Do you think that the economic stimulus will revive the economy?

D

deepakraam

Deepak Narayanan
Obama Govt has passed a stimulus package worth around $800billion to revive the US economy.Indeed a bill of this size is needed in this current scenario.but ppl are not willing to spend even $1 they have got unless it is absolutely needed.This is good in one sense but in other way that the spending cycle will get affected.So in this juncture,do you think the current stimulus plan will revive the economy?

-Deepak.
 
As the exchange controls have been loosened, in India also some of the big corporates are booking and canceling forward contracts and at times the same borders on speculative activity.
 
• Merchant Transaction
When authorized dealers buy/sell foreign exchange from/to exporter/importers and other customers then it’s called a merchant transaction. This transaction can be undertaken only on account of genuine exposure of the customers and speculation is prohibited. These merchant can book, re-book, cancel forward contracts with Authorised Dealers with respect to their genuine foreign exchange exposure. This facility was available to residents only. However, RBI has loosened the grip further and allowed NRIs/FIIs also to book forward contract for certain accounts/investments by them in India.
 
• Inter-Bank Transaction
When one bank deals with another bank i.e. buys/sells foreign exchange, it is known as inter bank dealing. The banks in India are allowed to deal freely amongst themselves. Most of the banks are not market makers and rather they are market users
 
After introduction of Modified Liberalized Exchange Rate Management System (Modified LERMS) and on account of amendment to Section 40 of RBI Act, 1934, RBI is not obliged to sell foreign exchange but buys foreign exchange offered to it buy A Ds at
 
necessary and it intervenes in its wisdom it deems fit. In fact RBI has been buying foreign exchange when there was excess supply in the market. RBI has also been intervening in the market through Spot, Forward & Swaps quite often after the Rupee started floating, so called, freely.
 
its a game of demand and supply...i think until and unless people don't understand the importance of demand; no stimulus package can revive the economy..Remember 1929 the great depression,analysts predict that this is going to be worse..At that time a brand new car was bought for 45 $ because there were no buyers..
 
according to me this stimulus package will help in reviving the economy but only in long term..... this recession has taught the people all over world ... the importance of savings..... so in the near future even if there wil be purchasing power in the economy people will prefer to save their income....
 
As the exchange controls have been loosened, in India also some of the big corporates are booking and canceling forward contracts and at times the same borders on speculative activity.
 
Yes, I do think that the economic stimilus that the government is to provide would lend a helping hand in reviving the country's economy. Its the governments responsibility to look after the firms as they are the one who provide the government with foreing exchange. Giving economic stimilus would also remove the danger of sacking employees. The money would take the country to considerable heights.:SugarwareZ-286:
 
difinitely the $800 billion package will boost d economy specially the manufacturing sectors...considering the fact they are goin through turbulent times...however
one must mention..dat economy runs in a cycled manner i.e. when economy revives people will have jobs and when people will earn they will spend of sure...!!!
 
yes economic stimulus will help in reviving economy. In simple terms we can say when govt. inject money i.e. it spends money in different sectors. This will create job opportunities in economy thus increasing the income level. Once people have money they will start spending and thus demand in the market for goods will increase obviously. This will in turn increase the esupply and help in reviving economy
 
You must log in or register to reply here.
Back
Top