ISI Sample Paper 2013 ME-II Doubts

Posted by Darth Vader on Apr 29, 2013; 8:05am
URL: http://discussion-forum.276.s1.nabble.com/ISI-Sample-Paper-2013-ME-II-Doubts-tp7580214.html

Hey, any sort of clue or hints would be greatly appreciated.

8. A consumer consumes two goods, x1 and x2, with the following utility
function
U(x1, x2) = U1(x1) + U2(x2).
Suppose that the income elasticity is positive. It is claimed that in the
above set-up all goods are normal. Prove or disprove this claim.

7. A positive investment multiplier does not exist in an open economy
simple Keynesian model when the entire amount of investment goods
is supplied from import. Examine the validity of this statement.