Economics Paper I Past Paper 2011

Every question in the Economics Paper I past paper 2011 splits into two parts, and the marks split with it. Q.2 explains consumer equilibrium through the cardinal and ordinal approaches and asks which approach serves better. Q.3 sets perfect competition against pure competition and asks for equilibrium in one of those markets. Q.4 builds short-run and long-run equilibrium and asks why the short-run aggregate supply curve runs horizontal. Q.5 breaks down the aggregate demand equation and traces a rise in net exports. Q.6 lists the reasons for money demand and builds money-market equilibrium. Q.7 defines inflation and asks how hyperinflation starts and how it can be cured. Q.8 closes with the goals of the World Bank and similar bodies and asks how many of those goals stand achieved. The file on this page holds both parts of the paper, the MCQ sheet and the Part-II sheet.

What this paper contains

  • This file carries both parts of the paper: the Part-I MCQ sheet and the Part-II sheet.
  • Part-I (Q.1) — 20 MCQs on the separate Answer Sheet (20 marks)
  • Part-II — attempt any FOUR questions from Q.2–Q.8; each question carries 20 marks

Part-II questions

Q.2 — (a) Explain consumer equilibrium by utilizing Cardinal and Ordinal Approaches. (15)
(b) Which approach is better to establish consumer equilibrium and why? (05) (20)

Q.3 — (a) Explain the difference between Perfect and Pure Competition. (05)
(b) Establish equilibrium under any one markets, you have explained under (a) above. (15) (20)

Q.4 — (a) Establish and explain equilibrium of the economy in the short run and long run. Why short run Aggregate Supply curve is horizontal. (15)
(b) Briefly explain major factors which alter the slope of Aggregate Supply Curve. (05) (20)

Q.5 — (a) Briefly explain major components of Aggregate Demand equation (function) and also explain the role of planned and real (effective) aggregate demand. (15)
(b) Besides, explain how an increase in net exports may change equilibrium of the economy. Discuss its impacts. (05) (20)

Q.6 — (a) Briefly point out major reasons for money demand. How an equilibrium in the money market is established. (15)
(b) Show an impact of an increase in prices on money supply and in money market. (05) (20)

Q.7 — (a) Briefly explain major definitions of inflation. (05)
(b) How there could be hyper inflation and propose its remedial measures. (15) (20)

Q.8 — (a) Explain major goals of International Monetary Institutions like World Bank. (10)
(b) Discuss with proof whether and how many such goals, you discussed under (a) above are achieved. (10) (20)

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