Class 12 Macro Economics - Chapter Money and Banking NCERT Solutions | What role of RBI is known as ‘lend

What is a barter system? What are its drawbacks?

What are the alternative definitions of money supply in India?

What are the main functions of money? How does money overcome the shortcomings of a barter system?

What is transaction demand for money? How is it related to the value of transactions over a specified period of time?

What is High Powered Money?

What is money multiplier? What determines the value of this multiplier?

What are the instruments of monetary policy of RBI?

Explain the functions of a commercial bank.

What is a ‘legal tender’? What is ‘fiat money’?

Do you consider a commercial bank ‘creator of money’ in the economy?

What is marginal propensity to consume? How is it related to marginal propensity to save?

Explain why public goods must be provided by the government.

Differentiate between balance of trade and current account balance.

What are the four factors of production and what are the remunerations to each of these called?

What is the difference between microeconomics and macroeconomics?

What is the difference between ex ante investment and ex post investment?

Distinguish between revenue expenditure and capital expenditure.

What are official reserve transactions? Explain their importance in the balance of payments.

Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.

What are the important features of a capitalist economy?

Explain why the tax multiplier is smaller in absolute value than the government expenditure multiplier.

What are the four factors of production and what are the remunerations to each of these called?

What is marginal propensity to consume? How is it related to marginal propensity to save?

Explain why public goods must be provided by the government.

Explain the relation between government deficit and government debt.

Would the central bank need to intervene in a managed floating system? Explain why.

Discuss the issue of deficit reduction.

Calculate the open economy multiplier with proportional taxes, T = tY, instead of lump-sum taxes as assumed in the text.

Why is the open economy autonomous expenditure multiplier smaller than the closed economy one?

What are official reserve transactions? Explain their importance in the balance of payments.