CSS 2022 Economics Paper I

Distinguish between Income Effect and Substitution Effect for a Giffen good using Hicksian and Slutsky's approaches. Use diagrams to support your answer.

Explain the Kinked Demand Curve model of Oligopoly. Why is the price rigid under this model even if the marginal cost changes within a certain range?

Discuss the various methods of measuring National Income. What are the conceptual and practical difficulties encountered in measuring the GDP of a developing country like Pakistan?

Analyze the relationship between inflation and unemployment using the Phillips Curve. Distinguish between the short-run and long-run Phillips Curve.

Explain Milton Friedman's Permanent Income Hypothesis. How does it differ from Keynes' Absolute Income Hypothesis in terms of the Marginal Propensity to Consume?

Critically evaluate the Heckscher-Ohlin Theory of International Trade. Does the Leontief Paradox contradict the H-O theory? Explain.

Define Correlation and Regression. Under what conditions will the two regression lines coincide? Calculate the correlation coefficient for a given set of X and Y values.