Economics, Paper I

The major economic problem in a society is not the volume of Production from scarce resources but rather how the resulting Products are distributed among the consumers in a society. Discuss?

In any economic system decision regarding how to allocate scarce resources among competing uses is performed with help of price mechanism? How will you determine the ability of an economy to reach a rational decision.

Equilibrium level of National income is at the point of effective demand. Higher the level of effective demand, higher will be the level of income and employment in the economy. Taking leakages and injection approach when C+I > C+S, when C+I = C+S, and when C+I < C+S. Demonstrate your answer diagrammatically.

Liquidity preference theory is the Keynesian view why people want to hold liquid funds. State the motives in support of the liquidity preference in an Economy. How will you describe supply of money and distinguish between Narrow money and Broad money.

The managers of the exchequer explained the economic policies in term of driving cars. Maintaining a correct relationship between the pressure of demand and the capacity of the economy to meet the demand, the govt. is supposed to touch the accelerator (reduce taxes), to touch the brakes (increase taxes) if demand was running fast. What just system you can propose to deal with the situation. Suggest the constraints you will face.

To join hands with the communities of nations Pakistan trading advantage can only be in least cost combination and constantly improving quality of its products. Agriculture sector must be industrialized as much as possible with effective land reform. Comment?

State the aims of International Monetary Fund and give its principal functions. Do you think that the prescriptions suggested by the IMF benefit the developing countries more or deprive them of the existing facilities?