Q15 of 38 Page 1

Define autonomous transactions in Balance of Payments of an economy.

OR


Define accommodating transactions in Balance of Payments of an economy.


Autonomous transactions in Balance of payments of an economy are those transactions which are undertaken for some economic motive.

OR


Accommodating transactions in Balance of Payments of an economy are those transactions that are undertaken to cover any gap existing in the balance of payments.


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13

According to a report forwarded by the Reserve Bank of India, there was a fall in the rate of inflation as measured by the Consumer Price Index (CPI) on a year-on-year basis to 5% from 8% in the previous year. Which of the following statements represents the situation?

 14

Name any two sources of demand for foreign exchange by households in an economy.

 16

Define the term ‘‘Involuntary Unemployment’’.

 17

If Marginal Propensity to Save is 20% and is constant at all levels of income and the autonomous consumption is Rs. 100 crores, construct a consumption function of the given hypothetical economy.