of well being.

(Comment for solution.)

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(g) Indicate how sustainability considerations can be brought into national income accounting.

(Comment for solution.)

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(h) "The notion that countries should specialise based on their factor endowments is too static a view" Comment.

(Comment for solution.)

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(i) Citing one example each, distinguish between hedging, speculation and arbitrage trading in the context of derivatives.

(Comment for solution.)

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(j) Is the use of a Multiple Exchange Rates (MER) regime limited to that of a balance of payments policy instrument ?

(Comment for solution.)

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Section - II

Answer any seven of the following questions in about 150 words each:

Marks: 15 × 7 = 105

2. "Adam Smith's concept of 'Invisible Hand' teaches us that everything in an economy can be left to market forces." Discuss.

(Comment for solution.)

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3. Explain the speculative demand for money and its relationship to the 'liquidity trap'.

(Comment for solution.)

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4. Distinguish between the role of the State in the context of Keynesian unemployment and the role of the State in a development context.

(Comment for solution.)

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5. How does Marx's theory of wages differ from 'the iron law of wages's of Ricardo?

(Comment for solution.)

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6. Write a brief note on the doctrine of 'big push' in the theory of economic development.

(Comment for solution.)

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7. What are the implications of the Phillips curve for economic policy?

(Comment for solution.)

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8. Explain Sen's critique of utilitarian approach to economic development.

(Comment for solution.)

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9. "Conventional trade theory fails to take into account structural inequalities among nations." Discuss.

(Comment for solution.)

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10. Examine the 'race-to-the-top' and the 'race-to-the-bottom' theories relating to Multinational Corporations (MNCs) operating in developing countires. Which of these, according to you, is more supported by empirical evidence?

(Comment for solution.)

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Section - III

Attempt any two of the following questions in about 300 words each.

Marks: 25 × 2 = 50

11. With respect to the role of the State in economic development, compare the experiences of India and China.

(Comment for solution.)

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12. Examine the impact of policies of liberalization, privatization and globalization on poverty and inequality.

(Comment for solution.)

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13. Compare and contrast Keynes and Marx as macroeconomic analysts of the capitalist economy.

(Comment for solution.)

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