Money- Banking and Finance

YEAR 2020

  1. Mention the classification of assets held by a commercial bank. Ok discuss the problems faced by commercial bank due to rise in NPAs.
  2. “Even green energy is not always green”, do you agree? Illustrate your answer taking biofuels as an example.
  3. What do you mean by tobin’s Q theory of investment? How would you modify the standard ISLM functions in the presence of tobin’s q?
  4. Explain how Keynesian speculative demand for money is restated in regressive expectation model. Point out its limitations.
  5. Discuss Different forms of subsidies. Explain how perverse subsidies are detrimental to the economy and environment in long run.

YEAR 2019

  1. In case of perfect capital mobility, explain the difference of the impact of an increase in money supply on GDP under two alternative exchange rate regimes – one fixed and the other flexible.
  2. Explain how money multiplier will be affected if there happens to be partial hoarding by public in each round as well as excess cash reserve holding by banks over the minimum required?
  3. In what sense is Friedman’s quantity theory said to be a restatement of Fisher’s theory? Explain.
  4. Automatic stabilizers are supposed to mitigate cyclic fluctuations, but there exist limitations which dampen the effect of these stabilizers. Analyze.
  5. Keynesian demand for money is one of the key concepts of Keynesian Theory of unemployment. Illustrate.
  6. What makes monetary policy ineffective even in the short run? Explain.

YEAR 2018

  1. What is high-powered money? Explain how changes in short- term monetary policy affect high-powered money and money multiplier.
  2. What is interest rate targeting? Explain using the concept of Taylor rule.
  3. In an open economy with high capital mobility, monetary management can be a successful tool to increase output. Explain.
  4. The burden of tax depends upon the elasticity of demand and supply of a commodity or service. Explain with suitable examples.

YEAR 2017

  1. Discuss briefly the circumstances where fiscal expansion leads to full crowding out.
  2. Demonetisation is expected to result in a fall in the ratio of currency to deposit. Using the monetary multiplier theory explain its possible impact on supply of money.
  3. Why do you expect high correlation between the money supply and aggregate expenditure? Does this resolve the monetarist-fiscalist debate?
  4. What is financial repression? Mention some of its consequences.
  5. “Transaction demand for money is not always interest rate inelastic.” Discuss.
  6. Distinguish between effective and differential tax incidence.
  7. Discuss the problem of intergenerational inequity arising out of internal public debt.

YEAR 2016

  1. Discuss in brief Friedman’s restatement of the quantity theory of money and find its similarity/difference with the classical quantity theory.
  2. Should inflation targeting be main plank of monetary policy of a central bank in emerging market economies like India? Show its implications on investment and growth.
  3. Illustrate the notion of perverse subsidy in the context of natural resource sector.
  4. Examine the effects of public expenditure on the development process of an economy.

YEAR 2015

  1. “If the interest elasticity of demand for money is low, the monetarists could predict the real GNP simply by the use of money supply.” Explain this statement.
  2. Explain repo rate and reverse repo rate. How do changes in the repo rate affect EMIs of borrowers?
  3. Derive money multiplier when a part of money supply is exogenous and the other part is endogenous.
  4. In the event of persistent inflation in an economy, what changes the Central Bank will bring about in
    1. reserve ratios,
    2. bank rate and
  • open market operations?
  1. “Subsidies have both positive and negative impacts on the economy.” Explain this statement and illustrate your answer with Indian experience.