Macro Economics bba / b.com APRIL 2024

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Macro Economics bba / b.com APRIL 2024

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Macro Economics
April 2024 Examination
Q1. ā€œGreat Depression is one of the most significant historical event and has
significantly influenced several political, Economic and Social issues that have affected
our countryā€. In view to the above statement, elaborate about the Great Depression and
its impact on the global economy. (10 Marks)
Ans 1.
Introduction:
The Great Depression, spanning from 1929 to the late 1930s, stands as a watershed moment
in economic history, significantly shaping the trajectory of nations worldwide. Originating in
the United States with the stock market crash of October 1929, its repercussions rippled
across the globe, ushering in a period of profound economic downturn. This catastrophic
event left an indelible mark on various facets of society, including politics, economics, and
social dynamics. By delving into the causes and consequences of the Great Depression, we
can glean valuable insights into understanding the vulnerabilities of economies and the
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Q2. ā€œNational income estimates are the most comprehensive measures of aggregate
economic activity in an economy. It is through such estimates that we know the
aggregate yield of the economy and can lay down future economic policy for
developmentā€
With regard to the above statement, explain the various challenges and limitations in
measuring national income. (10 Marks)
Ans 2.
Introduction:
National income estimates serve as crucial indicators of the overall economic performance of
a country, providing insights into its aggregate economic activity. They play a pivotal role in
guiding policymakers in formulating strategies for economic development. However, despite
their significance, measuring national income is not without challenges and limitations. This
essay aims to explore these challenges and limitations in detail, shedding light on the
complexities involved in accurately gauging the economic output of a nation.
Concept and discussion
Measuring national income is a fundamental aspect of macroeconomics, providing a snapshot
of a country’s economic performance over a specific period. However, the task is intricate due
Q3 a. You are given the following data. Calculate GNP and GDP at factor cost. (5
Marks)
GNPMP
600
Indirect Taxes 50
Subsidies 30
NFIA 100
Depreciation 50
Transfer payments 15
Retained Earnings of Companies 25
Personal Taxes 15
Personal Savings 80
Ans 3a.
Introduction:
Gross National Product at Market Prices (GNPMP) serves as a crucial indicator of a country’s
economic performance, representing the total value of goods and services produced by its
residents, regardless of where they are located. Calculating GNP and GDP at factor cost
involves adjusting GNPMP for indirect taxes, subsidies, net factor income from abroad
(NFIA), depreciation, transfer payments, retained earnings of companies, personal taxes, and
Q3b. There are different methods to calculate National Income. Elaborate any one
method for measuring national income. (5 Marks)
Ans 3b.
Introduction:
Measuring national income is crucial for assessing the economic performance of a country.
Various methods exist for calculating national income, each offering unique insights into the
economy’s output and income distribution. One prominent method is the expenditure
approach, which evaluates national income by summing up the total expenditures made
within an economy over a specific period. This essay will elaborate on the expenditure

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