Fiscal Policy and Public Finance in India — DU B.A. (Hons.) Economics Previous Year Question Papers

(-1 a) Discuss the importance of public secler in correcting the market failure? 9 M b) How can we reduce the moral Hazard effccts of welfare by increasing the outside options availabie to the individuals? Explain 9 M Q-2 "Proper assignment of property rights to any good, even if externalities are present, will allow bargaining between the affected parties, such that an efficient solution can be obtained". Discuss the above statement in light of the Coase theorem. 18 M Q-3 a) "Offsetting the consumption-Smoothing benefits of health insurance to individuals is the risk of moral Hazard" (Gruber). Explain with suitable diagram. 9 M b) How can a country combat the issue of national food security. Explain with some examples. 9 M Q-4 "Public goods generate market failure because the non-rival and non-excludability characteristics prevent Natural market incentives from achieving an allocative efficient outcome". Critically discuss. 18 M Q-5 Write Short notes on any 2 of the following: a) Pigouvian Tax and Subsidy b) Flat of the Curve c) Ordeal Mechanism Q-6 Discuss the major departures in the approach of the 15th finance commission from the previous finance commissions in determining the criteria for the grants towards local bodies. Q-7 The decentralized system is better than centralized one to maximize social welfare. Do you agree with this statement? Give reasons to support your answer.