EDUCATION CIRCLE

1. The following equations describe an economy: C = 10 + 0.5y I = 190 – 20r  Solution: IS curve describes the equation for product market equilibrium at various  combinations of level of income and rate of interest. Y = AD = C + I Y = 10 + 0.5Y + 190 – 20r Y – 0.5Y = 200 – 20r Y (1- 0.5) = 200 – 20r ½ Y = 200 – 20r Y = 400 – 40r. 2. The following equations describe an economy C = 100 + 0.75Yd I = 50 – 25r T = G = 50 Where C is aggregate consumption, Yd is disposable income, I is aggregate investment. T is taxes, G is government purchases and r is the rate of interest. Derive the IS curve for the economy. Solution: Y = C + I + G Now,  C = 100 + 0.75Yd = 100 + 0.75 (Y- T) = 100 + 0.75 (Y – 50)   I = 50 – 25r  G = T = 50 Hence, Y = C + I + G Y = 100 + 0.75 (Y – 50) + 50 – 25r + 50 Y = 200 + 0.75Y – 37.5 – 25r  Y – 0.75Y = 162.5 – 25r 0.25Y = 162.5 – 25r  Y = 650 – 100r 3. Given the following data about the monetary sector of the economy: Md = 0.4Y – 80r Ms

1.which is not feature of public goods ? A) Non Rival B) Non Excludeble C) vertical line D) Horizontal line 2. If the income elasticity of demand is greater than one, the commodity is: A) a necessity B) a luxury C) an inferior good D) a non – related good 3. Who first proposed the concept of Marginal Utility to explain consumer surplus? A) Keynes B) Dupuit C) Adam Smith D) Ricardo 4. “Choice Reveals Preference” according to: A) Hicks B) Samuelson C) Morgenstern D) Marx 5. When elasticity of demand is greater than one, Marginal Revenue is: A) negative B) zero C) positive D) infinity 6. The flat portion of the Saucer Shaped Modern Average Cost Curve represents: A) Reserve Capacity B) Excess Capacity C) Minimum Capacity D) None of the above 7. Cost of the next best alternative forgone is termed: A) sunk effect B) variable cost C) average cost D) opportunity cost 8. For CES production function, elasticity of substitution

GDPMP= C + I + G     (MP=Market Price ) GNPMP = GDPMP + NFIA  NDPMP = GDPMP – D  NNPMP = GNPMP – D GDPFC = Domestic Factor Income + Consumption of Fixed Capital (FC=Factor Cost) GDPFC = GDPMP – IT + S GNPFC = GNPMP – IT + S GNPFC = Domestic Factor Income + NFIA + Consumption of fixed capital. NDPFC = NDPMP – IT + S NNPFC = NDPFC + NFIA NNPFC = Net Domestic Income + NFIA Personal Income = Private Income – Corporate Taxes – Corporate Savings Personal Disposable Income = Personal Income – (Direct Taxes + Fines, Fees, etc. + Social Security Contributions by Employees) Net National Disposable Income = National Income + Net Indirect Taxes + Net Capital Transfers from the rest of the World Personal Saving = Personal Disposable Income – Personal Consumption Expenditure Gross Domestic Saving = Personal Savings + Private Corporate Savings + Public Savings. PCI= National income (NNPfc)/Population GDP Deflator=Nominal GDP/REAL GDP *100

India has had 8 industrial policies since independence. Industrial policy of 1948  - It decided the model of the economic system of India i.e. mixed economy. It also put industries under Central and State List such as coal, power, railways were in Central List and paper, medicines, cycles were in State List. Industrial policy of 1956  - It started a classification of industries also called as Reservation of Industries. Schedule A had industries with centre's monopoly (which later became Public Sector Undertakings or PSUs). Schedule B had industries where States were to develop and the private sector was to expand the industry. Schedule C had all the industries left out of Schedules A and B. They were to be developed by the private sector. This was the beginning of the License Raj. Industrial policy of 1969  - It was mainly introduced to solve problems of the previous policy. It introduced MRTP (Monopolistic and Restrictive Trade Practices) Act, which was to check if any compa

Chronological Order of Tax 1.Land Revenue Tax-1773 2.Income Tax-1860 act 1961 3.Motor vehicle Tax-1914 4.Entertainment Tax-1922 (wB) 5.Sales Tax-1956 6.Gift Tax act,started and replead-1958 7.Corporation Tax-1961 8.MANVAT-1977(LK JHA COM.) 9.MODVAT-1986 10.Service Tax-1994 11.CENVAT-2000-2001 12.VAT -2003 SVAT(Gujrat) with two other states that's why related sales ,motor and sugarcane but new VAT act and startEd 2005 and it also effectI've in all states from 2014 13.FBT -2005   14.Tribunal Tax-2005 15.GST -2017 NOTE:- 1956:Wealth,Expenditure & Capital Gain Tax COMMITTEE:- Abid Hussain Committee: On Small Scale Industries Athreya Committee: Restructuring Of IDBI Bhoothlingam committee: simplification&Rationalisation of Direct Basel Committee: Banking Supervision Chokshi committee:Consolidate four taxes 1.income 2.wealth 3.Gift 4.surcharge tax Chelliah com