Question

Prepare a list of macroeconomic problem of Indian economy and comment on them in brief data analysis

Answer 1

 

IntroductionUndesirable situations that exist in the macroeconomy, largely because one or more of themacroeconomic goals are not satisfactorily attained. The primary problems are unemployment,inflation, and stagnant growth. Macroeconomic theories are designed to explain why theseproblems emerge and to recommend corrective policies.Macroeconomic problems arise when the macroeconomy does not satisfactorily achieve the goals offull employment, stability, and economic growth. Unemployment results when the goal of fullemployment is not achieved. Inflation exists when the economy falls short of the stability goal.These problems are caused by too little or too much demand for gross production. Unemploymentresults from too little demand and inflation emerges with too much demand. Stagnant growthmeans the economy is not adequately attaining the economic growth goal. Each of these situationsis problematic because society is less well off than it would be by reaching the goalsImportance of MacroeconomicsIt helps to understand the functioning of a complicated modern economic system. It describes howthe economy as a whole functions and how the level of national income and employment isdetermined on the basis of aggregate demand and aggregate supply.It helps to achieve the goal of economic growth, higher level of GDP and higher level of employment.It analyses the forces which determine economic growth of a country and explains how to reach thehighest state of economic growth and sustain it.It helps to bring stability in price level and analyses fluctuations in business activities. It suggestspolicy measures to control inflation and deflation.It explains factors which determine balance of payment. At the same time, it identifies causes ofdeficit in balance of payment and suggests remedial measures.It helps to solve economic problems like poverty, unemployment, inflation, deflation etc., whosesolution is possible at macro level only, i.e., at the level of whole economy.With detailed knowledge of functioning of an economy at macro level, it has been possible toformulate correct economic policies and also coordinate international economic policies.

 

Last but not the least merit is that macroeconomic theory has saved us from the dangers ofapplication of microeconomic theory to the problems of the economy as a whole.REVIEW OF LITERATURESince 1991, the Indian economy has pursued free market liberalisation, greater openness in tradeand increase investment in infrastructure. This helped the Indian economy to achieve a rapid rate ofeconomic growth and economic development. However, the economy still faces various problemsand challenges.1. InflationFuelled by rising wages, property prices and food prices inflation in India is an increasing problem.Inflation is currently 

Answer 2

The Indian economy has got a very large population which leads to a reduction of its gross domestic products this is due to the low per capita income, the high population ratio to the total annual production is low therefore its make it difficult to trade with the neighboring countries like the USA which has a more stable economy.

There are very many microeconomics problems in India which are single factors that affects individual decisions.

1. Poor internal and within system misunderstandings in development projects which leads to the actual acheivement of the resources.

1. Lack of the know how by the Stake holders in India concerning some of the information and knowledge required in the field of production.