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D192001 Pages:2

Explain the important features of oligopoly.
Draw a chart and explain the circular flow in a two sector model.
GDPmp of a country is Rs. 75000. If depreciation = Rs.5000, NFIA=Rs. 10000,
Indirect tax = Rs.15000 and Subsidy = Rs.5000. Estimate GNPmp, NDPfc and
national income. (411 figures in billions)
What are the four components of final expenditure in the economy?
Diagrammatically explain demand pull and cost push inflation. What are the
monetary and fiscal policy measures to control inflation?
PART C

Answer any four questions, each carries10 marks.
The annual cash flows from an investment project are Rs.10000, 9000, 8000,
7000 and 6000 from year 1 to 5. The initial investment is Rs.25000 and cost of
capital is 10%. Estimate BCR(profitability index) and payback.
A payoff matrix is given below. Which alternative will be selected according to
savage principle? (estimate regrets)

Possible future demand

Alternatives 8107 CO Medium 8101
Small facility 20 20 20
Medium facility 18 24 24
Large facility 6 8 28

What is a decision tree?

What is sensitivity analysis? What are its limitations?

How is decision taken under risk?

What are assets and liabilities in a balance sheet? Give 2 examples each.

Point out any two merits and demerits of a balance sheet

Distinguish between foreign direct investment and foreign portfolio investment.
What are the advantages and disadvantages of foreign direct investment?
Explain any three qualitative methods of demand forecasting.

Point out any four advantages and disadvantages of direct tax.

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