Economics Quiz For Entrepreneurs

ECONOMICS QUIZ FOR
ENTREPRENEURS
by :
DR. T.K. JAIN
AFTERSCHO☺OL
centre for social entrepreneurship
sivakamu veterinary hospital road
bikaner 334001 rajasthan, india
FOR – CSE & PGPSE STUDENTS
(CSE & PGPSE are free online programmes
open for all, free for all)
mobile : 91+9414430763
5 DECEMBER 09 www.afterschool.tk 1
My word.....
My purpose here is to give a few data and ideas to

budding entrepeneurs. Be entrepreneur, change the
society, change the world. Go with positive spirit. Please
pass this presentation to all those who might need it. Let
us spread knowledge as widely as possible. I welcome
your suggestions. I also request you to help me in
spreading social entrepreneurship across the globe – for
which I need support of you people – not of any VIP.
With your help, I can spread the ideas – for which we
stand....
What is the contribution of
Keynes?
John Maynard Keynes, 1st Baron Keynes( 5
June 1883 – 21 April 1946) was a British
economist whose ideas have profoundly
affected modern macroeconomics, both in
theory and in practice. He advocated the use by
governments of fiscal and monetary measures
to mitigate the adverse effects of business
cycles, economic recessions, and depressions.
How was Keyenes different from
neo-classical economics?
neoclassical economics held that free markets
would automatically provide full employment
as long as workers were flexible in their wage
demands.
But Keynes argued that aggregate demand
determined the overall level of economic
activity, and that inadequate aggregate demand
could lead to prolonged periods of high
unemployment.
Who is the father of modern
macroeconomics?
Keynes is considered the father of modern

macroeconomics
What is neoclassical synthesis ?
Neoclassical synthesis was a postwar academic

movement in economics that attempted to
absorb the macroeconomic thought of John
Maynard Keynes into the thought of
neoclassical economics.
Who started neoclassical synthesis
?
The theory was developed by John Hicks, and

popularized by the mathematical economist
Paul Samuelson, who coined the term
What is the main idea in modern
economics ?
Scarcity
What is the main idea in
neoclassical economics ?
Welfare
What is the main idea in classical
economics ?
Wealth
What is opportunity cost ?
Opportunity cost is the next-best choice

available to someone who has picked between
several mutually exclusive choices. It is a key
concept in economics.
What is quantity theory of
money ?
money supply has a direct, positive

relationship with the price level.
What is the relation between
money and price in short term?
mainstream economists agree that the quantity

theory holds true in the long-run, there is still
disagreement about its applicability in the
short-run. Critics of the theory argue that
money velocity is not stable and, in the short-
run, prices are sticky, so the direct relationship
between money supply and price level does not
hold.
Was Keynes in favour of money-
price relationship?
No
Were monetarists in favour of
money-price relationship?
Yes
What are the formula regarding
money-price ?
MV = PT or PT
M = Money
M is the total amount of money in circulation on average in an

economy during the period, say a year.
V is the velocity of money in final expenditures.
Q is an index of the real value of final expenditures.
P is the price level associated with transactions for the economy
during the period
T is an index of the real value of aggregate transactions.
What is Cambridge theory of
money ?
M= KPY
A certain portion of the money supply will not
be used for transactions; instead, it will be held
for the convenience and security it is denoted
by K
Y=income
What are the principles of money
theory ?
1. The source of inflation is fundamentally derived from the
growth rate of the money supply.
2. The supply of money is exogenous.
3. The demand for money, as reflected in its velocity, is a stable
function of nominal income, interest rates
4. The mechanism for injecting money into the economy is not that
important in the long run.
5. The real interest rate is determined by non-monetary factors:
(productivity of capital, time preference).
What does macroeconomics
study?
Macroeconomists study aggregated indicators
such as GDP, unemployment rates, and price
indices to understand how the whole economy
functions. Macroeconomists develop models
that explain the relationship between such
factors as national income, output,
consumption, unemployment, inflation,
savings, investment, international trade and
international finance.
When was macroeconomics word
used for first time?
The term "macroeconomics" stems from a similar usage of the term

"macrosystem" by the Norwegian economist Ragnar Frisch in 1933.
Swedish economist Knut Wicksell founded modern macroeconomics
What are 3 major schools of
macroeconomics?
•Keynesian economics, focusing on demand;

•neoclassical economics based on rational
expectations and efficient markets, and
•innovation economics focused on long-run
growth through innovation
What is the key idea in Keynes
economics?
They challenge the ability of markets to be

completely efficient generally arguing that
prices and wages do not adjust well to
economic shocks.
What did Keynes suggest?
business cycle fluctuations should be reduced

through fiscal policy (the government spends
more or less depending on the situation) and
monetary policy.It called for regular use of
policy to stabilize the capitalist economy,
while some Keynesians called for government
interventions.
What is the idea of post Keynes
thinkers?
It is on the importance of demand in the long

run as well as the short, and the role of
uncertainty, liquidity preference and the
historical process in macroeconomics.
What was the basic difference in
Keynes and Classical theories?
Keynesians= studying macroeconomics

classical economists = microeconomics.
What is the basic idea of
monetarism?
Monetarism, led by Milton Friedman, holds

that inflation is always and everywhere a
monetary phenomenon. It rejects fiscal policy
Further, it does not wish to combat inflation or
deflation by means of active demand
management as in Keynesian economics, but
by means of monetary policy rules
What is neoclassical theory ?
increased focus on monetary policy, such as

interest rates and money supply. This school
emerged during the 1970s with the Lucas
critique.
What is the area of India ?
2.4% of the world.

but it has 16.6% population of the world
What is the share or urban
population in total population in
India?
28% of total population
Urban population is growing at a faster rate

it grew at >30% in the last decate as compared
to only 18% growth in rural population.
What is population density of
India?
325 persons per square km

(it was only about 100 persons per sq. km).
What is the sex ratio in India?
933 females as against 1000 males.
What is literacy rate of India ?
64.8%
75.26 % for males
53.67% for females
What is the reason for population
explosion in our country?
Illiteracy
social customs
stable birth rate, but falling death rate (death
rate has fallen from 27 to 8 per thousand in 5
decades)
What % of population conststitue
workers?
30% only
What is life expectancy at birth in
India?
For males : 64 years

for females : 67 years
What is the current birth rate in
India?
25 per thousands
(it has fallen from 40 CBR to 25 CBR)
CBR = crude birth rate
What was the suggestions of
Bhagwati Committee report to
govt. Of India? (in 1973)
To start rural work programmes

to assist marginal and poor farmers by
providing support in animal husbandary and by
starting rural development programmes
to start civil work of permanent nature to give
employment to poor people
What is the number of
umemployed persons in India
now?
3 Crore people
What is the status of nutrition in
India?
Maternal mortality rate of 100 per 100000 and

infant mortality rate of 70 per 1000 birth
indicate very poor conditions of health care,
nutrition, & maternity care
What is the fertility rate in India?
TFR (total fertility rate ) in India is about 30

per thousand. Thus it shows that we have a
very high growth rate in population even now.
What is GDP growth rate in
India?
8% approximately
What are the targets of XI plan ?
* Accelerate GDP growth from 8% to

10% and then maintain at 10% in the 12th Plan
in order to double per capita income by 2016-
17
* Increase agricultural GDP growth rate
to 4% per year to ensure a broader spread of
benefits
contd...
* Create 70 million new work opportunities.

(there are 30 million umemployed now)
* Connect every village by telephone by
November 2007 and provide broadband
connectivity to all villages by 2012
contd..
* Provide homestead sites to all by 2012 and
step up the pace of house construction for rural
poor to cover all the poor by 2016-17
* Increase forest and tree cover by 5
percentage points.
* Attain WHO standards of air quality in
all major cities by 2011-12.
Targets of XI plan
* Treat all urban waste water by 2011-12 to

clean river waters.
* Increase energy efficiency by 20
percentage points by 2016-17.
Targets of XI plan
* Increase literacy rate for persons of age 7

years or above to 85%
* Improve nutrition level among women
and children, Reduce anaemia among women
and girls by 50% by the end of the plan
Targets of XI plan
* Raise the sex ratio for age group 0-6 to 935
(from 927 now) by 2011-12 and to 950 by
2016-17
* Ensure that at least 33 percent of the
direct and indirect beneficiaries of all
government schemes are women and girl
children
* Ensure that all children enjoy a safe
childhood, without any compulsion to work
Targets of XI plan
* Lower gender gap in literacy to 10

percentage point
* Increase the percentage of each cohort
going to higher education from the present
10% to 15% by the end of the plan
Targets of XI plan
* Reduce infant mortality rate to 28 and

maternal mortality ratio to less than 1 per 1000
live births
* Reduce Total Fertility Rate to 2.1
(from 3.3 now)
* Provide clean drinking water for all by
2009
* Reduce malnutrition among chil
How to achieve better rural
development ?
Improve the working of PRI (panchayat raj

institutions)
remove corruptions (which is spreading in
villages due to rural development programmes)
improve transparency and public accountability
in rural development work
How to improve PRI?
Better training
Women participation (33% is reserved for
women, but it is only for the sake of formality).
Better participation of villages in PRIs
identification of village issues by people
through collective participation
better land records
How to improve industrialisation?
Give freedom to private sector and enable them
to achieve their objectives
If we can have reduced ICOR (incremental
capital output ratio)(ICOR now is 3.5) – we
will be able to have better industrial growth -
which will be possible with improved
technology, reduced bottlenecks, improved
infrastructure and support institutions and
improved access to market
How can FDI increase in India?
FDI in 2008-9 was about 4 lakh Crore Rupees

or 90 billion $.
reduce government restrictions regarding FDI
improve business confidence to improve FDI.
Download more resources
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http://www.esnips.com/web/entrepreneurship-article
http://www.esnips.com/web/ONLINESPEECH
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ECONOMICS QUIZ FOR

My purpose here is to give a few data and ideas to

Keynes is considered the father of modern

Neoclassical synthesis was a postwar academic

The theory was developed by John Hicks, and

Opportunity cost is the next-best choice

money supply has a direct, positive

mainstream economists agree that the quantity

M is the total amount of money in circulation on average in an

The term "macroeconomics" stems from a similar usage of the term

•Keynesian economics, focusing on demand;

They challenge the ability of markets to be

business cycle fluctuations should be reduced

It is on the importance of demand in the long

Keynesians= studying macroeconomics

Monetarism, led by Milton Friedman, holds

increased focus on monetary policy, such as

2.4% of the world.

28% of total population

Urban population is growing at a faster rate

325 persons per square km

933 females as against 1000 males.

For males : 64 years

To start rural work programmes

Maternal mortality rate of 100 per 100000 and

TFR (total fertility rate ) in India is about 30

* Accelerate GDP growth from 8% to

* Create 70 million new work opportunities.

* Treat all urban waste water by 2011-12 to

* Increase literacy rate for persons of age 7

* Lower gender gap in literacy to 10

* Reduce infant mortality rate to 28 and

Improve the working of PRI (panchayat raj

FDI in 2008-9 was about 4 lakh Crore Rupees

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