1.

How does the study of Managerial economics help a business manager in

decision-making? Illustrate your answer with examples from contemporary
issues.
Pradip Chandra Subedi
Roll No: 77341034
Managerial economics helps a lot in making decision in various sector in Business.
Basically, Managerial economics is related to decision making in Cost of Product, Demand
of a Product, Production Plan or Cycle etc. It helps to take decision about how to reduce
variable cost and fix cost, how to increase the profit? So, if you are good in all these things
mentioned above, you will do good in making decision regarding your business or
organization. For example you have a plant of Cement making and you don't know how
much you are spending on preparing it , what is the demand of that Cement in possible
market ? with which combination you will make most product at low cost ? you will not
be able to make correct decisions. Therefore, Managerial economics help to take a
decision as being business manager. Main Importance of the study of Managerial
Economics to help taking decision making can listed as below:
1. As a business manager, we should know that, how should any production be done and
for whom should be produced? The answer to all these questions remains only with the
managerial economy. So that managerial economics plays a key role and significance in
the important decisions of the business.
2. The beauty of business economics is it heps to mazimize the profit of business and
minimize a cost. For that Various policies regarding this are made from the study of
Managerial economics. It helps chalking out Business policies.
3. Planning is the first thing to do as a Business Manager. Business economics is very useful
in planning a complete prospect among the successful operation of any business or firm.
Which acts as a balancing bridge between the producing and operating systems and
where to take business.
4. Managerial economics decides the business is going towards profit or loss. managerial
economics decides which way is good for the business. In other word, cost control
decision are made through the study of managerial economics.
5. Managerial economics is useful in coordinating the various activities of a business.
6. Demand forecasting using tools of Managerial economics provides near relevant result.
It is very useful in demanding production planning.
7. Managerial economics helps and play huge role to managers to decide on the planning
and control of the benefits.
8. It seeks future of business. It can see what is troubling in the future of organization. By
the study of managerial economics manager can take appropriate decision.
9. Determination of price is very important in business. Managerial Economics provides
the necessary guidance in managing the pricing of its products.
10. Taxation and Auditing are the key function of manager. Managerial Economics
provides useful guidance in solving problems caused by various types of tax done in
business and auditing related problems.
11. Organization has various type of environment. They influence the operation of
business. Analyzing the various environmental factor is key function of any business
manager, it can be done through the study of business economics. Reducing their bad
influence and giving benefit to the good effect is success of any manager.
In conclusion, we can say that Managerial economics can play a key role to take decision
about define Problem of business, determining objective, identify possible solution and
select best possible solution, managing internal and external problems.
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2. Review of the article and synthesize
Dynamics of India's growth slowdown- effects, cause and prevention
The article by Amit Kapoor titled “The dynamics of India’s growth slowdown” has put
focus on the causes of Indian economy slowdown, effect and preventive methods for that.
Mr. Kapoor lighten mainly on following:-
1. The GDP of Indian economy has slipped to the lowest in over six years touched 5% in
first quarter of FY2020.
2. India's economy has moved toward the tougher future.
3. One of the piller of India’s economy is automobile sector.
4. Symptoms of Failing the manufacturing sector has shown because non-performing
assets are rising, and job losses from various manufacturing sector.
5. Curve of GDP is in recession. It indicates that contraction on economy of india but point
to be noted is that since being India is a large developing economy, contraction was rare.
6. India is facing nowadays is economy continues to grow but in slower pace than usual.
7. The main reason of growing Indian economy is increasing in PFCE and GFCE.
8. If consumption spending falls, then output and employment levels also fall. As a result,
economy would stagnate, and prices deflate. And it can appear as vicious cycle. This can
lead the economy to deeper state of shock.
9. Another major component of India's GDP is investment since liberalization of 1991. but
it fell by 6.2% in 2014-19 than in 2011-14. As a consequence, it lowers a level of
infrastructure development.
10. other factors of slowdown are US-china trade war, High rate of GST, low saving,
decreasing in Indian exports etc.
11. Recession can be short-lived if corrective actions are taken immediately- indias actions
were- government revised GST for automobile sector, opened up FDI in manufacturing
sector, recapitalization of the banking sector.
12. What to do- increase in investment in R&D sector, infrasturacture sector, optimum
use of available funds, quality improvement in health and education sector, Structural
changes will lead economy to potential areas of economy, this can make economy's
slowdown period shorter.
Impact on Nepal
1. Situation- Nepal as a satellite economy of India, Nepali rupees is pegged with indian
currency, Nepal share 1800KM long open border, 27 trading points with India, free flow
of people both sides. And, In FY2019, Export and import of Nepal with india was 63Million
and 918 billion, which is 64.6% and 64.7% respectively, more than 90% of Nepal's
international trade goes through india.
2. In such situation, effects of slowdown of India’s economy influences Nepali economy-
It can give direct effect of exchange rate of Nepali currency, it will puts additional pressure
on the import-dependent economy, increase in trade deficit, low paid Nepalis workers
may face lay-offs.
3. Nepal get heated with the cooling of India’s economy.
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