MBA

GLOBAL ACADEMY OF TECHNOLOGY DEPARTMENT OF MANAGEMENT STUDIES I INTERNAL ASSESSMENT TEST 2nd SEMESTER MBA ECONOMICS ENVIRONMENT (05MBA 22) Duration: 1 hr. 15 Mts. Answer Any Two Questions 1. a) What do you mean by environmental scanning? Name the objectives of Environmental scanning. (3 Marks) b) Briefly explain the Nature of Modern business with examples (7 Marks) c) Explain in detail how socio-cultural environment affects business. (10 Marks) 2. a) What do you mean by Industrial Policy. (3 Marks) b) Briefly explain the salient features of the New Industrial Policy of 1991. 7 Marks) c) Briefly explain the salient features of Exim Policy 2002-07. (10 Marks) 3. a) What is Direct Tax & Indirect Tax. (3 Marks) b) What is monetary Policy? What are the objectives of monetary policy? (7 Marks) c) What are the credit control tools used by the Central Bank of our country in order to regulate credit in the economy? (10 Marks) 4. a) What is Fiscal Policy? (3 Marks) b) Bring out Rajachellaiah Committee Recommendations on Taxation. (7 Marks) c) Discuss Micro environmental factors in External Environment of Business. (10 Marks) Max. Marks: 40

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MBA
GLOBAL ACADEMY OF TECHNOLOGY DEPARTMENT OF MANAGEMENT STUDIES 2ND INTERNAL ASSESSMENT TEST 2nd SEMESTER MBA ECONOMICS ENVIRONMENT (05MBA 22) Duration: 1 hr. 15 Mts. Answer Any Two Questions 1. a) Differentiate between economic growth & economic development. b) What are the important measures to control inflation? c) Discuss the major issues of development in India. 2. a) Define National income? What are the different concepts of national income? b) What are the objectives of Public sector under planning . c) Why Strategy for long term plan for development of industries spelt under various five year plans? 3. a) What is Inflation? Name the types of inflation. b) What are the reasons for the growth of MNCs c) Briefly explain the four phases of Business cycle. 4. a) Define Price indices. What are the types of Price Indices? b) What are the Important measures undertaken by the GOI to promote small scale and cottage industries in the planning period? c) What are the difficulties in measuring National income. (3 M) (7 M) (10 M) (3 M) (7 M) (10M) (3 M) (7 M) (10 M) (3 M) (7 M) (10 M) Max. Marks: 40

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1(a)Economic growth- refers to increases over time in a countrys real output of goods and service or more appropriately product per capita. The term Eco.development refers to the progressive changes in the socio-economic structure of a country. It involves a steady decline in agriculture share in GDP & a corresponding increase in the share of industries, banking, trade, construction, services. This change in economic structure is invariably accompanies by a shift in the occupational structure of the labor force. 1(b) DIRECT MEASURES control on prices and rationing of scarce goods. Ceiling on certain goods and should not allow to it to rise further. 2. FISCAL MEASURES: refers to the policies of the Govt. in relation to PE & PB & TAXATION. An increase in Govts revenue and decrease in its expenditure can successfully check inflationary pressures.in the economy 3. MONETARY MEASURES: RBI Open market operations, & Bank rate policy 4. OTHER MEASURES: diverting funds only towards production of necessary commodities, instead of luxury items. Exports can be increased and imports restrictions can be relaxed. Govt. try to restrict the growth rate of population increase production levels in the economy 1(c )The following are the major development issues in India. 1. 2. 3. 4. 5. 6. 7. Low percapita income High proportion of people below the poverty line. Low level of productive efficiency due to inadequate nutrition and malnutrition. Imbalance between population size, resources and capital. Problem of unemployment Instability of output of agriculture and related sectors. Imbalance in distribution and growing inequalities.

2.(a) National Income is the money value of all goods and services produced in a country during a year. There are five concepts of National Income: 1. Gross National Product 2. Net National Product 3. National Income 4. Personal Income 5. Disposal Income 2(b)Public sector engine for self reliant economic growth OBJECTIVES OF PUBLIC SECTOR UNDER PLANNING Creation of infrastructure Generate financial resources for development Create employment opportunities Promote balanced regional growth Encourage the SSI and ancillary industries. To promote export on one side and import substitution on the other Strong industrial base

2( c) Strategy for long term plan for development of industries spelt under various five year plans. Country was industrially backward Productivity of labour is the highest in mfrg. Industries Pressure of population on land is excessive Inustralisation induces development in other sectors. Industry create demand for agriculture goods Ex: cotton, fertilizers, insecticides & farm implements 3(a)Inflation refers to a situation when there is a general rise in prices and a corresponding fall in value of moneyCreeping inflation Price Rise by 2% -PA not controlled in time prove disastrous economic & political stability of the economy Walking inflation mild & tolerable expectations remain more or less stable. > 10% PA moderate stable inflation- people

Running inflation rises rapidly < 10% ranges 10-20%-exceeds Galloping inflation. Causes economic distortions and disturbances in the economy. Hyper inflation: 1000% PA . Low purchasing power, real wages fall and inequalities increases serious distortions overall economic condition. 3(b) REASONS FOR THE GROWTH OF MNCS Expansion of market Marketing superiorities Financial superiorities Technological superiorities Product innovation 3(c) A business cycle can be defined as wavelike fluctuations of business activity characterized by recurring phases of expansion and contraction in periods varying from three to four years. Prosperity upswing, expansion phase. Recession a turn from prosperity to depression Depression contraction or downswing Recovery turn from depression to prosperity

4(a) The numerical value that summarizes price level is called price indices. The purpose Of PI h Types of Price Indices: 1. Wholesale price Index (WPI) 2. Consumer Price Index (CPI) It helps in explaining the purchasing power of inflation/Deflation from one period to another.

4(b) What are the Important measures undertaken by the GOI to promote small scale and cottage industries in the planning period? 1. No. of items reserved for SSI has been increased. 2. Procedures and conditions of financial assistance from commercial banks and other institutions have been liberalized. 3. SIDO- Small Industries Development Organization through its network of service and branch institutes. Provides consultancy services, technical, managerial & marketing assistance. 4. The Small enterprise policy 1991 Ceiling of investment in the case of tiny enterprises was raised to Rs. 5 lakh from Rs. 2 lakh . 5.Modernization and technological up gradation were encouraged. scheduled banks to ensure appropriate credit facilities to SSI 4(c ) Measurement of national income is not an easy task. Difficulty in defining the Nation NI includes not only the income produced within the country, but also income earned in other countries. Non availability of a data about the income of small producers or household enterprises. The error of double counting- failure to differentiate final and intermediate goods. Unpaid services: services performed for love, kindness and mercy and not for money have no money value But have only economic value. These are excluded from NI figures and leads to the under estimation of the NI. Individuals do not keep correct account of their consumption. Illiteracy and ignorance. Lack of proper criteria for measuring the value of services The services of housewives is not included in the NI because is not sold in the market. Income for illegal activities: black marketing, gambling, smuggling etc., not included in the national income thus reducing the real value of the national income. The out put of non monetised setor: India- agriculture based - considerable portion of the out put does not come to the market for sale. The non co-operation of the people: Major part of the population are illiterate and hence may not co-operate in providing the information is needed for the estimation of NI.

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