\(RealGDP=\frac { NominalGDP }{ PriceIndex } \times 100\)
\(200=\frac { NominalGDP }{ 110 } \times 100\)
\(NominalGDP=\frac { 200\times 110 }{ 100 } =\frac { 22000 }{ 100 } =Rs220\)

I = 50

Monetary policy is the policy relating to the regulation of supply of money, rate of interest and availability of money, with a view to combat situation of inflationary or deflationary gap in the economy. This policy is taken by the Central Bank of the country.
(i) Bank rate: It is the rate at which the Central Bank offers loan to the commercial banks as 'lender of last resort'. During inflation, bank rate is increases to reduce the money supply in the economy because commercial banks will also increase the interest rates accordingly. It will imply a check on the borrowing from commercial banks. Thus, overall supply of money/credit is reduced in the economy. During deflation, bank rate is lowered leading to increase in supply of money/credit.
(ii) Margin requirements. A margin refers to the difference between market value of the security offered for loan and the amount of loan offered by the commercial bank. During inflation, supply of money/credit is reduced by raising the requirement of margin and vice-versa.

(a) National Income (\({ NNP }_{ FC }\))
= Private Final Consumption Expenditure + Government Final Consumption Expenditure + Net Domestic Fixed Capital Formation + Change in Stock - Net Imports - Net Indirect Tax - Net Factor Income to Abroad
= 500 + 200 + 120 + (-20) - 30 - 100 - (-10)
=700 + 100 + 10 - 130
= Rs 680 crore
(b) Gross National Disposable Income
= \({ NNP }_{ FC }\) + Net Indirect Tax + Consumption of Fixed Capital - Net Current Transfer to the Rest of the World
=  680 + 100 + 20 - (-5) = Rs 805 crore

National Income = Domestic Income + Net Factor Income from Abroad = 1000 + (-10) = Rs 990 crore

(a)   Quantity demanded = 160 - 2p

Quantity supplied = -40 + 2p

Equlibrium is attained at a point where market demand is equal to market supply, i.e.

Quantity demanded = Quantity supplied

Hence,            \(160-2p=-4p+2p\\ 160+40=2p+2p\\ 200=4p,\quad p=\frac { 200 }{ 4 } =50\)

Hence, equilibrium price = Rs.50

Equilibrium quantity will be,

Quantity demanded = Quantity supplied

\(=160-20=160-2\times 50\\ =160-100=Rs.60\)

(b)  At any price below the equilibrium price, there will be excess demand.

Let us take at price Rs.20

At p = Rs.20

    \(Quantity\quad demanded\quad =160=-2p\\ \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad =160-2\times 20=160-40\\ \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad =Rs.120\\ Quantity\quad supplied\quad =\quad -40\quad +\quad 2p\\ \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad =\quad -40\quad +\quad 2\times 20\quad =\quad -40\quad +40\\ \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad =0\)

Quantity demanded

> Quantity supplied [ excess demand]

Also, it can be concluded that at Rs.20 there will be no supply of the commodity, hence between 20 < p < 50, there will be excess demand.

(c)  At any price above equilibrium, there will be excess supply.

Let us take at price Rs.80

\(Quantity\quad demanded\quad =160-2p\\ \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad =160-2\times 80=160-60\\ \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad =0\\ Quantity\quad supplied\quad =-40+2p\\ \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad =-40+2\times 80=-40+160\\ \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad =120\)

Quantity demanded

<Quantity supplied [excess supply]

Also, it can be concluded that at p=Rs.80 demand will be zero, hence there will be excess supply between 50 < p < 80.

This is true developing countries have supply constraints.Supply is limited due to underdeveloped technology, inadequate transportation and infrastructural facilities and scarce resources etc.Producers are willing to increase supply but do not have the resources do so.

The steps involved in the derivation of the saving curve from the consumption
curve are:
(i) We can find savings at different levels of income by taking the vertical distance between the CIS consumption curve (CC)and the 45° line.
(ii) At point B in the diagram income and consumption expenditure are equal Y = C, i.e., savings are zero.
(iii) To the left of point B, CC curve is higher than the 45° line, which denotes income. This implies savings are negative (or Dissaving)to the left of point B, in the diagram.
(iv) To the right of point B, CC curve is lower than the 45° line, this implies C < Y and savings are positive.
(v) By plotting the distance between the CC curve and 45° line at different levels of income just below the upper part we can derive the saving curve SS'. Since the CC curve is a straight line, the derived savings curve \(\rightarrow \) SS, must also be a straight line. For this we are required to locate only 2 points.
(a) Plot a perpendicular <-F)from point Bon the consumption curve, intersecting the OX axis, at point D, which must be on the OX axis, because savings is zero when Y = C.
(b) Plot as on the lower part of OY axis as equal to OC on the Y axis on the upper part. This gives us point S, from where the saving curve will start.
(vi) Joining points Sand Dand extending the straight line upwards we derive the savings curve SDS.

As per the Hicksian analysis, the given consumer attains equilibrium when the two conditions are fulfilled.
(i) MRS = MRE = P_X/P_Y
Slope of Indifference curve = Slope of the Budget line
(ii) MRSfallsas more is consumed of one good at the cost of another.
Showing the condition of equilibrium diagrammatically.
The given budget line AB is tangential to the indifference curve I₂ at point X in the given diagram.This is the consumers equilibrium.The utility maximizing combination of the two goods is OQ of good

(a) GDP_FC = NDP_FC - CFC
                = (i) + (ii) + (iv) + (vi) + CFC
                = 800 + 200 + 150 + 100 +50 = 1250 + 50
                = Rs 1300 crores
(b) Factor income to abroad = Factor Income from abroad - NFIA
                                         = 60 - (-20) = Rs 80 crores

(i) Product differentiation It is a distinct feature of monopolistic competition.A product is often differentiated by way of trademarks and brand names.The differentiated products are close substitutes of each other like colgate and closeup toothpaste.

Because of product differentiation, each firm can influence its price.So that, each firm has a partial control over price of its product.

(ii) Free entry or exit of firms Firms are free to enter the industry or leave it.However, new firms have no absolute freedom of entry into industry.Products of some firms may be legally patented.New firms cannot produce those products, e.g. no rival firm can produce or sell a patented item like woodland shoes.

The transactions carried by monetary authority of a country, which cause changes in official reserves, are termed as official reserve transactions (aRT). These transactions are carried through purchase or sale of currency in the exchange market for foreign currencies or other assets. The reserves are drawn by selling foreign currencies in exchange market during deficit and foreign currencies are purchased during surplus. When the official reserves increase or decrease, it is called overall balance of payments surplus or deficit respectively. Importance of ORT in balance of payments:
(a) Purchase of a country's own currency is a credit item in the balance of payments; whereas, sale of the currency is a debit item.
(b) It helps to adjust the deficit and surplus in balance of payments.

(i) Equilibrium price = RS. 5, Equilibrium quantity = 8 kg
(ii) Excess demand = 10 - 5 = 5 kg
(iii) Excess supply = 11 - 6 = 5 kg

The central problem of 'for whom to produce' is related with the distribution of goods that have been produced in the economy. National income earned from goods and services is the joint effort of all the factors of production. Distribution of national income among three factors can be done on the basis of contribution of an individual factor in the production of goods and services.
A factor which contributes more gets a higher share In the total output produced in the economy.

The law of variable proportions states that if we go on using more and more units of a variable factor (labour), keeping other inputs fixed, the total product increases at an increasing rate in the beginning, then increases at a diminishing rate and after a level of output, it ultimately falls. In accordance with law, the marginal product increases in the beginning, then it starts falling but remains positive and ultimately it continues to fall and becomes negative also. The following schedule and diagram illustrate the law:

The schedule and diagram show that there are three phases of law of variable proportion. In Phase I, MP rises till point M, in Phase II MP falls but remain positive till point \({L}_{1}\) . In phase III MP becomes negative i.e., after point  \({L}_{1}\)

Following are the three causes of a leftward shift of demand curve:
(i) Fall in the income of the consumer.The demand for normal good decreases with the fall in income. The demand curve for normal good shifts to  the left with the fall in the income of the consumer.
(ii) Fall in the price of substitute goods.The demand f?r a good falls with the fall in the price of its substitute good. As a result the demand curve for the commodity shifts to the left with the fall in the pnce of its substitute good.
(iii) Rise in the price of complementary good.The demand for a good falls with a rise in the price of its complementary good. As a result the demand curve for the commodity shifts to the left with a rise in the price of  its complementary good.

Rs 90 lakh

If LRR is 0.1,then deposit multiplier = Deposit multiplier = \(\frac { 1 }{ LRR } =\frac { 1 }{ 0.1 } =10\)