Managerial Economic in a Global Environment System

Question: Discuss about the Managerial Economic in a Global Environment System. Answer: Introduction The economist magazine has been publishing periodic news articles on various economic issues. The content of this paper thereby analyses various theoretical economics issues which are related to one of the news articles published on April 17, 2017. The article talks about various economic challenges which are facing Indian economy in the current year 2017. After critical discussion of three main economic themes within the article, the content of this paper also apply various policies related to the three main economic themes discussed. Various economic articles always contain economic discrepancies therefore the content of this paper also aims at justification and critiques of the article. the content of the paper lastly looks into how various policies have been applied within the content of the article and justifies whether the models as well as the economic policies have been well applied and used in the content of the news article. The economic news article selected is titled why the year 2017 is a challenging year to the Indian economy one of the challenges of the challenges addressed by the author of the news article is the daily rising wage rate, food prices as well as the increased property prices (The economist 2017). As indicated by different monetary speculations examined, it is very apparent that swelling is not quite recently because of overabundance request of products, but rather it is likewise connected to different cost push inflationary components. For example, the costs of sustenance staff have ascended therefore of the different supply requirements in farming segment in the year 2017 (Baker, Bloom and Davis 2016). These high costs have brought about swelling and are right now the central point lessening expectations for everyday comforts of poor people who are touchy to nourishment costs. In the recent year the unemployment rate in India as a country is high compared to other nations lamming its economic progress in the current year 2017. According to the current world census, India is in the top two of nations in the world with the largest population (Altbach, Gumport and Berdahl 2011). The available firms or industries are therefore limited to accommodate all the non employed individuals. In such cases where most of the people are not employed the government expenditure and boring are always high leading to slow economic growth. Over the recent the recent past the rate of inflation in India has been a little high compared to the previous year 2016. This according to the article with reference to IMF is as a result of the increased government expenditure and inflation (The economist 2017). The rate of output over the recent months of this is higher than the import thus suggesting weak economic growth. Relevant theoretical economic concepts to the article The selected article talks of India losing its position as one of the most fragile economy in the world. Over the recent past Indian as a country has been among the top five most fragile states but is currently moving backwards. In such a case the most economic theoretical model suiting the explanation is the growth of real GDP (The economist 2017). Indian real GDP which is the perfect measure of economic growth and development is currently high suggesting high rate of inflation an government expenditure in the current year. Over the recent past the Indian inflation rate of inflation has been at a controllable percentage of 4% per annum. In the year 2017 the rate has been increasing result into an effect to the economic health of India. In the year 2017, the rate of inflation according to the article has been increasing. This is as a result of the rising wage rates, prices of both private and business property as well as the improving food prices. In such situations where the rates of commodities are so high the rate of inflation also increase which is a challenge to economy of India. As per the information the rate Indian inflation currently in the year 2017 is ranging between 8 to 10 percent which is not healthy to an economy. This increasing rate inflation has been a problem despite periods of economic slowdown (The economist 2017). When excess money is in the hands of the public members the rate of inflation increases, current in India various firms of the government as well as private firms have inc reased the wage rate leading to inflation. The government should therefore develop various policies to control inflation rate. The rate of unemployment in India has been growing daily based on the population growth rate and stiff employment policies. There has been human resource wastage based on the large population in India. According to various censuses, India is the second with the largest population in the whole world after China. This has resulted into low living standards as well as low income per capita (The economist 2017). The with employment policies firms can only absorb the recommended number of employees leaving the rest to lie as waste. With the increased rate of unemployment the rate of real gross domestic product is also very low. Unemployment is therefore one of the economic issues that challenges the economic growth of India this year 2017. This is the control of the flow of money into the economic system to control the growth rate. The Indian real GDP as already mentioned is currently running at the rate of 6.6% from the previous year. This rate is too high above the normal growth rate which should at 3%, the rate of demand within the economy grows very first than the economy could sustain. Based on this the Central Bank of India should apply monetary policy to control the rate of inflation (Kotwal, Ramaswami and Wadhwa 2011). By increasing the rate of interests, borrowing of money becomes hectic and more expensive while making saving more attractive leading to reduced growth rate and consumer expenditure (The economist 2017). Fiscal policy is one of the policies that should be exploited by the Indian government to control the economy. This policy involves the use of both taxation and expenditure to control economic growth. This policy should be adopted like in the case of India where the economy requires external influence to be at a sustainable position (George 2017). Since the economy of India requires an external force in order to reach the desires point, the government should apply fiscal policy as it is suitable of controlling all the economic aspects such as the rate of employment, government expenditure and economic growth rate at the same time. When fiscal policy is adapted by the government, the results will be directly evident on the aggregate demand of the Indian economy over a given period (George 2017). The aggregate demand is the total sum of all the final commodities within the economy thus controlling the aggregate demand sustains an economy as explained. Even though the article is economically well organized there are some economic discrepancies within the content. The news article even though highlights various economic problems facing India as one of the global economy; it fails to apply various economic models apart of the economic analysis (The economist 2017). The news article only slightly describes various forces making India not be one of the most economies of the world but does not apply various economic models such as the demand and supply, models explaining the effect of high growth rate as well as the effect of inflation and unemployment. It depends upon various sections of AD. e.g. in case sureness is low, cutting charges may not manufacture buyer spending since people need to save. Moreover, people may not spend assess decreases, if they will soon be pivoted (The financial specialist 2017). Over the long force, expansionary monetary approach may achieve spilling, i.e. the organization expands spending which they get from the private division, these outcomes into less consumption, and consequently AD does not increment. Be that as it may, on the opposite side the Keynesians fight swarming out as an element which may not occur in a liquidity trap (The economist 2017). Considering the all the discrepancies, the author of the article also included two policies which should be employed by the Indian government (Budhwar and Varma 2010). This is perfect as it provides various options for the situation control. The article even though may have some discrepancies as highlighted it is well organized and can be used by the policy makers to sustain the Indian economic health. References Altbach, P.G., Gumport, P.J. and Berdahl, R.O. eds., 2011. American higher education in the twenty-first century: Social, political, and economic challenges. JHU Press. Baker, S.R., Bloom, N. and Davis, S.J., 2016. Measuring economic policy uncertainty. The Quarterly Journal of Economics, 131(4), pp.1593-1636. Budhwar, P. and Varma, A., 2010. Guest editors' introduction: Emerging patterns of HRM in the new Indian economic environment. Human Resource Management, 49(3), pp.345-351. DeGeorge, G., 2017. Issue: Economic Indicators Short Article: When Indicators Can't Be Trusted. Kotwal, A., Ramaswami, B. and Wadhwa, W., 2011. Economic liberalization and Indian economic growth: What's the evidence?. Journal of Economic Literature, 49(4), pp.1152-1199. Krueger, A.O., 2012. Economic policy reforms and the Indian economy. University of Chicago Press. Salma, S. and Said, T., 2016. Threshold effects of fiscal policy on economic growth in developing countries. Journal of Economic Financial Studies, 4(03), pp.24-37. The economist April 17, 2017; Authoritative insight and opinion on international news, politics, business, finance, science, technology and the connections between them https://www.economist.com/topics/economics