A) Eexpenditure on collection of tax is a revenue expenditure as  revenue expenditure refers to the estimated expenditure in a fiscal year which does not create assets for the government or reduction in liabilities.

B ) Expenditure on purchasing computers is a capital expenditure as capital expenditure refers to the estimated expenditure in a fiscal year which creates assets for the government and causes reduction in liabilities for the government.

C )  It is a capital expenditure as it increases asset of the government. 

D)  It is a revenue expenditure as it neither creates any asset nor reduces any liability of the government 

B) 

Cash Reserves Ratio (CRR) refers to the proportion  of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.

Cash reserve ratio  = (primary deposit / total deposit) x 100

                               = (2,500 / 20,000) x 100

                               = 12.5 %

Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits. 

Multiplier = 1/ Cash reserve ratio 

                = 100 / 12.5 

                = 8 times 

Cash Reserves Ratio (CRR) refers to the proportion  of total deposits of the commercial banks which they must have keep as cash reserves with the central bank. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.

Cash reserve ratio  = (primary deposit / total deposit) x 100

                               = (2,500 / 20,000) x 100

                               = 12.5 %

Multiplier refers to the number of times the commercial banks multiplies the primary deposit in the credit creation process in order to create total deposits. 

Multiplier = 1/ Cash reserve ratio 

                = 100 / 12.5 

                = 8 times 

A) 

Given: Cash reserve ratio= 10%

            Primary deposit= Rs. 1,250 crores 

Total deposits are the over all money including the primary deposits created by the commercial banks as a process of credit creation through its primary deposit.

Total deposit= (1/ cash reserve ratio) x primary deposit 

                      = (1/10%) x 1,250 crores 

                      = (100/10) x 1,250 crores 

                      = 10 x 1,250 crores 

                      = 12,500 crores 

D) An economy can be in equilibrium when there is unemployment in the economy when the aggregate demand= aggregate supply in the economy. It refers to a situation when aggregate demand is equal to the aggregate supply at a level where the resources are not fully employed.

A) Yes, APS can be negative in situations when S is negative, i.e. when consumption exceeds income, e.g.
Y = 50, C = 100 .
and S = Y-C = - 50, APS = S/Y = -50/50 = -1

B) 

The maximum value of multiplier is infinity when the value of MPC is 1. It implies that the economy is consuming the entire additional income.

The minimum value of multiplier is one when the value of MPC = 0. It implies that the economy is saving the entire the additional income.

B) The value of APS can be negative when consumption expenditure becomes higher than income. For example, if income is र 1,000 and consumption expenditure is र 1,200, then saving is -200 (i.e., dissaving).
Then    

C) Investment or Autonomous investment is independent of the level of income in the economy. It can only be increased or decreased by government actions. Since, the amount of investment is independent of the level of income/output, the investment curve is drawn as a horizontal straight line parallel to the x-axis. 

a) Balance of trade: The term “balance of trade” denotes the difference between the exports and imports of goods in a country. Balance of trade refers to the visible items only. It is the difference between the value of merchandise (goods) exports and imports.
Balance of Trade = Export of visible goods – Import of visible goods.

A budget deficit occurs when expenses exceed revenue and indicate the financial health of a country. The government generally uses the term budget deficit when referring to spending rather than businesses or individuals. Accrued deficits form national debt.

Aggregate Supply is the money value of all final goods and services available for purchase by an economy during a given period. It is the flow of goods and services in the economy. Since, money value of final goods and services is equal to net value added, AS is nothing but the national income. 

AS = C + S

Aggregate supply represents the national income of the country.

AS = Y (National Income)

Functions of a Central Bank. Main functions of a Central Bank are to act as governor of the machinery of credit in order to secure stability of prices. It regulates the volume of credit and currency, pumping in more money when market is dry of cash, and pumping out money when there is excess of credit. Broadly, a central bank has two departments, namely, issue department and banking department. We discuss below its main functions.
1.    Issue of Currency. The central bank is given the sole monopoly of issuing currency in order to secure control over volume of currency and credit. These notes circulate throughout the country as legal tender money. Note-issuing is governed by Minimum Reserve System i.e. while issuing currency notes, a minimum fixed amount of gold and foreign currency is kept by Central Bank. It has to keep a reserve in the form of gold and foreign securities as per statutory rules against the notes issued by it. It may be noted that RBI issues all currency notes in India except one rupee note. Again it is under directions of RBI that one rupee notes and small coins are issued by government mints. Remember, central government of a country is usually authorised to borrow money from the central bank. When central government expenditure exceeds government revenue and Govt, is unable to reduce its expenditure, then it borrows from RBI. This is done by selling security bills to RBI which creates new currency notes for the purpose. This is called monetisation of budget deficit or deficit financing. The government spends new currency and puts it into circulation to meet its expenditure.
2.    Banker to the Government. Central Bank functions as a banker to the government— both central and state governments. It carries out all banking business of the government. Governments keep their cash balances in the current account with the central bank. Similarly, central bank accepts receipts and makes payment on behalf of the governments. Also central bank carries out exchange, remittance and other banking operations on behalf of the government. Central bank gives loans and advances to governments for temporary periods, as and when necessary, and it also manages the public debt of the country.
3.    Bankers’ Bank and Supervisor. There are usually hundreds of banks in a country. There should be some agency to regulate and supervise their proper functioning. This duty is discharged by the central bank. Central bank acts as banker's bank in three capacities : (i) it is custodian of their cash reserves. Banks of the country are required to keep a certain percentage of their deposits with the central bank; and in this way the central bank is the ultimate holder of the cash reserves of commercial banks. (ii) Central bank is lender of last resort. Whenever banks are short of funds, they can take loans from the central bank and get their trade bills discounted. Thus Central Bank is a source of great strength to the banking system. (iii) It acts as a bank of central clearance, settlements and transfers. Its moral persuasion is usually very effective so far as commercial banks are concerned.
4.    Controller of Credit and Money Supply. It is an important function of a Central Bank to control credit and money supply through its monetary policy. There are two parts of monetary policy, viz., currency and credit. Central Bank has monopoly of issuing notes and thereby can control the volumes of currency. Main objective of credit control function of a Central Bank is stabilising of price level. It controls credit and money supply by adopting quantitative measures and qualitative measures, namely, (i) Bank Rate, (ii) Open Market Operations, and (iii) CRR which influence credit availability and credit creation.C

The Income Method measures national income from the side of payments made to the primary factors of production in the form of rent, wages, interest and profit for their productive services in an accounting year. Thus, national income is calculated by adding up factor incomes generated by all the producing units located within the domestic economy during a period of account.

 Alternative Methods Used for Measuring National Income

• Value Added Method: This is also called output method or production method. ...
• Income Method: This method approaches national income from distribution side. ...
• Expenditure Method: Expenditure method arrives at national income by adding up all expenditures made on goods and services during a year.

Commercial banks plays an important role of 'money creator' in the economy. They have the capacity to generate credit through demand deposits. These demand deposits make credit more than the initial deposits.The process of money creation can be explained by taking an example;

Suppose a depositor deposits Rs.10,000 in his savings account of a bank XYZ, which will become the demand deposits of the bank. Based on the assumption that not all customers will turn up at the same day to withdraw their deposits, banks maintains a minimum cash reserve of 10% of the demand deposits, Rs.10,000. It lends the remaining amount of Rs.9000 in the form of credit to other customers. This further creates deposits for the bank XYZ. With the cash reserve of Rs.1000, the credit creation is worth Rs.10,000. So, the credit multiplier is given by:

 Credit multiplier=10%1​=10

The money supply in the economy will increase by the amount (times) of credit multiplier.

NUMERICAL EXAMPLE;

1. We will make some assumption;

    (i) All banks are one unit.

    (ii) All the transactions are made through banks.

The total fish production in the country rose from 0.752 million metric tons in 1950-51 to 13.42 million Page 3 3 metric tons (provisional) during FY 2018-19. Of this, the marine fisheries contributed 3.71 million metric tons and the inland fisheries contributed 9.71 million metric tons.

Poverty is the inability to fulfill the minimum requirement of life like food, clothing, housing education and health facilities etc.

Depreciation of domestic currency leads to rise in exports.

Gross investment refers to the total expenditure on buying capital goods over a specific period of time without considering depreciation. On the other hand, Net investment considers depreciations and is calculated by subtracting depreciation from gross investment.

PPC shows the maximum possible combination of two goods that can be produced with the available resources and technology.  So the production one good can be increased by taking resources from the production of another good as there is inverse relationship between the change in quantity of production one good to the change in the qunatityy of production of another good. Therefore the PPC sloped downards from left to right.