vu cs401 Mid Term Subjective Solved Past Paper No.3
vu cs401 Computer Architecture and Assembly Language Programming Solved Past Papers
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Keynes introduced demand-pull theory which emphasizes strongly the intervention of government into economy.
According to him economy may be boosted up by increasing expenditure. In the initial stage government can inject money in the form of investment and higher wage rate to the government employees. This will create higher demand which in return result in more investment by firms.
Private Cost Of Advertising
The private cost of advertising is the cost incurred by firm in making the advertisement i.e newspaper adds, tv commercials etc. The firms do not take into account the nuisance faced by people due to these advertisements otherwise the firms would do less advertisement.
Marginal Social Cost
Marginal social cost is not a monetary based cost. It is the cost borne by the society as a whole. It is the cost of consumption of one next unit.
THE CURRENT ACCOUNT
The current account balance is essentially the trade balance (exports minus imports), but with net factor receipts from abroad added. If the exchange rate is fixed, then changes in reserves must mirror the combined balance on the current and capital accounts in order to bring the overall BOPs to zero. If the exchange rate is floating, then changes to reserves can remain zero, as the adjustment burden is borne by the exchange rate which appreciates (depreciates) in response to a joint surplus (deficit) on the current and capital accounts.
THE BALANCE OF PAYMENTS (BOP):
BOP is an accounting record of a country's transactions with the rest of the world.
The balance of payments (or BOP) measures the payments that flow between any individual country and all other countries. It is used to summarize all international economic transactions for that country during a specific time period, usually a year.
The BOP is determined by the country's exports and imports of goods, services, and financial capital, as well as financial transfers. It reflects all payments and liabilities to foreigners (debits) and all payments and obligations received from foreigners (credits).
Balance of payments is one of the major indicators of a country's status in international trade, with net capital outflow.
Fiscal Policy
Fiscal policy is the government's about the expenditure in form of purchases, subsidies and interest payments on debt etc. revenue in form of taxes etc.Difference between Contractionary and Expansionary Fiscal Policy
Contactionary Fiscal Policy Expansionary Fiscal PolicyIn conactionary fiscal policy government decreases its expenditure.
In expansionary fiscal policy government increases its expenditure.
Budget Deficit and Budget Surplus
Budget deficit exists if government expenditure increases the revenue earned. In this case government needs to finance its expenditure through borrowing. Budget surplus exists when revenue exceeds the government expenditure. In this condition government can easily pay off its debt borrowings.What are the factors which cause the shift in market supply curve?
LAW OF SUPPLY
It states that as the price goes up the quantity supplied also goes up and when price falls quantity supplied also falls.
Schedule for Supply
| Price (Rs.) Quantity supplied | |
| 5 | 100 |
| 4 | 95 |
| 3 | 80 |
| 2 | 60 |
| 1 | 40 |
Factors Causing Shift in Supply Curve
There are various factors causing shift in market supply curve which are as follows:Factors Effect on Direction of Equilibrium Equilibrium changing supply Shift in supply Price quantity
