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business environment

business environment

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Published by: snowgpt on Mar 12, 2010
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Structural change in economy
From Wikipedia, the free encyclopedia
Structural change
of aneconomy refers to a longterm widespread change of the fundamental structure, rather than microscale or short-term output and employment. For example,asubsistence economyis transformed into a manufacturing economy, or a regulated mixedeconomy is liberalized. A current structural change in the world economy isglobalization.Fisher (1939)
and Clark (1940)
 look at patterns in changes in sectoral employment. The logicof their arguments being that patterns of production are functions of the level of income and thatresource and production shifts are an integral part of development. The major determinant of these shifts is the income elasticity of demand. Goods or sectors for which there is a high incomeelasticity of demand will grow in importance as income grows. Countries start with their production dominated by primary production, then secondary activities start to dominate andfinally the tertiary sector dominates.Structural change can be initiated by policy decisions or permanent changes in resources,population or the society. Thedownfall of communism,for example, is a political change that has had far-reaching implications on the economies dependent on the state-run Soviet economy.Structural change involves obsolescence of skills, vocations, and permanent changes in spendingand production resulting instructural unemployment.Short-term economical challenges can be managed with short-termfiscalor  monetary policydecisions, and fluctuations are expected to even out in a few years. Managing structuralchange requires long-term investments such aseducation,andreforms aimed at increasing labor  mobility. The Trade Adjustment Assistance is an example of such a program.
Economic planningEconomic planning in india
The long term objective of Economic Planning were spelled out in various planned documentsin the interim documents. Upto the 7th five year plan , broadly the main objcetives were:-1).Economic gwoth, approximately 5%per annum.2).Self Reliance3).Removal of Unemployment.4).Removal of Economic inequalities(govt. removes inequalities by various tech. likeNationalisation, putting money in the market, holding some of the institutions under its owncontrol etc.)

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