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Nilanjan Bhowmick AIR 3, CSIR NET (Earth Science)
- UGC NET
- Economics
The combination of a successful wage push by warkers and the government's commitment to high employment leads to (2 demand pull inlation (2) supply side inflati
The combination of a successful wage push by warkers and the government's commitment to high employment leads to (2 Demand Pull Inlation (2) Supply Side Inflation (4) Cost-Push Inflation 3) Supply Shock Inflation (2) T T 1) (1) (3) gf 3TTET f 48. Suppose that the MPC = 0.B, tax revenues equal 25% of income and imports do not depend on income. How much would equilibrium output increase due to a 5 crore increase in govermment spending according to multiplier model ? (1)7.5 crore 25 crore (2) 12.5 crorec (3) (4 None of the above
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Nidhi taparia
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48. The correct answer is (2) 12.5 crore. This is the case of finding government expenditure multiplier in case of proportionate tax. Please refer to the following attachment for the solution.
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Hi ma'am I have a question regarding this solution how did we get delta Y and delta G
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Nidhi taparia
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47. The correct answer is (4). These events will lead to cost push inflation. If workers push for high wages, their demand by the firms may fall; because demand curve of labour is negatively sloped. But the government is pushing for high employment. Hence it may put restrictions on firms to not make their employees jobless. In that case high wages means high costs, because wages form a part of the firm's costs. Hence this will lead to cost push inflation.
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Nidhi taparia
I have used the most common symbols for variables, above. In case they are not clear, let me know which one. I'll explain accordingly.