KHYBER PAKHTUNKHWA PUBLIC SERVICE COMMISSION
WRITTEN EXAMINATION FOR THE POSTS OF PMS OFFICER / AETO BPS-17
(2025)
ECONOMICS (PAPER-I)
Time Allowed: 03 Hours Total Marks: 100
Note:- Attempt five questions selecting at least two from each part.
PART – A
Q.No.1 Define Marginal Rate of Substitution (MRS12)? Show that at equilibrium of Indifference curve approach, the MRS is equal to the negative of the ratio of prices of both commodities? (20)
Q.No.2 Using AD and AS approach, show how market equilibrium can be derived? Explain how the AD-AS model of Keynesians is different from that of Classical? What factors affect this equilibrium? Elaborate? (20)
Q.No.3 Define and explain the following terms: (20)
i.Marginal rate of technical substitution (MRTSLK)
ii.Iso-cost and Iso-quant curves and their equilibrium
Q.No.4 Explain how inflation is measured? What effects inflation? How does inflation affect an economy? (20)
PART – B
Q.No.5 What is import substitution and export promotion? Elaborate the importance of trade for the economic development of any country? (20)
Q.No.6 Define Protectionism? What are the methods of protectionism? What are the arguments against and in favour of the protectionism? (20)
Q.No.7 Explain how monetary policy is conducted under the rules and under the central bank discretion? What are the tools of monetary policy? (20)
Q.No.8 Define the term fiscal deficit? How the fiscal deficit of a government is financed? Which of the methods of deficit financing is least inflationary? (20)
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