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Recession 2008: Designed by Vinayak Nandikal
Recession 2008: Designed by Vinayak Nandikal
19 December 2013
Vinayak Nandikal
19 December 2013
Vinayak Nandikal
19 December 2013
Vinayak Nandikal
Vinayak Nandikal
19 December 2013
Vinayak Nandikal
Producer wants his demand always to be high Consumer wants his buying cost always to be low
Actually, Demand is the price at which consumer is ready to buy and producer is ready to sell; Usually, we think; Demand = Quantity But, here Demand = Price; This is because, Price decides the Quantity of Sales; Competitive Price = More Demand; In competitive Price = Less Demand;
Vinayak Nandikal
C] What is Recession?
Recession is the economy shrinking for two consecutive quarters (=6 months) with a decrease in the GDP (=Gross Domestic Product)
GDP = Value of all the reported goods and services produced by the people operating in the country
GDP = MONEY VALUE OF {C + I + G + (X M)} C = Consumables, I = Gross Investments, G = Government Spending, X = Exports, M = Imports
19 December 2013 Vinayak Nandikal
C] What is Recession?
GDP is a good indicator of economy; Other indicators could be; -Unemployment Rate -Consumption Rate -Actual Personal Income -Etc.. If GDP is growing, then market is growing due to increased demand;
19 December 2013
Vinayak Nandikal
C] What is Recession?
GDP is a good indicator of economy; Other indicators could be; -Unemployment Rate -Consumption Rate -Actual Personal Income -Etc.. If GDP is growing, then market is growing due to increased demand; Note: If the recession continues for next quarter, (>6 months) then we go through DEPRESSION Economy; 19 December 2013 Vinayak Nandikal
C] What is Recession?
There is a joke that economists quote to explain the Difference between Recession & Depression
RECESSION
= WHEN YOUR NEIGHBOR LOSES HIS JOB
DEPRESSION
= WHEN YOU LOSE YOUR JOB
19 December 2013 Vinayak Nandikal
Growing economy has to come down if the production rate of goods & services was more than the actual consumption;
19 December 2013
Vinayak Nandikal
19 December 2013
Vinayak Nandikal
A situation in which the supply exceeds the nations ability to consume what has been produced; Supply > Demand
Vinayak Nandikal
Vinayak Nandikal
Vinayak Nandikal
ii] Lay off people Low or No income to spend and buy goods Demand for other goods come down
In flight meals reduced Meals supplying company got the hit Catering company now, lays off people 19 December 2013
Vinayak Nandikal
So, you can see how the hit on Airline and Hotel industries can affect Un-related industries in the end; One industry can hit many other industries when the confidence level of millions of consumers & producers drastically comes down;
19 December 2013
Vinayak Nandikal
- People buying less stuff - Decrease in factory production - Growing unemployment - Slump in personal income - An unhealthy stock market
19 December 2013 Vinayak Nandikal
Producers;
Can produce and sell at their prices
Consumers;
Can decide to buy or not;
Both Producers and Consumers are free to act; Not a forced action 19 December 2013 Vinayak Nandikal
Monetary Policies
(By RBI)
Government influences the economy by changing how it (Government) spends and collects money
19 December 2013
What is Reserve Ratio? Each bank has to keep a high % of their assets in RBI (Reserve Bank of India). These assets do not earn any interest to banks. This money kept in RBI is called Reserves; RBI sets certain ratio of this reserves and it is called Reserve Ratio
19 December 2013 Vinayak Nandikal
19 December 2013
Vinayak Nandikal
It becomes an income to Govt. to inject money into Vinayak the market Nandikal
I] WOW!!!!!!!!
RBIs Power or Governments Power is double-edged sword; Sometimes, their policies to recover from recession can be counter-productive and it may further worsen the situation;
If we advise our people to save money, then, the multiplication effect is that the demand will not pickup and recession will continue; Very peculiar!!!!! But, I am not misguiding you; Just think from a macro level, if everybody in the country stops spending, what will happen?
19 December 2013
I] WOW!!!!!!!!
Most of the developing Economies like China, India;
Currently, Slow Down Stage; Not yet in Recession GDP Growth Rate Down; But, Still expected to be Around 6% in India
Currently, in Recession
19 December 2013
Vinayak Nandikal
HOPING THIS TIME RECESSION VANISHES SOON SO THAT INDIA GETS BACK TO ITS STRONGER GDP GROWTH RATE OF 8% TO 10% (THOUGH THE EXPERSTS SAY IT WILL LAST TILL Q3 OF 2009)
19 December 2013 Vinayak Nandikal