ECO303 Assignment 1 Solution and Discussion


  • Cyberian's Gold

    SEMESTER FALL 2019
    PRINCIPLES OF MACROECONOMICS (ECO303)
    ASSIGNMENT
    DUE DATE: JANUARY 24, 2020 MARKS: 10
    The Case:
    Social protection schemes introduced by government are very helpful in reducing poverty and providing health facilities to the low income people. Government of Pakistan has introduced many schemes regarding transfer payments like Benazir Income Support Programme (BISP), Pakistan Poverty Alleviation Fund (PPAF) and Ehsaas Program etc. In current federal budget, amount for BISP is 180,000 million rupees while for Pakistan Poverty Alleviation Fund is 2,150 million rupees. Transfer payments are also helpful in reducing deflationary gap and increasing national income through multiplier effect. Due to increase in transfer payments, marginal propensity to consume (MPC) also increases.
    Requirement:
    (a) Suppose during year 2019, due to an increase in transfer payments, Marginal Propensity to Consume (MPC) increases from 0.55 to 0.60 then calculate transfer payments multiplier (KR).
    (b) By using the transfer payments multiplier (KR) value calculated in part (a), find the change in national income if transfer payment amount increases from 185 billion rupees to 210 billion rupees.
    © How increase in transfer payment amount will impact the aggregate demand curve?
    (Marking scheme: 04+04+02)

    IMPORTANT:
    24 hours extra / grace period after the due date is usually available to overcome uploading difficulties. This extra time should only be used to meet the emergencies and above mentioned due dates should always be treated as final to avoid any inconvenience.
    OTHER IMPORTANT INSTRUCTIONS: DEADLINE:
    Make sure to upload the solution file before the due date on VULMS.  Any submission made via email after the due date will not be accepted.
    FORMATTING GUIDELINES:
    Use the font style “Times New Roman” or “Arial” and font size “12”. It is advised to compose your document in MS-Word format.
    You may also compose your assignment in Open Office format. Use black and blue font colors only.
    RULES FOR MARKING
    Please note that your assignment will not be graded or graded as Zero (0), if: It is submitted after the due date.
    The file you uploaded does not open or is corrupt.
    It is in any format other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF etc.
    It is cheated or copied from other students, internet, books, journals etc. Note related to load shedding: Please be proactive
    Dear students!
    As you know that Post Mid‐Term semester activities have started and load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current

    semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.


  • Cyberian's Gold

    Assignment 1 Solution and Discussion



Quiz 100% Result Quiz 100% Result
| |