Global Business Environment Assignment Example | Topics and Well Written Essays - 1000 words

spheric Business Environment - Assignment ExampleThis report will look at the different measures a country can take in such instances.There is essentially no simple scheme alone to prevent recession in a country. There are a number of federal agent at play which further complicates the problem of recession in a country. Like after valet economic crisis in 2008, country like India faced many challenges with respect to its economic policies. India has high ostentatiousness drift along with soaring high interest rate. Keeping in mind the strong basic principle in India, run batted in took a number of measures to control recession in India. rbi plays a large role by controlling and monitoring the lending rates of scheduled commercial banks. The inflation rate in any economy is dependent on the availability of goods and services. RBI uses its monetary and credit tools to agree the price stability in the economy and thus support the economic growth in the economy. RBI being the c entral bank of India, monitors, regulates and controls the entire financial system. RBI through its monetary polity regulates the exit of bank notes so as to maintain proper liquidity in the system (Schwartz, 2010, p. 7). The monetary polity adopted by RBI can be either expansionary or contractionary in nature. RBI uses expansionary policy during deep recession. When RBI finds excess liquidity in the system, RBI uses several monitory instruments like gold reserve proportion, Statutory Liquidity Ratio, Repo Rate, Reverse Repo rate to adjust liquidity in the economy. During deep recession, RBI needs to inject liquidity in the system so that money can flow in the system and demand improves and consequently GDP improves. For that RBI can reduce Cash reserve ratio or Statutory Liquidity Ratio. This will inject more cash in the hands of marge which Banks can lend to the customers and inject liquidity in the system (Hershey, 2004, p. 13). The main priority should be assumption to sma ll scale industries as they are the main employment