Economics important questions

Secondary data are data that have already been collected, processed and published by someone else for some other purpose, and are used by the investigator second-hand for the present study. They are cheaper and quicker to obtain than primary data but must be used carefully after checking their reliability, suitability and adequacy.

Sources of secondary data are of two types:

(a) Published sources:

• Government publications: reports of the Central Bureau of Statistics, economic surveys, census reports, budget.
• Reports of international agencies: UNO, World Bank, IMF, ADB.
• Publications of banks and financial institutions: Nepal Rastra Bank reports.
• Reports of committees, commissions and research institutes.
• Journals, newspapers, magazines and books.
• Trade associations and chambers of commerce.

(b) Unpublished sources:

• Records, registers and files of government offices and business firms.
• Unpublished research works, theses and dissertations of scholars.
• Records maintained by private individuals and organisations.

Before using secondary data, the investigator should ensure they are reliable, suitable for the purpose and adequate for the study.

Quantitative analysis means the use of mathematical and statistical tools (numbers, functions, equations, averages, index numbers, etc.) to study economic problems. Its need in economics: - Precise expression of relationships: economic r...

Census method: In the census (complete enumeration) method, data are collected from each and every unit of the population/universe under study. It gives accurate and detailed results but is costly and time-consuming, so it is used when the population is small or high accuracy is essential (for example the national population census).

Sampling method: In sampling, only a representative part (sample) of the population is studied and the results are used to draw conclusions about the whole population. It is cheaper, faster and needs less labour, though it may carry some sampling error.

Methods of primary data collection (primary data = data collected first-hand by the investigator for the specific study):

• Direct personal interview: the investigator personally meets and questions the respondents.
• Indirect oral investigation: information is collected from third parties who know about the respondents.
• Questionnaire sent by mail: printed questionnaires are mailed to respondents who fill and return them.
• Schedules filled by enumerators: trained enumerators visit respondents and fill the schedule.
• Information through local agents/correspondents: local agents supply information regularly.
• Direct observation: the investigator observes and records facts directly at the field.

The choice of method depends on the objective, area, funds and time available for the study.

Given: A continuous frequency distribution. First find cumulative frequencies (c.f.). Class $f$ c.f. --------- 5-15 4 4 15-25 5 9 25-35 7 16 35-45 10 26 45-55 4 30 55-65 3 33 65-75 4 37 $$ \begin{aligned} N &= 37 \ \qquad \frac{N}{2} &=...

Given: Base year (2012) price $p0$, quantity $q0$; current year (2015) price $p1$. Laspeyre's price index uses base-year quantities as weights: $$P{01} = \frac{\sum p1 q0}{\sum p0 q0} \times 100$$ Computation table: Commodity $p0$ $q0$ $...

Given: $x = \dfrac{52.23 \times 15.4}{69.35 \times 2.76}$

Take logarithm on both sides: $$\log x = (\log 52.23 + \log 15.4) - (\log 69.35 + \log 2.76)$$

Reading values from the log table: $$ \begin{aligned} \log 52.23 &= 1.7180\ \log 15.4 &= 1.1875\ \log 69.35 &= 1.8412\ \log 2.76 &= 0.4409 \ \log x &= (1.7180 + 1.1875) - (1.8412 + 0.4409) \ \log x &= 2.9055 - 2.2821 \ &= 0.6234 \end{aligned} $$

Taking antilog: $$ \begin{aligned} x &= \text{antilog}(0.6234) \ &= 4.20 \end{aligned} $$

Answer: The value is approximately 4.20.

Given: The line $3x + y - 9 = 0$. Reduce it to the slope-intercept form $y = mx + c$, where $m$ = slope and $c$ = y-intercept: $$ \begin{aligned} 3x + y - 9 &= 0\ y &= -3x + 9 \end{aligned} $$ Comparing with $y = mx + c$: $$ \begin{alig...

Given: In matrix form $AX = B$: $$A = \begin{bmatrix} 1 & 3 \ 1 & 1 \end{bmatrix}, \quad B = \begin{bmatrix} 13 \ 7 \end{bmatrix} $$ Determinant: $$ \begin{aligned} A &= (1)(1) - (3)(1) \ &= 1 - 3 \ &= -2 \end{aligned} $$ Since $A \n...

Given: A continuous frequency distribution. Take mid-value $m$ of each class. $$\bar{x} = \frac{\sum fm}{N}$$ Computation table: Class $m$ $f$ $fm$ ------------ 0-100 50 4 200 100-200 150 12 1800 200-300 250 16 4000 300-400 350 10 3500 4...

Given: A discrete series. First find cumulative frequencies (c.f.). Marks $f$ c.f. --------- 50 2 2 60 4 6 70 8 14 80 4 18 90 1 19 $$N = 19$$ First quartile $Q1$: size of $$ \begin{aligned} \dfrac{N+1}{4} &= \dfrac{20}{4} \ &= 5^{th} \e...

Given: Two points $(x1, y1) = (2, 2)$ and $(x2, y2) = (-2, 5)$. Slope: $$ \begin{aligned} m &= \frac{y2 - y1}{x2 - x1} \ &= \frac{5 - 2}{-2 - 2} \ &= \frac{3}{-4} \ &= -\frac{3}{4} \end{aligned} $$ Equation using point-slope form $y -...

Given: In matrix form $AX = B$: $$A = \begin{bmatrix} 3 & 5 \ 2 & 3 \end{bmatrix}, \quad B = \begin{bmatrix} 25 \ 16 \end{bmatrix} $$

Determinant: $$ \begin{aligned} |A| &= (3)(3) - (5)(2) \ &= 9 - 10 \ &= -1 \end{aligned} $$

Since $|A| \neq 0$, using Cramer's rule: $$ \begin{aligned} x &= \frac{1}{|A|}\begin{vmatrix} 25 & 5 \ 16 & 3 \end{vmatrix} \ &= \frac{(25)(3) - (5)(16)}{-1} \ &= \frac{75 - 80}{-1} \ &= \frac{-5}{-1} \ &= 5 \ y &= \frac{1}{|A|}\begin{vmatrix} 3 & 25 \ 2 & 16 \end{vmatrix} \ &= \frac{(3)(16) - (25)(2)}{-1} \ &= \frac{48 - 50}{-1} \ &= \frac{-2}{-1} \ &= 2 \end{aligned} $$

Answer: $x = 5, ; y = 2$. Check: $3(5) + 5(2) = 25$ and $2(5) + 3(2) = 16$. Verified.

Given: Base year (2004) price $p0$, quantity $q0$; current year (2005) price $p1$. Laspeyre's price index uses base-year quantities as weights: $$P{01} = \frac{\sum p1 q0}{\sum p0 q0} \times 100$$ Computation table: Commodity $p0$ $q0$ $...

Given: A continuous frequency distribution. Take mid-value $m$ of each class. $$ \begin{aligned} \bar{x} &= \frac{\sum fm}{N} \ \qquad \sigma &= \sqrt{\frac{\sum fm^2}{N} - \left(\frac{\sum fm}{N}\right)^2} \end{aligned} $$ Computation ...

Given: $x = \dfrac{31.3 \times \sqrt{74.3}}{\sqrt{47.3}}$

Take logarithm on both sides: $$\log x = \log 31.3 + \tfrac{1}{2}\log 74.3 - \tfrac{1}{2}\log 47.3$$

Reading values from the log table: $$ \begin{aligned} \log 31.3 &= 1.4955\ \tfrac{1}{2}\log 74.3 &= \tfrac{1}{2}(1.8710) \ &= 0.9355\ \tfrac{1}{2}\log 47.3 &= \tfrac{1}{2}(1.6749) \ &= 0.8374 \ \log x &= 1.4955 + 0.9355 - 0.8374 \ &= 1.5936 \end{aligned} $$

Taking antilog: $$ \begin{aligned} x &= \text{antilog}(1.5936) \ &= 39.23 \end{aligned} $$

Answer: The value is approximately 39.23.

Given: In matrix form $AX = B$: $$A = \begin{bmatrix} 4 & -3 \ 6 & 2 \end{bmatrix}, \quad X = \begin{bmatrix} x \ y \end{bmatrix}, \quad B = \begin{bmatrix} 5 \ 40 \end{bmatrix} $$

Determinant: $$ \begin{aligned} |A| &= (4)(2) - (-3)(6) \ &= 8 + 18 \ &= 26 \end{aligned} $$

Since $|A| \neq 0$, a unique solution exists. Using Cramer's rule: $$ \begin{aligned} x &= \frac{1}{|A|}\begin{vmatrix} 5 & -3 \ 40 & 2 \end{vmatrix} \ &= \frac{(5)(2) - (-3)(40)}{26} \ &= \frac{10 + 120}{26} \ &= \frac{130}{26} \ &= 5 \ y &= \frac{1}{|A|}\begin{vmatrix} 4 & 5 \ 6 & 40 \end{vmatrix} \ &= \frac{(4)(40) - (5)(6)}{26} \ &= \frac{160 - 30}{26} \ &= \frac{130}{26} \ &= 5 \end{aligned} $$

Answer: $x = 5, ; y = 5$. Check: $4(5) - 3(5) = 5$ and $6(5) + 2(5) = 40$. Verified.

Given: A straight line making equal intercepts on both axes, so intercept on x-axis = intercept on y-axis $= a$. The intercept form of a line is: $$\frac{x}{a} + \frac{y}{b} = 1$$ With equal intercepts $a = b$: $$ \begin{aligned} \frac{x...

An underdeveloped country has a low level of per capita income and living standard. Main characteristics:

• Low per capita income and mass poverty.
• Predominance of agriculture with low productivity.
• Rapid population growth.
• High unemployment and underemployment.
• Low capital formation (low saving and investment).
• Backward technology and low productivity.
• Poor infrastructure and social services.
• Unequal income distribution and economic dualism.
• Dependence on primary exports and foreign aid.

Nepal shares most of these characteristics.

Causes of poverty in Nepal:

• Rapid population growth outpacing resources.
• Low agricultural production and productivity.
• Mass unemployment and underemployment.
• Unequal distribution of land, income and wealth.
• Low capital formation due to low saving and investment.
• Lack of education, skill and health (weak human capital).
• Backward technology and poor infrastructure.
• Difficult geography limiting development in remote areas.
• Political instability, corruption and weak governance.

These factors keep a large part of the Nepalese population below the poverty line.

Economic development is a sustained rise in real per capita income with improved living standards. Its indicators: - Per capita real income (GNP/GDP per head). - Human Development Index (HDI): health, education and income. - Poverty and ...

The table shows the population density (persons per sq. km.) of Nepal by area and region. - Urban areas have by far the highest density (1380), much above the national average, because of concentration of jobs, services and facilities in...

Plan formulation is the process of preparing a periodic development plan. Main steps:

• Fixing objectives and priorities by the National Planning Commission (NPC).
• Assessment of available resources (human, natural, financial, foreign).
• Setting overall and sectoral targets within resource limits.
• Sectoral allocation of resources among agriculture, industry, infrastructure and social services.
• Preparation of the draft plan by experts and committees.
• Discussion and approval by ministries, stakeholders and the government.
• Implementation, monitoring and evaluation of the approved plan.

In Nepal the National Planning Commission is the apex agency for plan formulation.

Foreign employment (Nepalese working abroad) is very important for the economy:

• Remittance: a major source of foreign exchange supporting the balance of payments.
• Poverty reduction: remittance raises household income and living standards.
• Employment of surplus labour: it absorbs the large unemployed and underemployed workforce.
• Skill and experience transfer by returning workers.
• Capital formation: part of remittance is saved and invested.
• Government revenue and support to national income.

Despite some social costs (loss of active manpower), foreign employment currently plays a vital role in sustaining Nepal's economy.

Measures to reduce poverty in Nepal: - Increasing production and productivity in agriculture and industry. - Generating employment through labour-intensive industries, self-employment and skill training. - Controlling population growth. ...

Human resource means the working population with its knowledge, skill and health. Its importance for Nepal's development: - Active factor of production: human resource uses all other resources (land, capital) to produce goods and service...