Macro Jnu doubts

[Shefali]

46. According to PPP theory, the yen price of the dollar would rise in a year from 130 to 135 yen if along with a U.S. inflation rate of 6 percent, the Japanese inflation rate is ________ percent.
(a) 11.00
(b) 1.00
(c) 23.08
(d) 9.85


1. If a country’s private saving is 100 and government saving is –100, domestic private investment
(a) must be 200.
(b) must be zero.
(c) is equal to the net amount the economy borrows from other countries.
(d) is equal to the net amount the economy lends to other countries.

33. Which of the following will not create an adverse supply shock
(a) Appreciation of the dollar
(b) Depreciation of the dollar
(c) Higher real price of oil
(d) Drought in a large farming state

[Granpa Simpson]

Q1) c. Because S=Pvt Savings=govt. savings...since S=0, so S-I is negative which means this amount is borrowed..!!!!

Q33) c.

[Shefali]

ThAnxx...pls help me with ques 46

[Ashima]

1st is c

But Subhayu, in 33rd its asked which will not create an adverse supply shock; high oil prices will always reduce the supply, c and d cant be.

Btw a and b, supply will decrease when dollar is depreciated. Should be "b", isn't it?

[The Villain]

q1 is c
q33 is a...

[Spiti]

Answer is I think 9.85
Inflation in US = 6%
US currency appreciating wrt Japanese means inflation in Japan is more than inflation in US
Is we take e= percentage change in exchange rate(which should be negative in case of appreciation)
e=(130-135)/130=-3.85%
We have the approximate relation inflUS=inflJAPAN+e
This would give the required result

[Dreyfus]

@ashima its 9.85% for q1.....

[The Villain]

Yeah its 9.85...

[Shefali]

Thanku Everyone.
the ans are 46 d
1 c
33 a

[Shefali]

29. A person had an income of $20,000 last year and paid $10,000 in tax. This year, the person
had an income of $100,000 and paid $30,000 in tax. The person’s marginal tax rate is:
a. 25% b. 30% c. 50% d. 100%


30. The tax in question 29 is
a. progressive b. regressive c. proportional

[Granpa Simpson]

@Ashima: actually i missed "not create"..i took it to be create...the answer will be a..!!!

[Homer Simpson]

29(a), 30(b)

[kangkan]

I think question will depend on which frmae you a re looking for....if you are US,then dollar depreciation will cause a supply shock..if you are in india,and since oil prices are usually ain dollars,the aprreciation of dollar willl cause a supply shock here..

[Anjali]

46-d
1-c
But Iam not clear with ques 33 - please help

[Shefali]

Tsuki pls explain me hw u got the answers....

[Homer Simpson]

hey, Marginal tax rate equals the change in taxes divided by the change in tax base, expressed as a percentage. So basically, change in income = 80000 and change in tax = 20000 which gives us 25%

Observe, that with an income of 20000, he is paying 50% of it as taxes. But when his income rose to 1,00,000 he is only paying 30% as taxes - which is regressive.

[Shefali]

Thanx

[Homer Simpson]

could you have a look at these JNU doubts? http://discussion-forum.2150183.n2.nabble.com/JNU-doubts-td7587042.html  thanks!

[Anjali]

@Subhayu please help me with ques 33 - are we taking India as domestic country and US as foreign ?

[Harish Kumar]

(c)
(c)
(a)
I guess