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TOTAL MARKS -6O
TIME - 2 HOURS
N.B.: - 1. Attempt any four questions from the following.
2. Figures to the right indicate full marks.
3. Draw neat and clear diagrams wherever necessary.
Q.I a) Explain the concept of 'Money supply'. Discuss its'
determinants. (O7)
b) Elucidate the different liquidity motives influencing
the demand for money. (08)
Q.2 a) Critically examine the cash transactions approach to
the determination of price level. (O8)
b) Bring out superiority of cash balances approach over
cash transactions approach. (O7)
Q.3 Critically examine liquidity preference theory of
rate of interest. (15)
Q.4 a) Discuss factors determining velocity of circulation
of Money. (08)
b) Explain briefly the four measures of money stock
used by Reserve Bank of India. (07)
Q.5 a) 'The power of commercial banks to create credit is not
unlimited' Discuss. (O8)
b) Discuss how commercial banks strike a balance between
(O7)
liquidity and profitability while arranging their assets.
Q.6 Explain various quantitative methods of credit control
generally adopted by
Central Bank of a country. (15)
Q.7 Define monetary policy. Critically examine its objectives.
(15)
Q.8 Write notes on (Any Two)
(15)
a) The cash balances approach to the quantity theory
of money.
b) Liquidity trap.
c) Functions of a Central Bank.
d) Limitations of a monetary policy.
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