JNU Doubts

[Ashima]

Please help me with these!

[Ashima]

is the answer d?

[Akshay Jain]

purchase of a new house is considered as investment from macro view
so option a is ruled out
u have used ur salary (income) to purchase shares to get some returns so savings
taking out money from savings bank A/c and investing in mutual funds is an act of 0 savings as dere is no net addition/subtraction to savings in economy
so option b and c are ruled out
hence option d is the ans

[Anjali]

Akshay in third there may be a case that mutual funds offer higher interest . I mean it could be an incentive for the person to withdraw his money from his savings account and invest in the mutual funds.

[Anjali]

Ashima for ques 3 , Iam stuck between d and e .

[Arushi :))]

3.
Its b
its a competitive firm and hence it has to choose P = MC
It has a horizontal MC curve and P coincides with it , So at every q P= Mc
 It cant be d @ anjali because MC = K implies TC = k Q and thus Ac = k
So MC and Ac curves are same..

[Arushi :))]

For ques 55.
we have to use the equation MV=PY
For the transactions velocity of money , we have to include value of all the goods - intermediate, final goods
However for the Income velocity of money, only the value of final goods is included.
So that way we get two equations
i) M x transactions velocity of money = value of all goods
ii) M x income velocity of money = value of aggregate income
Vt-Vm = 5
=> Vt= 5+Vm
Let the value of aggregate income be X.
value of total transactions = 6X
M x (5+Vm) = 6X
M x Vm= X
Dividing the first equation by second:
(5+Vm)/Vm=6
=> 5Vm= 5
Therefore, Vm =1
M = 1000, n from equation (ii) we get value of aggregate income = 1x 1000 = 1000
Hence, part a

[mrittik]

qs no 3 it is c...any amount provided rs 12 or more....just simple....dont make it messier

[Arushi :))]

It can't be c !! In perfect competitition why would a firm choose P greater than MC !

[kangkan]

@arushi..did you get the questions 21 to 24 in 2012 paper..the macroeconomy ones...i am unable to understand amit sir's solution...as far as i know balanced budget multiplier is diffrnt from normal multipliers..

and also m getting S=G+I..please help

[Arushi :))]

Hi kangkan, I had solved this question ,,
refer to this and let me know in case of any doubts .
http://discussion-forum.2150183.n2.nabble.com/JNU-2012-SSS-DOUBTS-tp7587457p7587518.html

[Granpa Simpson]

Hii Arushi..but I have a doubt regarding the question of perfect competition..that is how is it that MC and AC are same..since MC=k then TC=kQ+C..and AC=k+C/Q..isn't it so..?

[Arushi :))]

yeah, thats also the possible case,,
But if you draw the diagram , then in that case AC is decreasing function of q,
and that would imply that he should chose a q after the point where P = AC coz only then there are profits for the firm,
But no such option is there , so we have to neglect Tc = k Q + C
And carry on with Tc = K Q so that MC = AC and so any output gives zero profit.

[Arushi :))]

i can attach the diagrams in case you want :)

[Granpa Simpson]

Yes you are right..I dint notice that..AC will be decreasing function of Q in that case AC cannot be rising for any Q, so we can rule out one option..thanx a lot Arushi..:)

[Ashima]

Thanks everyone!

Arushi could u please attach a diagram for this?