List of top Macroeconomics Questions asked in Indian Institute Of Technology Joint Admission Test for MSc

Using the following table,

Year	Population of the Economy	GDP of the Economy (in crore)
2010	20,000	25,000
2020	25,000	40,000

the average growth rate (compounded annually) of per capita GDP in an economy during the period 2010-2020 is ________ (in percent, round off to 2 decimal places).

Consider a Keynesian Cross Model with following features,
Consumption Function: C = C0 + b(Y-T) 
Tax Function: T = T0 + tY 
Income Identity: Y = C + I0 + G0 
Where, C = Consumption; Y = Real Income; T = Tax; I = Investment; 
G = Government Expenditure; b = Parameter; t = Tax Rate 
(The subscript 0 (zero) indicates that the concerned variable is autonomous) 
If b = 0.7 and t = 0.2, value of the Keynesian multiplier is ________ (round off to 2 decimal places).

GDP_F = Gross Domestic Product at Factor Cost; GDP_M = Gross Domestic Product at Market Price; NNP_F= Net National Product at Factor Cost; C = Consumption; I = Investment; G = Government Expenditure; X = Export; M = Import; T = Tax; S = Saving; D = Depreciation; NIA = Net Income from Abroad
Which of the following expressions is/are CORRECT?

Consider the following information:
Consumption (𝐶) = 250 + 0.25$𝑌_𝑑$, where $𝑌_𝑑$ is disposable income Autonomous Investment ($𝐼_0$) = 100
Government Expenditure ($𝐺_0$) = 50
Income tax rate (𝑡) = 20 percent
The equilibrium level of consumption in the economy is ____ (in integer).

The supply curve is given as $𝑝 = 10 + 𝑥 + 0.1𝑥^2$, where 𝑝 is the market price and 𝑥 is the quantity of goods supplied. The change in the producer surplus due to an increase in market price from 30 to 70 is ____. (rounded off to nearest integer).

Consider an economy where technology is characterised by the production function:
$Y = 50K^{0.4}L^{0.6}$
where, Y is output, K is capital, and L is labour.
Assuming perfect competition in the product market and in the factor markets, the share of total income paid to labour is equal to

Suppose expected inflation rate ($\pi^e_t$) of an individual is formed as:
$\pi^{e}_t = (1 − \theta) \overline{\pi} + \theta \pi_{𝑡−1}$
where, $\overline{\pi} $ is constant inflation rate, $\pi_{t−1}$ is previous year’s inflation rate, and $ 0 \leq \theta \leq 1$ is weight assigned to inflation rate at different points in time.
Then, which of the following is NOT CORRECT?

A firm has a production function that is homogenous of degree one given by $𝑄 = 2\sqrt{𝐿𝐾}$, where 𝑄 is quantity, 𝐿 is labour and 𝐾 is capital. The unit price of 𝐿 is Rs. 4 and the unit price of 𝐾 is Rs. 16. Assuming that there is zero fixed cost, the total cost (long run) of producing 10 units of 𝑄 is Rs. (in integer).

A manufacturer producing pens has the following information regarding the cost of production of pens:

Output (𝑄)	1	2	3
Total Costs (𝑇𝐶)	4	13	32

"If the total cost function is of the form $𝑇𝐶(𝑄) = 𝑎𝑄^2 + 𝑏𝑄 + 𝑐$ where 𝑎, 𝑏, and 𝑐 are constants, then the value of $𝑇𝐶(𝑄) at 𝑄 = 4$ is (in integer)."

Consider the production function:
$ Q(K, L) = (2 \sqrt {K} + 3 \sqrt{L})^2$ where Q is the output, K is capital, and L is labour. If $\eta_K$ and $\eta_L$ denote the output elasticities with respect to capital and labour, respectively, then the value of ($\eta_K$ + $\eta_L$) is

For a profit maximising monopolist, the ratio of the profit margin to price (also known as the Lerner Index or the relative mark-up) has a relationship with the price-elasticity of demand at the profit maximising price. Then, which of the following statements is CORRECT?

Suppose nominal GDP equals 1,000 units and money supply equals 250 units. Based on the quantity theory of money, the velocity of money equals

Consider a hypothetical economy where only apples and oranges are produced for three years:

	Apples		Oranges
Year	Quantity (Kg.)	Price (Rs. per Kg.)	Quantity (Kg.)	Price (Rs. per Kg.)
2015	10	180	5	200
2016	15	200	12	300
2017	18	250	15	350

Which of the following is/are CORRECT?

An economy produces a consumption good and also has a research sector which produces new ideas. Time is discrete and indexed by 𝑡 = 0, 1, 2, …
The production function for the consumption good is given by
$𝑌_𝑡 = 𝐴_𝑡 𝐿_{𝑦𝑡}$
where, at time 𝑡, $𝐿_{𝑦𝑡}$ is the amount of consumption good produced, 𝐴𝑡 is the stock of existing knowledge, and $𝐿_{𝑦𝑡}$ is the amount of labour devoted to production of consumption good. It is known that $𝐴_0 = 1$.
The production function for new ideas is given by
$ 𝐴_{𝑡+1} − 𝐴_𝑡 = \frac{1}{250} 𝐴_𝑡 $𝐿_{𝑎𝑡}$
where 𝐿𝑎𝑡 is the amount of labour devoted to production of new ideas at time 𝑡. Suppose that for all 𝑡, $𝐿_{a𝑡}$ = 10 and $𝐿_{𝑦𝑡}$ = 90. Then, the growth rate of the consumption good ($Y_{𝑡}$) at 𝑡 = 50 is _____ percent (in integer).

Consider a short-run Phillips curve with a constant expected rate of inflation. If the aggregate demand decreases unexpectedly and the labour force remains the same, then what will happen to aggregate price and unemployment rate?

Consider the information given in the table below:

Year	Unemployment Rate (in percent)	Number of unemployed (in millions)	Labour Force Participation Rate (in percent)
2010	15	30	70
2020	20	50	80

The percentage change in working-age population from 2010 to 2020 is __________ (rounded off to two decimal places).

Individuals who were either unemployed or out of labour force but had worked for at least 30 days over the reference year were included in the labour force by the NSSO in its labour force surveys. Under which one of the following classifications does the above procedure appear?

In the case of a small open economy with fixed exchange rate regime and imperfect capital mobility, which of the following is/are CORRECT?

Suppose the price elasticity of demand ($e_D $) is − 1/5 and the price elasticity of supply ($e_s$ ) is 2/5 . Then, the incidence of a specific (or unit) tax on the firms is equal to

Consider a closed economy IS-LM model. The goods and the money market equations are respectively given as follows:
$ 𝑌 = 90 + 0.8𝑌_𝑑 − 100𝑖 + 𝐺$
$𝑀_𝑠 = 750 + 0.2𝑌 − 260𝑖$
where, 𝑌 = national income; $𝑌_𝑑$ = disposable income; 𝑇 = total tax given by 𝑇 = 5 + 0.2𝑌; 𝑖 = interest rate; 𝐺 = government expenditure = 300; $ 𝑀_𝑠$ = constant money supply = 950.
The value of 𝑇 at equilibrium 𝑌 is _______. (rounded off to the nearest integer).

Let the production function be given by
$ Y_t = A_t K_t ^{\alpha} H_t ^{\beta} 𝐿_t^{1−\alpha−\beta}$
where, at time t, $Y_t$ is output, $A_t$ is level of Total Factor Productivity, $K_t$ is physical capital, H is human capital, and L is labour. $\alpha$ = 1/5 and $\beta$ = 2/5 If the growth rate of $Y_t$ equals 10 percent, the growth rate of $K_t$ equals 5 percent, the growth rate of $H_t$ equals 5 percent, and the growth rate of $L_t$ equals 10 percent, then the growth rate of $A_t$ is

Consider the following AK model where the production function is given by
$ 𝑌 = 𝐴𝐾$
where 𝑌 is output, 𝐾 is capital, and 𝐴 is a constant that reflects the level of technology. Suppose there is zero technological progress in the economy and 𝐴 = 0.50. In the economy, the savings rate equals 0.60 and the depreciation rate for the capital stock equals 0.05. The population growth rate equals zero and the size of the labour force is normalised to 1. Based on the AK model, the steady state growth rate of output per capita in the economy equals ______ percent (in integer).

Which of the following was announced in the Union Budget 2023-24 to enhance the skills of lakhs of youth in the next 3 years?

Which of the following measures was NOT initiated by the Government of India as a part of economic reforms in 1991?

Which of the following statements is/are CORRECT in the context of the Absolute Income Hypothesis?