iam a student of economics and i have keen interests in all economic matters. i have a doubt, to which i haven been able to get ant concrete reply. the question is "
i keep hearing abt the term "economy having strong fundamentals". i want to know what this means. what ido know is , that when an economy has strong fundamentals , it is not affected by external problems. that is, no matter how bad or good the other countries economies and their trends , the economy with strong fundamental is little of not affected by them.
but, what are the factors which make an economy strong fundamnetally?
2006-08-17 18:06:25 · 5 answers · asked by aryan_vikas2000 2 in Social Science ➔ Economics
Interesting question, and I feel that most people look too far to find answers to this question (it was fairly common in my classes).
Here is a definition that should help you:
They are these: growth, inflation, employment, productivity
It is important to note that many people believe that the governments regulation and support of the free market system may also be considered part of the strong fundamentals you are asking about.
Read the link below and look for the section called "maintaining strong economic fundamentals.
2006-08-17 18:20:14 · answer #1 · answered by TheSilence 1 · 1⤊ 0⤋
Following factors are considered while deciding soundness or otherwise of an economy :
1) Healthy banking sector
2) Infrastructure such as transportation, communication , insurance, etc sufficient for growth and development
3) Items (Agro or industrial ?) and quantity of exports
4) Quality (ie health, education etc) of human resources
5) Foreign exchange reserves (quantity and quality)
6) Shock sustaining capacity on account of external and internal factors
7) Natural resources such as minerals, water, natural ports, climate etc
8) Rate of inflation (should be moderate)
9) Rate of economic growth
10) Share of industry in national income
2006-08-17 18:38:12 · answer #2 · answered by KANGO 2 · 0⤊ 0⤋
low inflation, not too much government regulation, innovative technology, and an eduated workforce are some of the msot important things in determining good fundamentals
2006-08-17 18:27:56 · answer #3 · answered by C_Millionaire 5 · 0⤊ 0⤋
Fort knox is pritning more money to cover ther butt> :-)
2006-08-17 18:11:50 · answer #4 · answered by Anonymous · 0⤊ 0⤋
political dicisions make it
2006-08-17 23:15:36 · answer #5 · answered by Manjunath P 1 · 0⤊ 0⤋