2015
(November)
ECONOMICS
(Major)
Course: 504
(Monetary Theories and Financial Markets)
Full Marks: 80
Pass Marks: 32
Time: 3 hours
The figures in the margin indicate full marks for the questions
1. Answer/Choose the correct answer: 1x8=8
- Why money is called a ‘highly liquid asset’?
- What is stagflation?
- Demand for money refers to
- Public wish to hold money in cash.
- Public wish to spend money.
- Both (i) and (ii)
- None of the above.
- Which of the following statements is true regarding SLR?
- To meet SLR, commercial banks can use cash only.
- SLR is maintained by the commercial banks with themselves.
- Both (i) and (ii).
- None of the above.
- According to Keynes, economic fluctuation is due to
- Higher level of aggregate supply.
- Changes in the level of aggregate effective demand.
- Changes in the level of investment function.
- None of the above.
- Credit creation is the important function of
- Commercial bank and non-banking financial institution.
- Commercial bank.
- Nonbanking financial institution.
- None of the above.
- Under full employment, inflation is called
- Partial inflation.
- Sectoral inflation.
- Sporadic inflation.
- None of the above.
- Which one among the following is the major shareholder of the State Financial Corporation in India?
- State Government.
- Reserve Bank of India.
- Scheduled Commercial Banks.
- All of the above.
2. Write short notes on any four of the following (within 150 words each): 4x4=16
- Determinants of money supply.
- Philips curve.
- Meaning and phases of trade cycle.
- Nonbanking financial intermediaries in India.
- Functions of capital.
- Quantitative measures of credit control.
Answer the following questions (within 500 words each):
3. (a) What do you mean by value of money? Discuss the superiorities of cash balance approach over cash transaction approach. Mention Keynesian views on it. 2+6+4=12
Or
(b) Discuss the Keynesian approach of demand for money with its limitations. 7+5=12
4. (a) Write notes on the following: 5+6=11
- Inflationary gap.
- Distinction between demand-pull inflation and cost-push inflation.
Or
(b) What is monetary policy? What are its tools and objectives? Discuss the role of selective credit control in Indian economy. 2+4+5=11
5. (a) What do you mean by business cycle? Critically explain Hawtrey’s monetary theory of business cycle. 2+9
Or
(b) Discuss the innovation theory of trade cycle. Mention two important measures to control trade cycle. 3+8
6. (a) Discuss various objectives of bank’s portfolio management. How far can these objectives be achieved? 7+4
Or
(b) Examine the role of commercial banks and rural banks in agricultural development in India. What are the problems faced by these banks? 8+3=11
7. (a) What is capital market? What are its components and functions? Mention two differences between money market and capital market. 2+7+2=11
Or
(b) Discuss various financial sector reforms undertaken by the Central Government. 11
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