What are official reserve transactions? | Class 12 Macro Economics Chapter Open Economy Macroeconomics, Open Economy Macroeconomics NCERT Solutions

Differentiate between devaluation and depreciation.

What is a barter system? What are its drawbacks?

Write down some of the limitations of using GDP as an index of welfare of a country.

Explain the relation between government deficit and government debt.

From the following data, calculate Personal Income and Personal Disposable Income.
                                                                               Rs (crore)
(a) Net Domestic Product at factor cost                    8,000
(b) Net Factor Income from abroad                              200
(c) Undisbursed Profit                                                1,000
(d) Corporate Tax                                                         500
(e) Interest Received by Households                         1,500
(f) Interest Paid by Households                                  1,200
(g) Transfer Income                                                       300
(h) Personal Tax                                                            500

Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.

Give the relationship between the revenue deficit and the fiscal deficit.

Discuss the issue of deficit reduction.

What is the difference between ex ante investment and ex post investment?

Explain ‘Paradox of Thrift’.

Would the central bank need to intervene in a managed floating system? Explain why.

What are the main functions of money? How does money overcome the shortcomings of a barter system?

What are the alternative definitions of money supply in India?

Calculate the open economy multiplier with proportional taxes, T = tY, instead of lump-sum taxes as assumed in the text.

What are the four factors of production and what are the remunerations to each of these called?

Describe the Great Depression of 1929.

Explain the automatic mechanism by which BoP equilibrium was achieved under the gold standard.

In the above question, calculate the effect on output of a 10 per cent increase in transfers, and a 10 per cent increase in lump-sum taxes. Compare the effects of the two.

If inflation is higher in country A than in Country B, and the exchange rate between the two countries is fixed, what is likely to happen to the trade balance between the two countries?

Discuss some of the exchange rate arrangements that countries have entered into to bring about stability in their external accounts.