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
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.
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.
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.
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.