Question 1 (20 marks)

The following events have occurred globally in recent years:
A deep recession hits the world economy.
The world oil price rises sharply.

Do you think the economy can be rescued if the Keynesian policy is followed? Explain your arguments.

Question 2 (20 marks)

Poor India Makes Millionaires at Fastest Pace
India, with the world’s largest population of poor people living on less than a dollar a day, also paradoxically created millionaires at the fastest pace in the world in 2007. … Growing them at a blistering pace of 22.7 per cent, India added another 23,000 more millionaires in 2007 to its 2006 tally of 100,000 millionaires measured in dollars. … In contrast, developmental agencies put the number of subsistence level Indians living on less than a dollar a day at 350 million and those living on less than $2 a day at 700 million. In other words, for every millionaire, India has about 7,000 impoverished people. …
(The Times of India, June 25, 2008)

Following the limitations of real GDP estimation and particularly estimation problems associated with across countries examine the validity of this statement.

ted with across countries examine the validity of this statement.

globally in recent years:
A deep recession hits the world economy.
The world oil price rises sharply.

Do you think the economy can be rescued if the Keynesian policy is followed? Explain your arguments.

Question 2 (20 marks)

Poor India Makes Millionaires at Fastest Pace
India, with the world’s largest population of poor people living on less than a dollar a day, also paradoxically created millionaires at the fastest pace in the world in 2007. … Growing them at a blistering pace of 22.7 per cent, India added another 23,000 more millionaires in 2007 to its 2006 tally of 100,000 millionaires measured in dollars. … In contrast, developmental agencies put the number of subsistence level…