M.B.A.

Business Applications - Year 2 – Economics for Managers

Internal Examination - I

Total Marks: 25 Max Time: 60 min

There are 3 sections to this Question Paper:

• Section A: Objective Type – Fill the Answers in the Question Paper.
• Section B: Short Answer – Fill the Answers in the Question Paper.
• Section C: Long Answer – Attach Additional Sheets.

Instructions
• Read the instructions for each before attempting to answer them
• Test need to be completed in the time given

Section A: Objective Type – Answer All Questions Total Questions: 10

Each Question carries 1 mark each.

A. Fill in the blanks:

1. _____________________ is a term used to describe how different aspects

between economies are integrated.
Ans: _____________________

2. In economics, PPF stands for _____________

Ans : _____________________

3.In economics, ______________ can refer to any kind of predatory pricing.

Ans : _____________________

4. The interest rate parity is the basic identity that relates interest rates and
______________________rates.
Ans : _____________________

5. _____________________ compensation refers to non-monetary benefits offered

and provided to employees in lieu of the services provided by them to the
organization.
Ans : _____________________

B. State TRUE or FALSE:

6. The real interest rate is the nominal interest rate plus the inflation rate
Ans: _____________________

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 7. The balance of payments (or BOP) measures the payments that flow between
any individual country and all other countries
Ans: _____________________

8. Gross domestic product (GDP) is defined as the "value of all goods and
services produced in a country in one year
Ans : _____________________

9. Current Account = Capital Account _ Financial Account + Net Errors and

Omissions
Ans: _____________________

10. Merger arbitrage is also called risk arbitrage.

Ans: _____________________

Section B: Short Answer – Answer Any Three Questions Total Questions: 5

Each Question carries 3 marks each

1. What are the three conditions of arbitrage?

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2. Write a short note on Purchasing Power Parity.
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3. What is Fair Trade?

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 _______________________________________________________________________
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4. Discuss Interest Rate Parity.
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5. Write a short note on Fiscal Policy
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Section C: Long Answer – Answer Any One Question Total Questions: 3

Each Question carries 6 marks

1. Describe in detail the Fair Trade Principles

2. Describe in detail about the different types of arbitrage
3. Discuss the non monetary compensation for workers.

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