BUSINESS ECONOMICS AND QUANTITATIVE METHODS -II
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Question paper 1
1. (a) Median divides the series into ...............;. parts.
(b) What is the value of perfect correlation?
(i) -3 or 3 (ii) 0 (iii) 0 or 1 (iv) -1 or 1
(c) What is gross domestic product at market price?
(d) Money has general acceptability by govt so it is caled
(i) Currency (ii) Legal tender money
(iii) Fiat money (iv) All
(e) The exchange value of money between two countries is called
(i) Cunencyrate (iii) Foreign exchange rate
(ii) Exchangepolicy (iv) Foreignpolicy.
Answer:
1.(a) 2 Parts
(b) 0 or 1
(c) This is a gross concept. It means it included depreciation.
(d) Fiat Money
(e) Foreign Exchange rate
2. Write the rnerits of arithmetic mean
Answer:
Among the various measure of the central tendency the most widely used measure is arithmetic average. It is also known as mean.
3. Explain the characteristics of coefficient of skewness as given by Bowley
Answer:
The value of Bowley's coefficient of skewness lies between -1 or +1
If Q3-M<M-Q1, there will be negative skewness and if Q3-M<M-Q1, there will be positive skewness.
4. What are the characteristics of index number ?
Answer:
Study of a variable or a group a variable: Index number study the change in the magnitude of a variable or a group of the related variable.
Basis of comparison: The change in price in level various commodity can be ascertained with the help of index number.
5. Write the objectives of regression analysis.
Answer:
Partial regression analysis: In the case of Partial regression analysis, one variable is depended variable and one other variable is an independent variable.
6. Explain circular flow of income.in two sector economy without saving,
Answer:
6. Explain circular flow of income.in two-sector economy without saving,
Answer:
Involuntary unemployment: Such a situation in which an able person is ready to work at the wage rate prevailing in the market but he does not get work is known as involuntary unemployment.
8. What is Bankrate?
Answer:
Bank rate: Bank rate is the rate charged by the central bank for leading funds to commercial bank.
10. Calculate coefficient of skewness by Karl-Pearson's method:
Income: 5 10 15 20 25 30 35 40 No of Labourers 26 29 40 35 26 18 14 12 Answer:
dx=x-A
x f a=15 fdx dx2 fdx2 5 26 -10 -260 100 2600 10 29 -5 -145 25 725 15 40 0 0 0 0 20 35 5 175 25 875 25 26 10 260 100 2600 30 18 15 270 225 4050 35 14 20 280 400 5600 40 12 25 300 625 7500 200 880 23950 sol: \(\bar {X}=A+{\Sigma fdx\over N }\)
\(15+{880\over200}\)
15+4.4=19.4
11. Calucalate Index number by simple aggregative methord and simple average of price relative.
Commodities Price 2012 Price 2015 A 152 193 B 110 195 C 130 175 D 250 650 E 80 50 Answer:
Comm p0 p1 A 152 193 B 110 95 C 130 175 D 250 650 E 80 50 722 1163 Sol: P01\(={EP_1\over EP_0}*100={1163 \over722}*100\)
=1.6100*100
= 161.08
12. Find regression equation Y on X from the following data:
X 6 2 10 4 8
Y 9 11 5 8 7
Answer:
X Y (Y=11.9-0.65x) \(y\)-\(\hat{y}\) (\(y-\hat{y}\))2 6 9 11.9-(0.65*6)=8 1 1 2 11 11.9(0.65*2)=10.6 0.4 0.16 10 5 11.9(0.65*10)=5.4 -0.4 0.16 4 8 11.9(0.65*4)=9.3 -1.3 1.69 8 7 11.9(0.65*8)=6.7 0.3 0.09 \(E(y-\hat{y})=3.1\) Sol: y on x \(\sqrt \Sigma{y-\hat{y}} \over{n} \)\(\sqrt {3.1\over 5} = \sqrt {0.62} \) =0.79
13. Calculate from the following data :
(a) Gross national prodrlct at market price and
(b) Net national product at market price
(i) Private consumption expenditure = 1,00,000
(ii) Govt. consumption expenditure = 12,500
(iii) Gross capital formation = 2,500
(iv) Exports = 6,000 (v) Imports = 9,000
(vi) Net factor income from abroad = 750
(vii) Depreciation = 40
Answer:
GDP=Govt Cons Exp + Private final consumption +Fixed capital formation + Net expart (impart- export)
= 100000+1250+2500+(9000+6000)
= 117650
14. what is average propensity to consume ? Explain with diagram.
Answer:
Average propensity to consume hel[p to explain various aspects of consumption and income at various level of income. APC is a ratio of total consumption total income
\(APC={Total Cosumption\over Total Income } \)
\(APC={C\over Y}\)
Income Consumption APC 50 40 40/50=0.8 100 60 60/100=0.6 15. What are the primary functions of money ?
Answer:
Commercial bank accepts the saving of their customer in the form of deposit. people deposit their money with a Commercial bank on the basis of their convenience and economic condition. In order to attract customer Commercial bank keep the deposit of people in the various type of deposit account.
16. what is the difference between revenue receipt and capital receipt ?
Answer:
Revenue Receipt Capital Receipt Revenue expenditure does not generate any asset for government.
Revenue expenditure does not reduce any liability of government.
Capital expenditure generates any asset for government.
Capital expenditure reduce any liability of government.
17. What is the difference between balance of payment and balance of trade ?
Answer:
Balance of payment Balance of tracle The concept of Balance of payment is wider than The concept balance of tracle.
The concept of Balance of payment is more important than The concept balance of tracle.
Balance of tracle is part of Balance of payment
Balance of tracle provide complete knowledge in the regard
18. Calculate standard deviation and mean from the following data.:
Size: 0-4 4-8 8:-12 t2-16 16-20 20-24 24-28 No. of farms : 4 20 10 5 4 3 2 Answer:
CI F X Fx x=10.166 X2 Fx2 0-4 4 2 8 -8.166 66.6835 266.734 4-8 20 6 120 -4.166 17.355 347.1 8-12 10 10 100 -0.166 0.2755 2.755 12-16 5 14 70 3.834 14.6995 73.4975 16-20 4 18 72 7.834 61.371 245.484 20-24 3 22 66 11.834 140.043 420.129 24-28 2 26 52 15.834 250.715 501.43 48 488 551.425 1857.1295 Sol:\(\hat X {EFX\over{FF}}={488\over 48}=10.166\)
\(\sigma = \sqrt {EFX\over {N} }=\sqrt{1857.1295\over48}=\sqrt38.69019\)
19. How will you measure national income by product method ?
or
What is govt. budget ? What are its objectives ?
Answer:
The account related to the revenue and expenditure of the government during a specific and financial is known as budget.
Objectives Of budget
Budget is not only a statement of revenue and expenditure of the government rather it is an important tool for achieving the objectives of the economic policy of the country.
Reallocation of resource: Budget of governement is mean of of realloctaion of resource with the help of budget govt. may restrt to allocation of imited resorces in various uses on the basis of its ecnomics social and poitical policy
Ecnomic stability One of the main objective of the Buje of government is the achve regulates the trade cycle
Management f Public Enterprices : Government Manage its commercial enterprices also with the help of Budget
Question paper 2
1. (a) Deciles divide the series into..............parts.
(b) What are the limits of r in corrslation ?
(i) -1 and 1 (ii) -3 and 3 (iii) -1 and 0 (iv) 0 and 1
(c) What is net domestic product at market price ?
(d) Name the thing which is generally accepted as medium of exchange.
(i) Metatr (ii) Petrol (iii) Money (iv) Paper
(e) If the value of visible exports are more than visible irnport, their balance of trade is called.
(i) Unfavourable (ii) InBalance (iii) Favourable (iv) Imbalance
Answer:
1(a) 4
(b) 0 and 1
(c) Net Domestic Product at Market Price is the difference between gross domestic product at market price and depreciation
(d) Money
(e) Favourable
2. Explain the characteristics of arithmetic mean.
Answer:
Simple Mean: When Equal importance given to all the value while calculating mean such a mean is called simple mean
Weighted mean: When different wages are given to the different value of the serious is called weighted mean
3. Explain the characteristics of coefficient of skewness as given by Cayley.
Answer:
4. Write the limitations of index number.
Answer:
Purpose of index number: Various type of index number serve a special purpose for which they have been construct
Selection of base period: Index number are constructed with refrence to some base period or base year.
5. What is difference between correlation and regression ?
Answer:
Correlation : They are variable may be due to a pure chance
High degree of correlation between variable
Regulation : They are thearetical explation for the existance of correlation
Low degree of Regulation between variable.
6. What is circular flow of income in four sector model ?
Answer:
Four Sector Model : Such a model of circular flow of sector household sector, govrnment sector and Rest of the world sector are included apart from financial sector is known as four model
7. What is disguised unemployment ?
Answer:
Disguised unemployment: Disguised unemployment or hidden unemployment is a kind of unemployment where some people seem to be employed but are actually not This type of usually occur when there is overemployment in a particular work.
8. What is statutory liquidity ratio ?
Answer:
Statutory liquidity ratio: The Indian Government term for the Reverse requirment that the commercial bank in indian are required to maintain in the form of cash gold reserved government approved securities before providing credit to the customer
9. Calculate median from the following data.
Marks: 15 20 25 30 35 40 No of Students: 65 87 45 35 15 45 Answer:
x f cf 15 35 35 20 87 122 25 15 137 30 45 182 35 65 247 40 45 292 292
M = \(N + 1 \over 2\) = \(292 + 1 \over 2\) = \(293 \over 2\) = 146.5 = 30 Answer10. Clculate coefficient of skewness by Karl-Pearson's methord from the following data;
Income 10 20 30 40 50 60 70 No of labourers 25 55 85 65 40 20 10 Answer:
x f dx=x-A fdx dx2 fdx2 10 25 -20 -500 400 10,000 20 55 -10 -550 100 5500 30 85 0 0 0 0 40 65 10 650 100 6500 50 40 20 800 400 16000 60 20 30 600 900 18000 70 10 40 400 1600 16000 300 1400 72000 \(\bar{x} = A+{\Sigma fdx\over N} => 30 + {40\over 300}\)
=> 30 + 4.667
\(\bar{x} => 34.667\)
Z = 30
\( = \sqrt{{{ \Sigma} fdx^2\over N } - ({{ \Sigma} fdx\over N})^2 }\)
\( = \sqrt{{ 7200\over 300 } - ({1400\over 300})^2 }\)
= \(\sqrt {240 - 21.77}\)
\(= \sqrt {2.23} = 1.493\)
skewness = \(\bar{x} - z\)
34.667 - 30 = 4.667
Coeff of sk = \({ \bar{x} - z\over \sigma} = {34.667 - 30\over 1.493} = {4.667 \over 1.493} = 3.125\)
34.667 - 30
11. Calcuclate index number by simple aggregative methord and simple aveage of price relative from the following data
Commodities Price 2012 Price 2015 A 345 370 B 310 340 C 415 460 D 380 420 E 240 270 Answer:
Comm P0 P1 A 345 370 B 310 340 C 415 460 D 380 420 E 240 270 1690 1860 P01 = \({EP_1 \over EP_0} * 100 = {1860 \over 1690 }*100 = 110. 059\)
12. Find regression equation Y on X from the following data.
X 8 4 10 7 6
Y 12 10 14 8 6
Answer:
X Y X2 Y2 XY 8 12 64 144 96 4 10 16 100 40 10 14 100 196 40 7 8 64 64 56 6 6 36 36 36 35 50 280 540 268 X on Y
X = a + bY
b = bXY = \(N\Sigma XY - \Sigma X \Sigma Y\over N \Sigma Y^2 - (\Sigma V)^2\)
bXY = \({5 * 268 - 35 * 50 \over 5*540 - (50)^2 } = {1340 - 1750 \over 2700 - 250} = {-410 \over 200} = -2.05 \)
a = \(\bar{x} - b\bar{y} = \bar{x} = {\Sigma x \over N} = {35\over 5} = 7 \)
\(\bar{Y} = {\Sigma Y \over N } = { 50 \over 5} = 10 \)
a = 7 - (2.05 * 10) = 7 - 20.5 = -13.5
Y on X
Y = a' + b'X
b' = bxy = \(N\Sigma XY - \Sigma X \Sigma Y\over N \Sigma X^2 - (\Sigma X)^2\)
= \({5 * 268 - 35 * 50 \over 5*280 - (35)^2 } = {1340 - 1750 \over 1400 - 1225} = {-410 \over 175} = -2.34 \)
a = 10- (-2.34 * 7)
= 10 + 16.38 = -6.38 Answer
13. Calculate from the following data:
(a) Gross national product at market price
(b) Net national product at market price
(i) Pgivate consumption expenditure = 2,40,000
(ii) Govt. consumption expenditure = 37,000
(iii) Gross capital formation = 14,500
(iv) Exports = 19,000
(v) Imports = 23,500
(vi) Net factor income from abroad = 750
(vii) Depreciation = 300
Answer:
GDPMP = Govt Cons exp + Private final consumption expenditure + fixed cap for + Increase in stock + Net Export
= 150 + 1200 + 250 + 40 + (-40)
= 1640 - 40 = 1600
NDPMP - GDPMP - Depreciation
= 1600 - 100 = 1500
14. what is average propensity to save ? Exprain with diagram
Answer:
Average Propensity to Consume = Saving function explain the relationship between saving and income in other word saving function depicts the level of saving at various level of income. It explain the saving level of income
Income Consumption Saving APS (Y) (C) S= Y- C APS = S/Y 50 40 10 10/50 = 0.2 100 60 40 40/100 = 0.4 15. Explain the contingency function of money.
Answer:
Contingent Function: The higher the level of economic development of the country, the more are the other function of money in the country the importance of these function of money increase with the increase in the rate of ecnomic development. David kinely has referred to these function of money as 'Contingent function'
16. What is difference between developmental and non developmental expenditure ?
Answer:
Development Expenditure : The expenditure incurred by Government which promotes economics development social welfare of the country is known as development expenditure
Non-Dvelopment Expenditure : The expenditure incurred by government to run the administration of country and to make transfer payments, is known as Non-Development Expenditure
17. What are the methods to rectify the disequilibrium of balance of payment ?
Answer:
Disquilibrium in BDP : There is Balance in Balance of payment when receipt and payment are equal to each other The difference between total recipt and total recipt and total payment i.e not balance is zero.
18. Calculate standard deviation and mean from the folrowing data.
Age 0-10 10-20 20-30 30-40 40-50 50-60 No of Students: 12 10 20 22 18 12 Answer:
CI f x fx x=(cx-x) x2 fx2 0-10 12 5 60 -26.382 695.90 8350.8 10-20 10 15 150 -16.382 268.36 268.36 20-30 20 25 500 -6.382 40.729 814.58 30-40 22 35 770 3.618 13.089 287.95 40-50 18 45 810 13.618 185.449 3338.08 50-60 12 55 660 23.618 557.80 6693.6 94 2950 22168.61 \(\bar{x} = {\Sigma fx \over \Sigma f} = {2950 \over 94} = 31.382\)
\(\sigma = {\sqrt \Sigma \over N } = { \sqrt 2216.61 \over 94 } = \sqrt { 235.83} = 15.35\)
Coeff of \(\sigma = {\sigma \over \bar{x}} = {15.35 \over 31.382 } = 0.489\)
Cv = \({\sigma \over \bar{x}} * 100 = {15.35 \over 31.382 * 100} = 48.95\)
19. How will you measure nationar income by expendifi,e method ?
or
what is deficit budget ? what are the measures to reduce the budget deficit ?
Answer:
Deficit Budget = If expeclec revenue of government is less then expected expenditure of government in a budget then such a budget is known as deficit budget
Measure to Countain defict = Government may borrow from the public of the country The loan taken by government from the public of the country is known as Market Loan
Measure to contain Revenue Deficit = Revenue can be increassed by increassing revenue receipt can increased by increasing either tax reciept or non-tax receipt or Both
Measure to Contain Fisal Deficit = Under such a policy, government borrow from central bank on the basis of government securities or treasury bills and thus bridges its fiscal deficit.
Measure to Contain Primary Deficit = Primary Deficit of government is an indicator of the need of government to borrow for its various function their interest payment on the loan taken in the past
Answer:
Comm P0 Q0 P1 Q1 P1Q0 P0Q0 P1Q1 P0Q1 A 12 72 14 84 1008 864 1176 1008 B 18 108 16 96 1728 1944 1536 1728 C 15 90 18 108 1628 1350 1944 1620 D 14 84 20 120 1680 1176 2400 1680 6044 5334 7056 6044 P01 = \(\Sigma \)P1Q0 * 100 / \(\Sigma \)P0Q0
P01 = 6044/5334 * 100 = 113.3
Fisher method =
P01 = \(\sqrt{{\Sigma P_1 Q_0 \over \Sigma P_0 Q_0 } * {\Sigma P_1 Q_1 \over \Sigma P_0 Q_1 } * 100}\)
= \(\sqrt{{6044 \over 5334} * {7056\over 6044 } * 100}\)
\(\sqrt {1.133 * 1.167 } *100\)
\(\sqrt {1.322 } *100\)
1.149 * 100 = 114.9 Answer