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Fuyuka Nakamura

India's GDP growth slows sharply - May. 31, 2012 - 2 views

  • sharply
    • Fuyuka Nakamura
       
      AD/AS changed in time fast
  • In the first quarter, the country's manufacturing sector contracted and its agricultural sector slowed substantially
    • Fuyuka Nakamura
       
      An aggregate demand and supply curve can be shown to demonstrate the decline in GDP, which resulted from the contraction in the agricultural sector/manufacturing sector. The supply curve can shift down to demonstrate how the economy is producing less.
  • due primarily to weakness in its manufacturing and agricultural sectors
    • Fuyuka Nakamura
       
      Reason for the decline in economic growth in India. Shift in AS.
  • ...8 more annotations...
  • Spending by both consumers and the government decelerated slightly.
    • Fuyuka Nakamura
       
      By spending to decrease, the demand curve will shift, as people demand/spend less on the good/service.
    • Fuyuka Nakamura
       
      Consumer confidence is affected by the high interest rates (mentioned below)
  • tighter monetary policy
    • Fuyuka Nakamura
       
      Monetary Policy can be described. The interest rate and supply of money can be described to show how goods/services can affect economic growth.
  • interest rates high for three years to battle rapid inflation
    • Fuyuka Nakamura
       
      As interest rates are high, the sectors will not want to borrow money, as they will be losing out on money. Consumers will also save their money rather than spend it, which then affects the aggregate demand curve. Which then affects the economic growth.
    • Fuyuka Nakamura
       
      Contrationary Monetary Policy, as the Gov is trying to fight the inflation. In other words they want to lower the price levels. They do this by rising the interest rate to decrease the supply of money.
  • lower that rate slightly to try to stimulate economic growth.
    • Fuyuka Nakamura
       
      Can talk about the effect of lowering the interest rates. How the consumers will start to spend rather than save and how the businesses (sectors) start to borrow money for investment, which then pumps up the economic growth.
  • lower rates further
    • Fuyuka Nakamura
       
      the Reserve Bank of India can impose Expansionary Monetary Policy, lowering the interest rates, increasing the money supply, encouraging new consumption and investments. This will shift the AD out, increasing India's GDP within time. This will be their solution.
  • economic growth
    • Fuyuka Nakamura
       
      About India's GDP It will involve AD and AS
  • sharply
  • India is the world's second most populous nation after China, and the 11th largest economy,
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