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SESSION-I
Domain
Training or
Placement
- BY DR. SHIKTA SINGH
- KSOM,KIIT UNIVERSITY
JAB WE MET- 1st Phase-
THE PHASE-II TO AN ONLINE MODE
STRUCTURE OF THE SESSION
A FLASH BACK TO WHAT WE HAVE LEARNT
SECTION 1
SECTION 2
ISSUES GOING AROUND- ALL OVER VIS-À-VIS INDIA
SECTION 3
SECTION 4
OPEN FOR DISCUSSION
SECTION 5
MAKING A REALITY CHECK OF WHAT IS GOING
PLAUSIBLE QUESTIONS BY INTERVIEWER
KEY TERMS
Microeconomics: That field that deals with the small-scale activities such as
that of the individual or company.
Macroeconomics: The study of the entire economy in terms of the total amount
of goods and services produced, total income earned, the level of employment
of productive resources, and the general behavior of prices
Macroeconomists study aggregated indicators such as GDP,
unemployment rates, and price indices to understand how the
whole economy functions.
Macroeconomists develop models that explain the
relationship between such factors as national income, output,
consumption, unemployment, inflation, savings, investment,
government spending and international trade.
Though macroeconomics encompasses a variety of concepts
and variables, but there are three central topics for
macroeconomic research on the national level: output,
unemployment, and inflation.
Macroeconomics is a branch of economics that focuses on the behavior and decision-
making of an economy as a whole.
And the mismatch
creating problems
Aggregate supply: The
total demand for final
goods and services in the
economy at a given time
and price level
Aggregate demand:
The total demand for
final goods and services
in the economy at a
given time and price
level.
Circular flow mechanisms
Role of market
& financial
system
An economy which relies primarily on interactions between
buyers and sellers to allocate resources is known as a market
economy.
Markets work by placing many interested buyers and
sellers, including households, firms, and government
agencies, in one “place,” thus making it easier for them to
find each other
Healthy financial systems are associated with the
accelerated development of an economy.
Role of Central bank,
Commercial bank, NBFCs.
KEY TERMS
M0,M1,M2,M3,M4 Money Multiplier Credit Multiplier
The Business Cycle
The term “business cycle” (or economic cycle or boom-bust cycle) refers
to economy-wide fluctuations in production, trade, and general
economic activity. From a conceptual perspective, the business cycle is
the upward and downward movements of levels of GDP (gross domestic
product) and refers to the period of expansions and contractions in the
level of economic activities (business fluctuations) around a long-term
growth trend.
Business cycles are
identified as having four
distinct phases: expansion,
peak, contraction, and
trough.
Business cycle fluctuations
occur around a long-term
growth trend and are usually
measured by considering the
growth rate of real gross
domestic product.
In the United States, it is
generally accepted that the
National Bureau of
Economic Research (NBER)
is the final arbiter of the
dates of the peaks and
troughs of the business
cycle.
 Different phases of business cycle-
KEY TERMS
Expansion: The act or
process of expanding.
Trough: The lowest turning
point of a business cycle
Peak: The highest value
reached by some quantity in a
time period.
Contraction: A period of economic
decline or negative growth.
Macroeconomic indicators such as GDP (Gross Domestic Product), employment, investment spending, capacity
utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate
rise.
Most mainstream economists believe that recessions are caused by inadequate aggregate demand in the
economy, and favor the use of expansionary macroeconomic policy during recessions.
Strategies favored for moving an economy out of a recession vary depending on which economic school the
policymakers follow.
KEY POINTS
Recession: A period of
reduced economic
activity
Inflation: A period of
increased economic
activity
INFLATION AND ITS MEASURES
HEADLINE INFLATION CORE INFLATION
ITS A MEASURE OF TOTAL INFLATION WITHIN
AN ECONOMY INCLUDING COMMODITY SUCH
AS FOOD AND ENERGY PRICES (e.g, OIL AND
GAS ) WHICH TENDS TO BE MORE VOLATILE
AND PRONE TO INFLATIONARY SPIKES.
IT CONSIDERS THE PRICE OF ALL GOODS AND
SERVICES EXCEPT COMMODITY PRICES ( LIKE
PRICE OF FRUITS AND VEGETABLES,FRUITS
ETC) AND OIL PRICES.
GOODS SERVICES
HEADLINE
INFLATION
ALL
ITEMS
OF CPI
FOOD
AND
EMERGY
CORE
INFLATION
CPI
FOOD,
BEVERAGES AND
TOBACCO
Cereals and Products
Pulses and products
Oils and fats
Milk, egg, fish and meat
Fuel and light
Housing
Clothing, bedding and
software
Misc.
Education , stationery
Med and personal care
Amusement , transport and
communication
Sugar and species
MFG Chemical Metal food
PRIMARY Food Non-food Mineral
FUEL Oil Electricity Coal
WPI Components WEIGHT
TOP 3 SUB-WEIGHT (Decreasing)
WPI
And its
Component
POLICY RESPONSES
If the economy needs to be slowed, enacted policies are referred to as being contractionary
and if the economy needs to be stimulated the policy prescription is expansionary.
Central banks use monetary policy measures to facilitate consistent economic
growth, while the government uses fiscal policy.
The government policy measures are referred to as fiscal policy.
When to go for expansionary and contractionary policy mechanism.
FISCAL
POLICY
• : Government policy that attempts to influence the
direction of the economy through changes in
government spending or taxes.
MONETARY
POLICY
• The process by which the central bank, or
monetary authority manages the supply of
money, or trading in foreign exchange markets.
Key Terms
https://economictimes.indiatimes.com/wealth/personal-finance-news/rbi-monetary-policy-what-the-rate-cut-means-for-your-mon
https://economictimes.indiatimes.com/markets/stocks/news/rbi-press-conference-another-2-bn-sell-buy-swap-1-lk-cr-ltro-announ
MONETARY POLICY
QUANTITATIVE QUALITATIVE
CRR/SLR= 3%/18.25%
LTRO/TLTRO-
1/TLTRO-2
REPO=
4.00%
REVERSE
REPO= 3.35%
MSF=
4.25%
MARGIN
REQUIREMENT
CREDIT
RATIONING
MORAL
SUASION
DIRECT ACTION
Bank rate=
Fiscal Policy
Discretionary
Non Discretionary
Expansionary
Contractionary
Raise Govt.
Expenditure
Lower taxes
Lower govt
expenditures
Raise Taxes
Government
expenditure
Taxes
Transfer payments
Progressive taxes
Measuring Fiscal Deficit
Economics- Deficit calculated .xlsx
BUDGETARY DEFICIT
– Revenue Deficit = Rev Exp – Rev Receipts
– Capital Deficit = Capital Exp – Capital Receipts
– Budgetary Deficit = Total Expenditure – Total Revenue
– Gross Fiscal Deficit = Total Expenditure – Total Receipts excluding Borrowings
(this implies the overall borrowing requirement of the Govt.
– Primary Deficit = Gross Fiscal Deficit – Interest
– Twin Deficit
EXCHANGE RATE
MECHANISM
ATTRIBUTES
DRIVERS
DYNAMIC
SPECULATIVE ARBRITAGE
HEDGING
FIXED
FLEXIBLE
MANAGED
SPOT
FORWARD
DUAL
INTEREST
RATES
ECONOMIC
CONDITION
TRADE
EFFECTS
BUSINESS
CYCLE
MARKET
SECTION-II
CHECKING INTO THE REALITIES
THE INDIAN ECONOMY OUTLOOK
Higher inflation unlikely to
deter MPC action
– Even though CPI inflation remains above the MPC’s upper limit of 6%, much of
the increase has been led by higher fuel and gold prices. Food inflation has
started to normalize with the easing of supply disruptions. With inflation
expected to moderate below 4% in 2HFY21, we continue to expect additional
25-35 bps of repo rate cuts given the sharp deceleration in growth. Further
action remains contingent on the evolution of the growth-inflation mix.
CPI inflation moderates to a
three-month low (recent report)
June CPI inflation moderated to 6.09% as against 6.27% in May amid favorable base effects
despite increasing momentum .
The softening was led by lower food inflation of 7.9% (9.2% in May) owing to moderation
observed across vegetables (1.9% from 5.5% in May), fruits ((-)0.7% from 2% in May), and sugar
and confectionary (4.4% from 6% in May) . Price of pulses, milk and eggs remain firm, even
though the pace somewhat moderated. Meanwhile, fuel and light inflation rose to 2.7% (1.6% in
May).
Sequentially, CPI inflation went up by 0.5% MOM led by a 1.8% rise in fuel and light prices,
reflecting the surge in LPG prices. Food inflation also went up by 0.3% MOM led by a sequential
rise of 1.7% in vegetable prices. Price of fruits, pulses and cereals, however, fell by 2.4%, 1% and
0.5%, respectively.
We note that the government used a different methodology to arrive at the inflation estimates of
April and May due to the non-availability of data due to the nationwide lockdown.
Core inflation at a 16-month
high
Even though economic activity remains weak, core inflation rose to 5.2% (4.8% in May) owing to
higher inflation in the personal care segment (12.4%) and in the transport and communication
segment (7.1%). Higher gold prices along with the pass-through of the excise duty hikes on petrol and
diesel were the major contributors to core inflation.
Inflation across education, recreation and amusement, and health came in at 5.5%, 3%, and 4.2%,
respectively.
On a sequential basis, core inflation grew by 0.3%, owing to a 2.2% increase in the personal care
segment and 0.8% increase in the transport and communication segment. Expectedly, owing to
concerns about the spread of Covid-19 and the lockdowns, inflation across recreation and
amusement, and household goods and services witnessed sequential declines of 2% and 1.4%,
respectively. Meanwhile, rural and urban CPI inflation are broadly moving in tandem .
Rural core inflation was at 5%, and urban core inflation was at 5.1%
SECTION-III
Real GDP
Growth
TRADE HAS BEEN LOSING STEAM FOR A LONG TIME
SOURCE: WTO
FISCAL MEASURES
SECTION IV- INTERVIEW
BASED QUESTIONS
SECTION-V
OPEN FOR DISCUSSION
KEEP
READING
THANK YOU.. WISH YOU A GREAT CAREER AHEAD

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Domain training economics

  • 1. SESSION-I Domain Training or Placement - BY DR. SHIKTA SINGH - KSOM,KIIT UNIVERSITY
  • 2. JAB WE MET- 1st Phase-
  • 3. THE PHASE-II TO AN ONLINE MODE
  • 4. STRUCTURE OF THE SESSION A FLASH BACK TO WHAT WE HAVE LEARNT SECTION 1 SECTION 2 ISSUES GOING AROUND- ALL OVER VIS-À-VIS INDIA SECTION 3 SECTION 4 OPEN FOR DISCUSSION SECTION 5 MAKING A REALITY CHECK OF WHAT IS GOING PLAUSIBLE QUESTIONS BY INTERVIEWER
  • 5. KEY TERMS Microeconomics: That field that deals with the small-scale activities such as that of the individual or company. Macroeconomics: The study of the entire economy in terms of the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the general behavior of prices
  • 6. Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions. Macroeconomists develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, investment, government spending and international trade. Though macroeconomics encompasses a variety of concepts and variables, but there are three central topics for macroeconomic research on the national level: output, unemployment, and inflation. Macroeconomics is a branch of economics that focuses on the behavior and decision- making of an economy as a whole.
  • 7. And the mismatch creating problems Aggregate supply: The total demand for final goods and services in the economy at a given time and price level Aggregate demand: The total demand for final goods and services in the economy at a given time and price level. Circular flow mechanisms
  • 8. Role of market & financial system An economy which relies primarily on interactions between buyers and sellers to allocate resources is known as a market economy. Markets work by placing many interested buyers and sellers, including households, firms, and government agencies, in one “place,” thus making it easier for them to find each other Healthy financial systems are associated with the accelerated development of an economy. Role of Central bank, Commercial bank, NBFCs.
  • 9. KEY TERMS M0,M1,M2,M3,M4 Money Multiplier Credit Multiplier
  • 10. The Business Cycle The term “business cycle” (or economic cycle or boom-bust cycle) refers to economy-wide fluctuations in production, trade, and general economic activity. From a conceptual perspective, the business cycle is the upward and downward movements of levels of GDP (gross domestic product) and refers to the period of expansions and contractions in the level of economic activities (business fluctuations) around a long-term growth trend.
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  • 12. Business cycles are identified as having four distinct phases: expansion, peak, contraction, and trough. Business cycle fluctuations occur around a long-term growth trend and are usually measured by considering the growth rate of real gross domestic product. In the United States, it is generally accepted that the National Bureau of Economic Research (NBER) is the final arbiter of the dates of the peaks and troughs of the business cycle.  Different phases of business cycle- KEY TERMS Expansion: The act or process of expanding. Trough: The lowest turning point of a business cycle Peak: The highest value reached by some quantity in a time period. Contraction: A period of economic decline or negative growth.
  • 13. Macroeconomic indicators such as GDP (Gross Domestic Product), employment, investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise. Most mainstream economists believe that recessions are caused by inadequate aggregate demand in the economy, and favor the use of expansionary macroeconomic policy during recessions. Strategies favored for moving an economy out of a recession vary depending on which economic school the policymakers follow. KEY POINTS Recession: A period of reduced economic activity Inflation: A period of increased economic activity
  • 14. INFLATION AND ITS MEASURES
  • 15. HEADLINE INFLATION CORE INFLATION ITS A MEASURE OF TOTAL INFLATION WITHIN AN ECONOMY INCLUDING COMMODITY SUCH AS FOOD AND ENERGY PRICES (e.g, OIL AND GAS ) WHICH TENDS TO BE MORE VOLATILE AND PRONE TO INFLATIONARY SPIKES. IT CONSIDERS THE PRICE OF ALL GOODS AND SERVICES EXCEPT COMMODITY PRICES ( LIKE PRICE OF FRUITS AND VEGETABLES,FRUITS ETC) AND OIL PRICES. GOODS SERVICES HEADLINE INFLATION ALL ITEMS OF CPI FOOD AND EMERGY CORE INFLATION
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  • 17. CPI FOOD, BEVERAGES AND TOBACCO Cereals and Products Pulses and products Oils and fats Milk, egg, fish and meat Fuel and light Housing Clothing, bedding and software Misc. Education , stationery Med and personal care Amusement , transport and communication Sugar and species
  • 18. MFG Chemical Metal food PRIMARY Food Non-food Mineral FUEL Oil Electricity Coal WPI Components WEIGHT TOP 3 SUB-WEIGHT (Decreasing) WPI And its Component
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  • 21. POLICY RESPONSES If the economy needs to be slowed, enacted policies are referred to as being contractionary and if the economy needs to be stimulated the policy prescription is expansionary. Central banks use monetary policy measures to facilitate consistent economic growth, while the government uses fiscal policy. The government policy measures are referred to as fiscal policy. When to go for expansionary and contractionary policy mechanism.
  • 22. FISCAL POLICY • : Government policy that attempts to influence the direction of the economy through changes in government spending or taxes. MONETARY POLICY • The process by which the central bank, or monetary authority manages the supply of money, or trading in foreign exchange markets. Key Terms https://economictimes.indiatimes.com/wealth/personal-finance-news/rbi-monetary-policy-what-the-rate-cut-means-for-your-mon https://economictimes.indiatimes.com/markets/stocks/news/rbi-press-conference-another-2-bn-sell-buy-swap-1-lk-cr-ltro-announ
  • 23. MONETARY POLICY QUANTITATIVE QUALITATIVE CRR/SLR= 3%/18.25% LTRO/TLTRO- 1/TLTRO-2 REPO= 4.00% REVERSE REPO= 3.35% MSF= 4.25% MARGIN REQUIREMENT CREDIT RATIONING MORAL SUASION DIRECT ACTION Bank rate=
  • 24. Fiscal Policy Discretionary Non Discretionary Expansionary Contractionary Raise Govt. Expenditure Lower taxes Lower govt expenditures Raise Taxes Government expenditure Taxes Transfer payments Progressive taxes
  • 25. Measuring Fiscal Deficit Economics- Deficit calculated .xlsx
  • 26. BUDGETARY DEFICIT – Revenue Deficit = Rev Exp – Rev Receipts – Capital Deficit = Capital Exp – Capital Receipts – Budgetary Deficit = Total Expenditure – Total Revenue – Gross Fiscal Deficit = Total Expenditure – Total Receipts excluding Borrowings (this implies the overall borrowing requirement of the Govt. – Primary Deficit = Gross Fiscal Deficit – Interest – Twin Deficit
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  • 43. Higher inflation unlikely to deter MPC action – Even though CPI inflation remains above the MPC’s upper limit of 6%, much of the increase has been led by higher fuel and gold prices. Food inflation has started to normalize with the easing of supply disruptions. With inflation expected to moderate below 4% in 2HFY21, we continue to expect additional 25-35 bps of repo rate cuts given the sharp deceleration in growth. Further action remains contingent on the evolution of the growth-inflation mix.
  • 44. CPI inflation moderates to a three-month low (recent report) June CPI inflation moderated to 6.09% as against 6.27% in May amid favorable base effects despite increasing momentum . The softening was led by lower food inflation of 7.9% (9.2% in May) owing to moderation observed across vegetables (1.9% from 5.5% in May), fruits ((-)0.7% from 2% in May), and sugar and confectionary (4.4% from 6% in May) . Price of pulses, milk and eggs remain firm, even though the pace somewhat moderated. Meanwhile, fuel and light inflation rose to 2.7% (1.6% in May). Sequentially, CPI inflation went up by 0.5% MOM led by a 1.8% rise in fuel and light prices, reflecting the surge in LPG prices. Food inflation also went up by 0.3% MOM led by a sequential rise of 1.7% in vegetable prices. Price of fruits, pulses and cereals, however, fell by 2.4%, 1% and 0.5%, respectively. We note that the government used a different methodology to arrive at the inflation estimates of April and May due to the non-availability of data due to the nationwide lockdown.
  • 45. Core inflation at a 16-month high Even though economic activity remains weak, core inflation rose to 5.2% (4.8% in May) owing to higher inflation in the personal care segment (12.4%) and in the transport and communication segment (7.1%). Higher gold prices along with the pass-through of the excise duty hikes on petrol and diesel were the major contributors to core inflation. Inflation across education, recreation and amusement, and health came in at 5.5%, 3%, and 4.2%, respectively. On a sequential basis, core inflation grew by 0.3%, owing to a 2.2% increase in the personal care segment and 0.8% increase in the transport and communication segment. Expectedly, owing to concerns about the spread of Covid-19 and the lockdowns, inflation across recreation and amusement, and household goods and services witnessed sequential declines of 2% and 1.4%, respectively. Meanwhile, rural and urban CPI inflation are broadly moving in tandem . Rural core inflation was at 5%, and urban core inflation was at 5.1%
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  • 59. TRADE HAS BEEN LOSING STEAM FOR A LONG TIME SOURCE: WTO
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  • 68. KEEP READING THANK YOU.. WISH YOU A GREAT CAREER AHEAD