(oe ee [ome [orz009 | [aes ] Pd svkM's NMIMS UNIVERSITY, BANGALORE, MANAGEMENT PROGRAM FOR EXECUTIVES (MPE) BATCH 07 ‘TRIMESTER 2 FINAL EXAMINATION Course + Business Marks :30 Date: 12/07/2009 Time: 80m INSTRUCTIONS: Section A: 10 Marks Section B: 20 Marks (answer any two) Total: 30 Marks SECTION -B Note: > Answer any of two of the questions > Unclear and undecipherable writing attract deduction in marks > Best two answers will be chosen for evaluation Each question carries 10 marks 1. Suppose, in an economy Marginal Propensity to Consume is 0.75. Further suppose there was change in Investment from 50 million USD to 100 million USD. Using Keynesian Two Sector model suggest what would be the change in Aggregate Income level. If Marginal Propensity to Consume reduces to 0.5, what would be the change in Aggregate Income level? 2. From the data given below compute the GDP at market price as well as at factor cost. Also compute the National Income. (Rupees Million) Indirect taxes 8800. Mixed income of the self employed | 28,000 Subsidies 1100 Operating Surplus 9600 Consumption of fixed capital 4200 Net factor income eared from abroad | (-)250 ‘Compensation of employees 24,000, 1. Find the value of Laspeyre's and Paasche's Indices from the illustration below: Period Paddy Cloth House Price [Quantity | Price [Quantity [Price | Quanity Base Year [25 [6500 | 170 [500 2500 [425 Current Year [30 [9000 | 200_ | 750 3400 | 182 Argue, why Laspeyre’s Index is better than Paasche’s or vice versa for measuring inflation. Jeet ‘TRIMESTER IL ' pro