Re: JNU MA Economics Past Year Paper- 2012

Posted by MI on Apr 29, 2013; 12:51pm
URL: http://discussion-forum.276.s1.nabble.com/JNU-MA-Economics-Past-Year-Paper-2012-tp7580215p7580226.html

Hi Lord Vader, (:P)

Y= C(w) + C (nw) + G  ...(no other expenditure as given)

C(w)...consumption by worker ... ans so on

Rs.1 of Y will result in Rs. 0.75 of worker income and Rs. 0.25 of non worker income.

Q 22. Personal savings are given by = Y-C(w)-C(nw)

As there is no external sector G must be financed by personal savings. So equilibrium condition is given by

S=G (option A)

Q. 23  E (planned expenditure) = C(w) + C(nw) + G

As given C(w)= total income earned by workers = 3Y/4

For non workers C(nw) = C* .....(they spend fixed amount on consumption)
 
E= 3Y/4 + C* +G

in equilibrium E=Y

Delta Y = 4 x Delta G  ...(as Delta C* id zero)

Option C

Q.24  Similarly solving for equilibrium condition will give option B

E = 0.8(3Y/4) + C* + G

0.4 x delta Y= Delta G .....(Assuming Delta C* =0)


Q 25 Option D

As workers consume all their income balanced budget expansion will only shift expenditure from C(w) to G

Correct Answer is no change in income

Q 26 Option A

E= 0.8 (3Y/4 -T) +C* +G

Putting E= Y

0.4 x Y = G-0.8 x T

But Delta G = Delta T

so after differentiation

0.4Y=0.2G

Y= 0.5G