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omECONOMICS

PAPER-III

11i"'f-'tfif- III

NOTE: This paper is of two hundred (200) marks containing four (4) sections.

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Candidates are required to attempt the questions contained in these sections according to the detailed instructions given therein.

~-.;rv;l" wWm (200) ~wtv;;:t "Ff;m (4) -mt1 ~ Wl"f it ;~q1~11 -.;rv;it w "-!"i'R 3Wf>l ~ ~ ~ f.$if., ~~ t"l

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SECTION- I

"""~' Answer the five questions on the basis of the para given below_ Each answer should not exceed30words_ Each question carries five marks_

(5x5=25 marks)

~ %->) -,-p:j fmm'F %- iW'W "1<: fi?\-,-p:) 'l'Ffwi\ i'li"'B<:ftlW I ~'B<:30 ~

(lili" -&R; ;;r%'J: I ~ W1 'lf;;r <=fiB iB '&I

(5x5=25 ~)

Keynes made his celebrated clahn for the priru:iple of effective demand in relation to earlier theory.

"The postulates of classical theory are applicable to a special case only and not to be the genf<ral case, the situation which it assumes being the limiting point of the possible positions of equilibrium_ ]l..fureover, the characteristics of the special case assumed by classical theory happen not to be those of the economic society in which we actually live, with the result that its teaching is misleading and disastrous if we attempt to apply it to the facts of experience_"

- J _ M_ Ke}""'S

iJ<Wh1ili" ftr.;;l~ %-~ ij i'R:l "f 'J'F1'J'l\ -,:p--; %- ftw iJl'R1 'T<Ji" fi'1w:r<l iJ'l'>!'.R ft>:n · '' 'Pm ~ <# iJ<f\1'H<'IIl'J' %W ~ ft>.:% ij ziT '-'PI (ili'; if<: URF''I ft->.1% ij ~'

~ ft>.:% <# "f"'fili <:i>nfi1<l <:W"'' <# i!«W.l1<i\ <# ~ '&I ~ iJ<l¥t£", -,p:;j\>j ~ j;J1J

'19 -,-p:j ~ ft>.:% i'li"'-'lWll 'W ~.lili"<::RTJfi! ~\1'1 ~ ij m '&~~'11-olj Jfl#; 'F'fil·

"!%- \R ~ iJFL•r<i! %- <l".>i'i "!<: rl-r; ili1."ll ~ '&il ~ ~ 'JR<li""il'.ll ~<Bfi" '&!''

1. What is 'effective demand' in l<f<ynsian &anomies ?

itfw1~ iJ<'.l'llW< il ''J'1?1'I"\ -,:p--;' if'l1 '&!

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2. Outlirlf< the postulates of the classical theory to which Keynes is objecting.

'ffi«lb:j ftr.;;i<l <# ?"! iJ<f\1'JW8<i\ iB -aw ili'( f:iR "'R itn 0) iWTJ% ~ •.iT I

3. Why is Keynes objecting to the application of classical theory in economic society we live in?

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4. How can the classical theory be considered an extreme/ special case of a general theory ?

'ffi«lb:j ftr.;;i<l iB fim 'NH~~ iB 'T<l' ill~/~!I"lll'lB1 '1R1 Jfl ~ '&!

5. Can we say that l<f<yne's theory is, infact, a more geTif<ral theory? E:xplam.

if'f "\1'1 ~ ~ '& fili" <"R?(l· #;"n iB ftr.;;i<l ~ · 'T<Ji" ~ ~ '& ( "'ll"Wf iJi't I

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omNote:

SECTION- II

"UI"'rn'- II

This section has fifteen (15) definitional questions of five (5) marks each to be answered in upto (30) words_

(5x15=75 marks)

B'!mi!~(15)*1f'iT'P'l'&l ~'.R'li'li""li;;rz5) ~'&1 ~<8

"B<: iJ<f>F81'1 #n (30) 'F<"i'i ij ~I

(5x15=75 ~)

6. Defirlf< the concept of marginal technical rate of substitution_

'.fow.r'R %-~ Mi~O<liO <:"<: <# iJ<<"PW"ll iB ~1~ <Ji't I

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7. What is meant by barometric price leadership ?

8. Explain 'Rf<al Balance Effect' f. . ' ...,..,.

11«1 1<h ~ :T>F1 <P ~ "''I

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9. What is accelerator?

10. Outlirlf< mall parameters of Human Development Index.

"lF1?1 ~n ~ili" it" 'J'1W ~ <B ~ it 1

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11. What are two gaps in the 'two - gap' analysis ?

tt;:M<iw r<w1~ 0\ i! il .m<: if'l1 '&!

12. Defi"" Value Added Tax.

"¥"! <"f'i<l ili<: (VAT) <P 'fowm it 1

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13. What is the role of a 'Finaru:e Commission' in India ?

14. What is 'reverse merger' ? Give two recent examples from India.

'.foE:il"l ~ if'f '&! we %" <::i<:>\ ij W"' %" il ~ it 1

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15. What are the "Singapore Issues" in the VI/TO?

'fP.'LiT.~. ij "fUG'J' .. '!i." if'l1 '&!

16. On what criteria industrial units in India are identified as small scale units ?

'11«1 ij fiFl 'H~o;Ji 'n if~~ <8 "fq .. ~ ~ #;" 1'VT ij '1Fll JiTill '&!

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17. Define demography.

JRi%<P iB *1~ iJi't I

18. What is infant mortality rate ?

~ 'l"f'! <:<: if'f '&!

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19. What is institutional credit in agriculture ?

~il f::W.JVR mw if'l1 '&!

20. Defi"" standard error of a regression co-efficient.

gMO '1'i'H '}"lfili" <# '11"'Ai" 12" iB *rl!r,l iJi't I

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omNote:

21. (a)

SECTION - III

~-III

The section contains five (5) short ..essay type questions of 12 marks each to be answered in upto 200 words. The candidste may select OTif< elective and

answer all five (5) questions.

(Ux5=60 marks)

B1 "@;gij "'lFr (5) "f1 Wl~W'l'%1 ~W'!ili"(12) ~'&I ~W'lilil "B<: Wl'Fl <i\ -n\ 'lli"iif ij ~ I ~,.jT %W 'T<Ji" ~ ij i\ "'li-;;;; '.R'fi i8 'B<: i'f I

(Ux5=60 ~)

In an OLS model

Y,~a+f3X,+E,

with E(E,)~O

E(E,E,)~Owhen!i'J

~"2 wheni~j

Elective - I

f.:J'lftf<l I

show that l.east Square Technique provides Best Unear unbiased estimators of the parameters.

'T<l' ~LCJ:''L'J!L ~ i! Y,~a+f3X,+E,

#i"W.l E(E,)~O

E(E,E,)~OJPif!i'J

2..,.,. . ~" ""'"''~J

<:"$l'1 fili" ~ i"fl'; M<MO<li 'JR<'il #;" f:T<"ll"WJ 'mfb:i ~ ~litW'1<f1 <f'l 'RR "<Ji«l1 '&I

(b) The following four observations yield, via OLS, the sample regression furu:tion

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Y,~o.5 + o.sx,

Given Y, X, \ X, .x

' ,,

' ' ' ' ' ' ' ' ' ' ' ' (i) Complete the table (ii) Calculate s 2, i.e., sample estimate of the variance of the population

diaturbaru:e tenn. (6+3+3=12)

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~LCJ:''LCJ:<'L #,- '"f'J:f'l il ~ ;;m: ~rl il ~ gM''W"H 'F'f'l ;p:m Wi'l '&I

~"l"f'l Y,~o.s + o.sx,

' Y, X, Y, ,, .x ,,

' ' ' ' ' ' ' ' ' ' ' '

(6+3+3=12) 22. (a) Given the OLS regression results

C ~9734.26 +4.80W -14.37N +235.77X

Where C~Average monthly salary of a primary teacher W ~Average monthly wage of a worker in the private sector N ~Number of teachers per 1000 students

X~Average years of experieru:e of teachers in the model

C~b0 +b1W +b2N+b3X+t

interpret b0, ~. ~. h:J in tenns of teachers' salaries, opportunity wages, class size and experieru:e of a teacher_

~-'T<'L'J!L gM''1'i'H m'"l "!%- '& C ~9734.26 +4.80W -14.37N +235.77X

""" c~ 'T<l' 'Jl'~ %1;1ili" <B iJ"l"\uil '"f~ i1iR W ~ fOriT ~;; ij 'T<l' <liR?H <# if<:Til ~ ~ N ~ 'J% 1000 '.'l:i'i 'n %~ <# Uw:!1 X~%~ %- iJF[>F-if #;-~ iB ~

B'!~il C~b0 +b1W +b2N+b3X+t

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iJF\'1<1 %- rw1w-'1 il <8: 1

(b) Distinguish between R 2 and P in a multiple regression model

'T<Ji" ~ gMO '1'i'H '1f-¥1 ij R 2 (l".l1 jf2 ij .m-<: "Vl1J: <i(

((4x2)+4=12)

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23. (a) In an OLS model, with k variables and n observations (n>k), we have

E(tiJ=O

E(t;i)" 0, when i;ej

E(t;)=a}, i=1,2,3 ...... n

Construct the variance- covariance matrix of the disturbance term t;.

k ;;;iJ "il'.ll n ;;;q,;jaA (n > k) i\ 1¢ 'T<Ji" OLS '11"'*' i! "\1'1 '11# '& · E(ti)=O

E(t;i)* 0, JPif i;ej

E(t;)=ai, i=1,2,3 ...... n

'%fqc·-~C'1<~ #;" '.RRTIH;1$g{HO\ ~ iB ~ iJi't I

(b) Outline etlher Goldfeld-quandt test .Q! Breusch-Pagan test for checking­whether heteroscedasticity is present in a data set.

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(c) Show that weighted least square method can remove the problem of heteroscedasticity from a data set.

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(2+6+4=12)

24. (a) Given Koyek Distributed Lag model.

Y,=f3(1-A) X,+AY,_1+t, OsAs1

Interpret ).. and explain its implication in the model. """ . .. f - . -'\-,., . ·~·; :rr:l <li'I"F!i'S{?'&.(<';g '·"'' '119.1

Y,=f3(1-A) X,+AY,_1+t, OsAs1

).. iP v:rw:11 iJi't "il'.ll ~ ij ~ 'illN'! <8 f:111~Hifl

(b) Critically examine the view that the major signal for multicollinearity problem is the presence of high values for the variance of the estimated co-efficients.

. - .....-'<"- • - --. .c... .. f . <J<F.1l'>+c'Fh ~ "'' '"' i'if1 ~ <Jl'R1I1 <P ~ o·~ iB 'Fpil ~ N':\'1HM '}"'Ri'

'.JU<'II iB ~ 'F'I '& I (6+6=12)

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25. (a) Suppose, the correct model is

Y~l3o+I31X1+I32X2+t 131*0, 132*0 but a researcher estimates

Y~b0 +b1~+~ (i) Is E(b-J ~ 131 ? (ii) If you are using the same sample to estimate

Y- b~+b;X 1+ b;X 2+E'

under what conditions would b 1~b; ?

'1R1 Ji"PI, <:1""W '11"'*' '& Y~I30 +131~+132JS+t 131*0, 132*0 ~ 'T<l' $\TI1•.iT iJ'FRR iR.(l1 '& Y~b0 +b1~+E (i) if'l1 E(b1) ~ f3,_ '& ( (ii) * illl'T ~ iJ:riFT'! %" ttw i1W ~ iB rlTf ~ '&, .,n

(b) Write a note on Indirect l.east Squares as a method of estimating regression co-efficients.

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OR I 3roW

Elective- II

f.:!'lftf\1 II

(3+3+6=12)

21. Explain E. Von. Stackelberg's model of oligopoly. What are its implications ?

ti"l'R 0Ji•.14lj #;" iJPllf>FliH ~ <# "'ll"Wf <it I ~~'.\ if'l1 '&!

22. Distinguish price leadership of a dominant finn from price leadership of a low cost finn in an oligopolistic industry.

'T<Ji" ill'-"l"f'FF<: "TiiV; ij ;:!4"1 'JW4 4F# 'Bl (l".l1 iVl ~ qr;_;]T 'Bl #;" ~ .m<: ~I

23. "Tangency between indifference curve and price line is an expression of the proportionality between marginal utilities and prices" explain.

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24. Outlirlf< Kaldor's model of economic growth with technical progress. How is the model different from Solow's model ?

~ %" M<MO<liO '.Jl1% %" <:11'.1 ;;wfl<.l<Ji" ~ %" ~ <# ~ '.W'(l <Ji't I "!Zf '1f"%B <]-,;] %" '11"'*' il 1\;-,; %il '&!

25. Write a brief note on endogenous growth models. Illustrate your answer with the help of any one model.

<'f<l· ~ '1f"%B iP11 '&! %W 'T<Ji" ~ <# ~ i\ iJ:P:R "B<: <# fqihHI <li'( 1

OR I 3roW

Elective - III

R!'lftf<l III

21. Discuss the relative merits and demerits of Euro -the curreru:y ofEU, on the developing areas particularly Indian exports.

~~ 01. fq41~<li<: •ni''l t=p:f<fi "'!<: t'L <P '¥I ''Iil' i"li"n;i:i%<li"'}"'M<il!i\ <# ~ <li't 1

22. What are TRIPS and TRIJ\.fS ? Discuss the impact of TRIPS on the Indian economy particularly on phannaceutical sector.

'?"B' (TRIPS) "il'.ll ' ~' (TRIMS) iP11 '&! >1wfb:! ill'.P>:vw.ll, fq41~<li<: i)j\!I'jb:j ,_;;;;, '1"<: ?"B %" '1'1?1 iP ~ <Ji't I

23. Explain the role of trade as an engine of economic growth in India.

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24. Explain the various diatortions in the world trading order which have crept in after 1995.

~ v:r'm "'f<W.ll il 1995 %" i":!l<: ;p:m f¥\m fqq/~>il <P v:rw:r <li't 1

25. What are the various external sector refonns which are being taken in India after 1991 ? What is their impact ?

>n«l il 1991 %" qg qm ,;;;; il ~Fl ill"'Riclj '1'1: f¥\m 'J'H if'!1 '&! ~ if'!1 'J'F<1 '&!

OR I 3roW

Elective- IV

R!'lftf<l IV

21. "Indian agriculture is facing great challenges on account of VIITO." Discuss.

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22. Is 'Multi-agency Approach' to rural credit successful in meeting the credit requirements of fanners ? Explain.

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23. Identify the main constraints of agricultural marketing in India. Suggest some measures to solve the problem.

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24. Examine in brief, the impact of economic refonns on Indian agriculture.

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25. Explain the nature and signilicaru:e of fann costs in detennination of agricultural prices.

ijif!r ~ #;" fq•J\<TII ij -,p!T "f"l"f<i"i #;" ~ 'T<"l' ~ ,P v:rw:ll iJi't I

OR I 3roW

Elective - V

fo!l'lftf<l v

21. 'The vigour with which economic plamUng started in India in 1950's has weakened siru:e 1991' Do you agree with the ststements ? Give reasons.

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22. Outli"" the main steps tsken by the government in recent years in the direction of public expenditure refonns.

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23. 'Agriculture continues to occupy centre-stsge in the Tlf<gotiations of VI/TO'. Elaborate the ststement.

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24. Point out the provisions of 'National Highway Development- Project' in India. What major hurdles are being faced in the implementstion of the programme ?

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W'&!

25. Examine the main provisions of long tenn EXIM policy (2004-09) of India with special refereru:e to promoting exports.

~ "<f'i i":!'Z9l "ifi #;" ftrl: '11«1 <# ~ V:WW ~ (2.004-09) i"Ji" '!WI %1'Toif <# ~ iJi't I

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SECTION- IV

"UI"'rn'- I V

This part has OTif< question of (40) marks to be answered in upto 1000 words_

(40x1=40 marks)

B1 m il 'T<l' W1 ;;r-,_;f-n- z 40) 00 <B '& 1 f:iruiB ~ -,_;v;w; 'T<l' \fJR

(1000)~-ij~l

(40x1=40 ~)

26. Given a long-period time series dsta, an econometrician has been insbucted to develop a model that might be used for forecasting the future behaviour of the variable under consideration

Write an essay covering various econometric aspects of the issue, the possible model(s) that might be utilised, and the robustness and limitations of the model(s). ,___ ''f. ., -. ···pp -~ --f. f -~"- :rr:J: 'T<l' <:'"'l<hl d<h "<hR $liT <Jl1<h" n 'T<l' ~4 rwn "<hl '9''"'" <B 'T<l' ~1<h BM

ili13 ili" ftw ~'il fiF:r 'T"ll, f:iruiB 'N'i\-r; ~·J'9 "1: ili" >u<V ~ <B >1~ <V-R %-ftrl: fiF:r Jfl <:T<h(l1 \ill B1 '1i. #;-"¢\of~ '1'Zfq<il, owjiC?l <:i>nfi1<l '1f-%B (-;:f~) ,P fPiildl <l'-ll <:fTqp:i\ 'n 'T<Ji"

t=p;j•J f;_;pjf I

0Rj3JW:IT

In tenns of Neumann- Morgenstem index explain the behaviour of a risk averter and risk lover in an uncertain situation_

0Rj3JW:IT

'&anomie development is not complete without taking into account the environmental issues_' Elaborate_

" Tf'll~ '!'i1 "R '-"A %->) ftRI iWfl<.l<!i" ~ 'I'!i ~ '& 1" "'li'Wll <it I

0Rj3JW:IT

With the breaking down of boundaries of various segments of financial institutions like banks, lnsuraru:e finns and capital market intstitutions, problems of appropriate measures of regulation and appropriate regulatory authority have come to the fore_ Discuss the regularity issues that have become important and outli"" a regulatory mechanism that should be in place to meet the emerging needs_

" liBb:i W.:Ri ili" 9-f\m <tit .. -;,tn W,, <i"l1 'F"il, •i _,' i':fiJffi Wm <P <:ft'll<il ili" ~ %- <:11'-l W " . -- f.f -<:;. ' ~~ .,_-1 ~'l'H <li' ~ ~ <l"-11 ~1 ~'PH "'''J<h1'1i <P fHf>H. -oT<!-l(l ~~I 'l<h'

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,P ~ '.I«Jl <it I

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0Rj3JW:IT

State and explain the monetary approach to the balance of paymentadjusbnent issue_ How is this theory clifferent from the traditional approach? Discuss its limitations in case of developing countries with particular refereru:e to India_

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Marks Obtained

' . ~1

' . ~1

' . ~1

' . ~1 ]i ]i ]i ]i !z :E§ !z :E§ !z :E§ !z :E§

' " " ' ' n ' n

' '" ~ n

' '' " ' 0 " 00 00

' " • "' ' " " "' " ~ • ~

' " • M

w " ffi "' n " " 00

n " " "' G '" @ ~

" " M 00

G " " ~

w " ffi " n " " " n ~ ffi • " " " ~

w " w %

n " TI %

" " " " ~ '" " %

" " " %

" ffi ' ;m

Total l\1arks Obtamed (in words) _

(in figures) _

Signature & Name of the Coordinator _

(Evaluation) Date_

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