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ECONOMICS – Daily Answer Writing Challenge, 04 July 2014

ECONOMICS – Daily Answer Writing Challenge, 04 July 2014

1) Accelerated growth of tertiary sector during the past two decades in Indian Economy has posed multiple challenges. Discuss (300 Words) 

2) Explain what it means to say that we have perfect capital mobility. Why the Balance of Payment schedule is horizontal in the case of perfect capital mobility? (200 Words)
3) Consider the effect of a lump sum tax cut from T0 to T1, in a fixed exchange rate system. Consider both imperfect and perfect capital mobility. In which case will the tax cut have a larger effect on income? (200 words)