1) Illustrate that exponents of Cobb-Douglas production function are the measure of factor share in output as well as elasticity of output with respect to factor.
(b) In competitive banking environment, Bank Rate has lost its effectiveness to control credit? Do you agree with this view? Give suitable reasons for the answer.
(c) Recently, too much concern has been shown regarding size of fiscal deficit; what matters more is the reason for deficit rather than size. Describe it in detail.
(d) Describe the relationship between increasing foreign exchange reserves and money supply in detail.
2. Critically describe Mundell’s approach for effective use of monetary and fiscal policy to accomplish macro balances.
3. Describe Patinkin's approach to integrate Value theory and Monetary theory.
4. Write down the difference between effect and incidence of direct taxation. How do direct taxes affect production and savings in an economy.