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  • Artificial Intelligence: Boon or Curse? by Prachi Saswade | Podar Eduspace

    < Back Artificial Intelligence: Boon or Curse? by Prachi Saswade Artificial Intelligence is used in almost every sector in the world today, extensively in the business world. There are many discussions about the impact of AI, both positive and negative. Introduction Artificial Intelligence (AI) is a term that has been floating around for a couple of decades. The definition of AI has been evolving, but the most widely accepted was given by John McCarthy in 2004, in his paper, What is Artificial Intelligence? : “It is the science and engineering of making intelligent machines, especially intelligent computer programs. It is related to the similar task of using computers to understand human intelligence, but AI does not have to confine itself to methods that are biologically observable”. The definition of AI has multiple approaches, but remain in line with the word, “intelligence”, specifically intelligence that is akin to that of humans. However, in the widely renowned authority in the field, Stuart Russell’s textbook, Artificial Intelligence: A Modern Approach , states that, "AI is concerned mainly with rational action. An ideal intelligent agent takes the best possible action in a situation” (Russell & Norvig, 2021). The multiple mentions of “intelligence" and “rationality” date back to Alan Turing, who in his 1950 paper, Computing Machinery and Intelligence , asked the question, “Can machines think?”. This was succeeded by the infamous “Turing test”. This paper started the conversation about AI, and while the test has been controversial over the years, it is an important part of the AI history. Shortly after Turing’s paper, John McCarthy coined the term “Artificial Intelligence” during the first AI conference held at the Dartmouth College, New Hampshire, United States. In the same year, Allen Newell, J.C. Shaw, and Herbert Simon, created the first ever running AI program, called the Logic Theorist . About a decade later, Frank Rosenblatt built the Mark 1 Perceptron , a computer based on neural networks that learn through “trial and error”. The 1980s saw a rise in the usage of the back-propagation algorithm that allowed the neural network to train itself. These networks were then used in AI applications. Soon after, in a historical feat by IBM, “IBM's Deep Blue beats then world chess champion Garry Kasparov, in a chess match (and rematch)” (IBM Education, 2020). AI has evolved through multiple trials, and based on the concept of applying human-like intelligence and rationality to computer decision making. The many industries working in the field have seen the massive adoption of the technology and continue their research on making it more and more “human” each day. Level of Involvement of AI in our Daily Life Artificial Intelligence has crawled into our lives and has become an integral part of it. AI is used in multiple fields in the present day that many-a- times we are not even aware that AI is being used there. Currently AI is being used all around the globe day and night. Forbes created a list of ten examples of how AI is used in its article, The 10 Best Examples Of How AI Is Already Used In Our Everyday Life . The list includes, technologies like FaceID, social media, digital voice assistants, etc. Starting with the most basic one, unlocking your phone. Apple’s FaceID technology uses artificial intelligence and 3D scanning to register the user’s face demographics. “It then uses machine learning algorithms to compare the scan of your face with what it has stored about your face to determine if the person trying to unlock the phone is you or not” (Marr, 2019). Continuing on the same spectrum, social media uses AI to curate each user’s feed based on their history of liked posts, and engagement to certain content. The machine learning algorithms also aid in filtering out false news and content that multiple users have engaged with. Engagement with content requires the accompanying text to be written well, this requires tools such as Grammarly. Grammarly uses AI and natural language processing to ensure that its users focus on writing and leave the grammar to Grammarly. This technology is being used for professional emails, and any other writing that a user might require. Many smart homes are in trend now and the the vital component of these smart homes are smart home devices like Alexa, Google Assistant, and HomePod. These smart devices use AI to to keep learning from the user’s usage patterns. Amazon recommendations is one of the more well known AI technology. Based on the user’s past order history, and searches, the recommendations for products are personalised. Along the same lines, Netflix uses AI and the past viewing history in the same way. Netflix is known for its spot-on personalised TV show and films recommendations for its consumers. Lastly, “Google maps and other travel apps use AI to monitor traffic to give you real-time traffic and weather conditions as well as suggest ways to avoid gridlock” (Marr, 2019). Many car companies now have an in-built mapping system in the cars and this further allows the user to commute with ease. The AI technology is only growing more and more each day, and is being integrated into our lives rapidly. It is only time before every commodity we use will have some enhancements made to it to accommodate artificial intelligence. Various Approaches to integrate AI seamlessly Approaches to AI has a different connotation in the setting that it is being used in. For example, approaches to that drive AI research includes – cybernetics, symbolic and sub-symbolic approaches, as well as, the statistical approach (Milošević, 2013). At the same time when one talks about integrating AI into business, the approaches change from concrete terms to an instruction manual, almost all ending with the advice to “start small”. In the general context, however, we have four main approaches to AI – reactive machines, limited memory, theory of mind, and self-awareness. These four approaches are based on the behaviour of the machines that will use AI. Reactive Machines The most basic AI systems are based on reactivity only. These machines often are good at predictions based on a certain set of rules, games such as chess. These machines only “react” to a situation, with no meaning of the past. They have no memory of the past, and only works in the present moment. IBM’s Deep Blue, the chess-playing computer is a notable example of this approach. “Deep Blue can identify the pieces on a chess board and know how each moves. It can make predictions about what moves might be next for it and its opponent. And it can choose the most optimal moves from among the possibilities” (Hintze, 2016). This means, Deep Blue only processes the chess pieces in front of it at present and chooses its next move. It does not look back for any previous references. AI researcher Rodney Brooks, in his paper argues that all machines should be built on this system. His reasoning for this was that the programming for such stimulated worlds was often not accurate enough and did not provide a valuable “representation” of the world (Brooks, 1991). Reactive machines can be “easily fooled” because they have no concept of the world outside of the rules they are set within. These machines however, can prove to be extremely impartial as they only react to what is presented to them in real-time. This suggests that might prove to trustworthy due to lack of emotional engagement. Limited Memory The limited memory machines are considered the Type II class machines. These machines have an ability to look into the past. The best example of this is seen in self-driving cars. Self-driving cars require the programmed world to have representations that are pre-programmed, such as traffic rules, or routes in the city, etc. These are also included when the car has to change its lane and avoid an accident. “But these simple pieces of information about the past are only transient. They aren’t saved as part of the car’s library of experience it can learn from, the way human drivers compile experience over years behind the wheel” (Hintze, 2016). It has been noted by both Brooks, and Hintze that it is difficult to build AI systems that are full of representations, as well as, remember experiences and learn how to tackle newer situations. Hintze has applied the Darwinian evolution to his research to let machines build their own representations. Theory of Mind “[Theory of mind is] skill that involves the ability to think about mental states, both your own and those of others” (Cherry, 2021). This psychological concept introduces the next class of machines. These machines are far more advanced and as the theory of mind suggests, form representations of not only the world, but also about other participants or agents that exist within it. The example of this would be Sophia, the AI robot. As one see, Sophia can not only answer questions, but connect to various entities around her. Self-awareness Self-awareness is the last approach to AI systems. This system is the most advances class of machines, wherein, the machines can build representations about themselves. Many researchers are looking to build AI systems that have a consciousness, not just understand it. This is a step up from the theory of mind, as here, the machines will be able to make inferences about other entities in the same way human rational thinking does. According to Hintze, “we are probably far from creating machines that are self-aware, we should focus our efforts toward understanding memory, learning and the ability to base decisions on past experiences” (Hintze, 2016). This however, does not dampen the possibility that we might live in a world where AI systems will be advanced enough to have a consciousness. Impact of AI and its Major Benefits Artificial Intelligence is used in almost every sector in the world today, extensively in the business world. There are many discussions about the impact of AI, both positive and negative. The impact of AI has brought on multiple questions, especially ones around employment of labour. In his paper, The Forthcoming Artificial Intelligence (AI) Revolution: Its Impact on Society and Firms , Spyros Makridakis discusses the impact of AI on developing countries. According to him, this revolution will be more “pronounced” in the developing states for two reasons. Firstly, the use of machinery will replace the skilled and unskilled labour, this will result in foreign (developed) countries to remove their investments in the still developing countries. Secondly, “developing countries will be at a disadvantage by not being able to invest in expensive AI technologies, particularly since such technologies will reduce the demand for human labour thus further increasing unemployment” (Makridakis, 2017). To solve this, Makridakis suggests that “[educating] their young people in AI technologies and by doing so become able to attract investments from abroad as well as manage to exploit the “sharing economy” (Makridakis, 2017). However, he also emotions that his might prove to be very difficult. The impact of AI will soon be seen in almost every factory across the globe, but in order for everyone to adopt the technology, the acceptance for it must be present. However, all of AI is not bad news. There are multiple benefits to AI technology. For starters, it helps for smarter business decisions. It can also help, in enhancing the customer experience, medical advances, research and data analysis, solving complex problems, among others ("Top 10 Benefits of Artificial Intelligence (AI) | 10xDS", 2020). AI is also great at minimising errors and completing repeated tasks. This is extremely beneficial for companies that use data mining for decision making, and other activities. One example of this would be the clickstream analytics. This technology is used by multiple social media apps, as well as, companies like Amazon. They use the data generated when the user visits the website of an advertised product or service. This data then uses AI to target similar ads to the consumer, which for companies like Amazon, leads to the consumer purchases. Another benefit seen in this field is use of AI in chatbots. Chat bots are present on almost every company’s website today, and these are often run by AI. The AI scans through the frequently asked questions to provide an answer to the user within seconds. This technology reduces the time and allows a filtration of questions sent to the (human) employee to answer. These chat bits are now being used by banks as well. This technology is evolving rapidly and steadily. The integration of AI into our lives is increasing by the day, and like most technology invented to date, will only serve to make our lives easier. That being said, one must not ignore the problems that it comes with. Associated Problems and Pitfalls AI has been a game changer in many sectors of the world. However, there have been many negatives attached to the technology. As mentioned before, one of the associated pitfalls is the impact the technology has on the developing countries. Other than that, there are multiple common challenges in AI such as, computational or hardware problems, lack of trust, lack of human-level experimental management, data security and privacy issues, and lastly the biases in the dataset. As the world moves on to work with AI, the hardware for such upgradation requires enough cores and GPUs to work efficiently. This can take a monetary toll on any small company that is just starting up. Moreover, any company that is planning to move to AI will have to consider their options and make financially beneficial decisions. The lack of trust stems from the unknown networks that deep learning uses to come to conclusions. The logic is still muddy and can cause a string of worry for the users. This also brings to light the “human experience” into play. Humans use experiential knowledge to make further decisions. While one can argue that AI does the same, human accuracy based on other factors (social, economic, and cultural) is far greater. Data privacy and security have been in the spotlight, especially since the FaceBook privacy case. The data that deep and machine aligning models use comes from across the globe and is generated by a large volume of users. The company collecting the data needs to be trustworthy, and it goes without saying that many companies might not always have good intentions with their clientele’s data. Lastly, the issues of biased dataset. Unfortunately, a large portion of the data that the algorithms receive is biased. The bags may be based on religion, gender, or race. The data collected can also be biased in the way the algorithm is programmed, i.e.. the programmer or interpreter’s biases can come into play in these situations. These issues can seem daunting, especially for those who are new to this territory. However, AI algorithms can be created to reduce biases, and for this reason AI ethics exists. These ethical guidelines are followed around the world and reduce the negatives in this technology. Proposed Applications of AI in Coming Years AI has shaped the tech world, and given it a new form. According to IBM, AI advances would not be possible without a formula that contains three things: “the rise of big data combined with the emergence of powerful graphics processing units (GPUs) for complex computations and the re- emergence of a decades-old AI computation model—deep learning” ("The new innovation equation", n.d.). The future of AI will see these elements have a makeover. The rise of small data, and deep reasoning will be seen soon. According to the University of Southern California’s researchers, AI will change the entertainment industry, medicines, cybersecurity, vital tasks like help for the elderly, and transportation (Gammon, 2017). Netflix has been using AI and machine learning techniques for a while now, and it will only get better. The addition of more streaming platforms can revolutionise the entertainment industry in the near future. With the help of AI, “film studios may have a future without flops: Sophisticated predictive programs will analyze a film script’s storyline and forecast its box office potential” (Gammon, 2017). Additionally, a user can also ask these platforms to create “virtual actors” and make a custom movie right at home. A more personalised approach to medicine can be seen on the horizon. With genome sequencing technology already in boom, the medicines that a patient might need can be altered to the patient’s genome and provide for a more effective treatment. Moreover, AI will help health care analyse a patient’s health based on more factors like lifestyle, environment, and genes. The detection of any tumours, or diagnosing basic ailments will also be done by AI. Having a large volume of data generated by users of a certain application comes with the potential risk of hackers and data breaches. “There were about 707 million cybersecurity breaches in 2015, and 554 million in the first half of 2016 alone” (Gammon, 2017). According to USC, AI’s ability to self-learn and automate can be a fruitful solution to remain one step ahead of the hackers. This will ensure the security of billions of people across the globe. Security and safety are utmost important human values, but so is independence. Many elderly citizens around the globe struggle to do daily tasks, or often require someone keeping an eye on them. With the working culture, they are usually left to look after themselves. AI tools around their areas of living can provide for a monitor on their movement, as well as, help with reaching objects on a high shelf, and ensure the supply of nutritious food. Moreover, these tools could mow their lawns, and help with maintaining the general hygiene of their residence. Additionally, AI assistance can be extremely useful in tasks such as mining, firefighting, and handling dangerous materials. We are already seeing a rise in self-driven cars. However, in the future this might expand into the public transportation systems as well. These AI driven vehicles are often much safer than humans, as they never get distracted but he radio or the other passengers in the cars. These are just the proposed application of AI, and there definitely will be more as the days pass by. The importance of AI will just increase multi-fold and defining only a certain amount plausibilities of its future can prove to be limiting its true potential. Future Predictions – Boon or Curse AI has seen a slow burn for a while but is deemed to explode into every aspect of our lives soon. That being said, the question still remains, is Artificial Intelligence a boon or a curse? AI has more benefits than we can count, and like every technology ever invented, it is here to make our lives easier and better. AI has seen better healthcare, better production, and better decision making. One cannot argue that AI saves us from repetitive and ‘boring’ tasks form time to time. Additionally, its capacity to sift through large volumes of data, or big data, is unmatched. To repeat the same tasks but using only human workforce will take years. That being said, AI also comes with its own pitfalls. Relying on technology can make some people wary, especially with multiple security and data privacy issues. According to multiple people, AI still does not understand human values like privacy, and in many ways cannot match a human’s emotional and social intelligence. AI can only use the provided information and come to conclusions based on the algorithms provided by the programmer, and is quite redundant by itself, unlike humans. AI can only be more “like” humans, but cannot be completely “humane”. AI when looked at as a tool can provide for millions of possibilities, and that might be the best way to look at it. AI can be used for multiple mad- practices, and ethics can only get one so far. Ethics are important, and in order for every user of AI to implement and respect them, there need to be strict judicial laws across the globe to ensure the safety of the people. The technology is still evolving, and it might be wise to wait a little longer to categorise it as a “boon” or a “curse”. No technology can ever fit into only one category, each one comes with its own pros and cons. With AI, we might need to wait until we can see which one outweighs the other. Bibliography 1. McCarthy, J. (2007). What is artificial intelligence?. 2. Russell, S., & Norvig, P. (2021). Artificial intelligence: A Modern Approach (4th ed.). Pearson Education Limited. 3. Turing, A. M. (2009). Computing machinery and intelligence. In Parsing the turing test (pp. 23-65). Springer, Dordrecht. 4. IBM Education. (2020). What is Artificial Intelligence (AI)? . Ibm.com. Retrieved 28 June 2022, from https://www.ibm.com/cloud/learn/what-is- artificial-intelligence. 5. Marr, B. (2019). The 10 Best Examples Of How AI Is Already Used In Our Everyday Life . Forbes. Retrieved 28 June 2022, from https:// www.forbes.com/sites/bernardmarr/2019/12/16/the-10-best-examples-of- how-ai-is-already-used-in-our-everyday-life/?sh=205c28bf1171. 6. Milošević, N. (2013). Approaches to artificial intelligence . Inspiratron.org - Natural language processing, machine learning and cybersecurity. Retrieved 1 July 2022, from https://inspiratron.org/blog/ 2013/05/10/approaches-to-artificial-intelligence/. 7. Hintze, A. (2016). Understanding the Four Types of Artificial Intelligence . GovTech. Retrieved 1 July 2022, from https:// www.govtech.com/computing/understanding-the-four-types-of-artificial- intelligence.html. 8. Brooks, R. (1991). Intelligence without representation. Artificial Intelligence , 47 (1-3), 139-159. https://doi.org/10.1016/0004-3702(91)90053- m. 9. Cherry, K. (2021). Why the Theory of Mind Is Important for Social Relationships . Verywell Mind. Retrieved 1 July 2022, from https:// www.verywellmind.com/theory-of-mind-4176826. Artificial Intelligence (AI) – Boon or Curse? 17 10. Makridakis, S. (2017). The forthcoming Artificial Intelligence (AI) revolution: Its impact on society and firms. Futures , 90 , 46-60. https:// doi.org/10.1016/j.futures.2017.03.006 11. Top 10 Benefits of Artificial Intelligence (AI) | 10xDS . 10xds.com. (2020). Retrieved 2 July 2022, from https://10xds.com/blog/benefits-of- artificial-intelligence-ai/. 12. Vadapalli, P. (2021). Top 7 Challenges in Artificial Intelligence in 2022 | upGrad blog . upGrad blog. Retrieved 5 July 2022, from https:// www.upgrad.com/blog/top-challenges-in-artificial-intelligence/. 13. The new innovation equation . IBM Cognitive - What's next for AI. Retrieved 7 July 2022, from https://www.ibm.com/watson/advantage- reports/future-of-artificial-intelligence/ai-innovation-equation.html. 14. Gammon, K. (2017). 5 Ways Artificial Intelligence Will Change the World by 2050 . USC News. Retrieved 7 July 2022, from https:// news.usc.edu/trojan-family/five-ways-ai-will-change-the-world-by-2050/. Previous Next

  • Skill Development | Podar Eduspace

    New Programs Podar Eduspace launches the 6th cohort of the WorkEx Bootcamp Early Professionals Program 1st cohort successfully launches with a 30+ person batch Latest Developments Podar Eduspace launches flagship internship program First Podar Eduspace conversations talk given by Rajesh Wahi USIBC releases new report on studying professionals In collaboration with... Our Secret Sauce Business Learner Needs Input Output Business Learner Needs Awareness Experiences Sustainment Next Learning Cohort Social Connection Track Result/ROI Videos Alignment with Immediate Manager Social Connections Email Notifications 360 Feedback Self-Assessments Social Connections On-Demand Reinforcements Practical Assignments Cycle of Performance Improvement Unique Delivery Methodology Human Relations Principles Apps Videos Free Downloads Social Connections Individual Learning Maps 360 Follow-up Follow-up with Immediate Manager Carnegie Cloud Live Online WorkEx Bootcamp As your certified Self-Development Coach, I offer you unyielding support and perspective when you need to transcend your inner challenges and rise to your true potential. Take a look at my service and see how we can work together to achieve your health and wellness goals. Learn More Skill Development As your certified Self-Development Coach, I offer you unyielding support and perspective when you need to transcend your inner challenges and rise to your true potential. Take a look at my service and see how we can work together to achieve your health and wellness goals. Learn More Our Programs Nandini Bansal, WorkEx Bootcamp Cohort 2 Member Master's at XXX University ​ Testimonials Anshika Mittal, WorkEx Bootcamp Cohort 2 Member Master's in Statistics at Delhi University ​ Nandini Bansal, WorkEx Bootcamp Cohort 2 Member Master's at XXX University ​ Abhishek Jan WorkEx Bootcamp Cohort 2 Member Master's at OP Jindal University ​

  • EduTech - The New Age Education by Anoushka Sen | Podar Eduspace

    < Back EduTech - The New Age Education by Anoushka Sen EduTech is a developing industry in education, that has been propelled by the COVID-19 pandemic. Learn about the key players, untapped areas, impact, and future prospects of the industry. AREAS UNDER EDUTECH (DEFINITION OF EDUTECH) Educational technology is the combined use of computer hardware, software and educational theory and practice to facilitate learning in classrooms. When referred to with its abbreviation, EdTech, it is often referring to the industry of companies that create educational technology. EdTech is still in the early stages of its development, but it shows promise as a method of customizing a curriculum for a student’s ability level by introducing and reinforcing new content at a pace the student can handle. The goal of EdTech is to improve student outcomes, enhance individualized education, and reduce the teaching burden on instructors. While many praise technology in the classroom, others fear that it is impersonal and can lead to data collection and tracking of both students and instructors. Some areas under edutech include online learning platforms, virtual reality, mobile technology, youtube. In-classroom tablets, interactive projection screens and whiteboards, online content delivery, and MOOCs (Massive Open Online Courses) are all examples of EdTech. Learning methodology today typically covers a structured curriculum, interactive classes, labs, project work, and finally assessments. There are many users of edutech in the field of education like primary school, secondary school, higher education. Areas under edutech MOOCs IMPACT OF COVID-19 ON EDUTECH - NEED, ACCEPTABILITY EdTech has been around for nearly the last 15 plus years in a meaningful way. Technology has scaled to a level where everything happens seamlessly online and delivers a great learning experience and great outcomes. This era of EdTech is about the use of technology to highly personalize the learning experience, try new approaches, and to scale education in unimaginable ways. Present-day classrooms have moved beyond the clunky computers that were once the norm and are now tech-infused with tablets, interactive digital courses, and even robots that can take notes and record lectures for students who are not well and it looks like technology in the classroom is here to stay — the majority of teachers believe tech is going to have a major impact on the way they educate in the near future. The immense rise in EdTech users due to the nationwide lockdown has provided a significant push to the sector in India, which is relied upon to develop at a CAGR (Compound Annual Growth Rate) of 52% to having been turned into a 1.96 billion dollar industry by 2021. The key development drivers propelling EdTech in India are the capacity to serve a large audience at essentially lower costs compared to traditional classroom learning, critical growth in internet, Smartphone infiltration across India and steady growth in disposable income of the Indian families. The countrywide lockdown due to the pandemic led to the shutting down of schools and universities which saw the emergence of many EdTech platforms and services and a rise in adoption. The EdTech sector saw major investments and spending by governments, schools, universities, students, and professionals globally. While the growth has been tremendous, the industry suffers from challenges such as scaling up rationally, defeating infrastructure barriers, and retaining growth. Lockdown boosted innovation and investment in the EdTech Sector. There are around 4,450 EdTech start-ups operating in the nation presently catering various segments including K-12 (Kindergarten to 12th grade), vocational, and professional training/skilling and school/college educational operations. While the K-12 and competitive examination segment is ruled by Indian players, the international players are centered on reskilling, vocational preparation, and certifications. A lot of innovations have been tested within the Indian EdTech industry to balance the dynamics of teachers and students from a traditional classroom to a virtual one. Technology is turning teacher-driven education into a more teacher-student arrangement. Smart classrooms are making teaching transparent and equivalent for every student in a way close to the genuine classroom-like experience. Impact of Covid-19 on Edutech Need - The COVID-19 pandemic has changed education forever. The COVID-19 has resulted in schools shut all across the world. Globally, over 1.2 billion children are out of the classroom. As a result, education has changed dramatically, with the distinctive rise of e-learning, whereby teaching is undertaken remotely and on digital platforms. While countries are at different points in their COVID-19 infection rates, worldwide there are currently more than 1.2 billion children in 186 countries affected by school closures due to the pandemic. In Denmark, children up to the age of 11 are returning to nurseries and schools after initially closing on 12 March, but in South Korea students are responding to roll calls from their teachers online. Even before COVID-19, there was already high growth and adoption in education technology, with global EdTech investments reaching US$18.66 billion in 2019 and the overall market for online education projected to reach $350 Billion by 2025. Whether it is language apps, virtual tutoring, video conferencing tools, or online learning software, there has been a significant surge in usage since COVID-19. Acceptability - Covid-19 pandemic enabled EdTech to become leading sector for growth. With the emergence of EdTech, teachers and parents are adopting a more practical way of imparting knowledge. The EdTech industry went the extra mile to help students amid the ongoing Covid-19 pandemic. The increased adoption by institutions, professionals, parents, and students marks the growth. It has always existed, but its popularity and growth are in the news. India's shift to digital teaching in the past 10 months has been rapid. Since March 2020, the number of students learning online in India has increased dramatically. Schools, universities and educational institutions have moved online due to the lockdown and worry about Covid-19. In the past ten months, the user base of several EdTech platforms has doubled in both paid and free daily visitors. Adoption of EdTech tools and products by students, teachers, and institutes - While current classroom doors are closed in schools of all levels, the educational process has shifted online. Teachers whose lesson plans were designed for the analogue form had to adapt to this new digital environment in order to be effective and keep students learning. EdTech saw the major adoption of online self-based curriculums and online class management. Before Covid-19, educational technology had already seen tremendous development and acceptance with a variety of adoptions in educational institutions and at home, such as using visual aids, undertaking research, and creating online portals. Improved digital literacy, increased student engagement, automated grading, staying in touch 24X7, publishing and displaying student work, and personalising learning are just a few of the benefits. EdTech tools and platforms are thus giving educational institutions a tremendous opportunity to respond to the challenge and achieve a seamless transition from offline to online education. KEY PLAYERS IN INDIA India to become the Edtech Capital of the World EdTech funding focused on start-ups - Indian EdTech start-ups raised more than US$ 1.43 billion across 100 deals in 2020. The COVID-19 pandemic disruptions and subsequent lockdowns compelled both parents and educational institutions to implement tech-enabled learning solutions, making EdTech the most funded sector in the country. Of the total funding raised, Byju’s leads with 57%, followed by Unacademy (10.5%) and Vedantu (9.5%). Since 2020, India has seen four EdTech start-ups turn into unicorns (Unacademy, UpGrad, Eruditus and Vedantu) and one into a decacorn (Byju’s). A unicorn is a company valued over US$ 1 billion and decacorn is valued >US$ 10 billion. A hybrid EdTech industry - According to experts, players in the EdTech segment are expected to adopt a hybrid channel approach in the future. Online players are trying to establish offline touchpoints for students. For instance, EdTech decacorn Byju’s has piloted Byju’s Learning Centre, a new hybrid model, allowing students to visit offline education centres for classes. BYJU's is an Indian multinational educational technology company, headquartered in Bangalore. It was founded in 2011 by Byju Raveendran and Divya Gokulnath. as of December 2021, BYJU'S is valued at US$21 billion and has over 115 million registered students. Byju’s acquired three major companies - Epic , an online library for kids aged under 12, for US$ 500 million; Singapore-based Great Learning , an online professional and higher education company, for US$ 600 million and Toppr , an after-school learning platform, for US$ 150 million. Unacademy aims to build the world's largest online knowledge repository for multi-lingual education. They use technology to empower great educators and create a community of self-learners. Their vision is to partner with the brightest minds and democratise education for everyone looking to learn. They want to change the future of education. Vedantu is an Indian online tutoring platform launched in 2011 based in Bengaluru. UpGrad is an online higher education company. It offers over 100 courses in collaboration with global universities. It raised US$ 120 million from Temasek. The Eruditus group, consisting of Eruditus Executive Education and its online division Emeritus, partners with top-tier universities across the United States, Europe, Latin America, India and China to bring world-class business and professional education to a global audience. Eruditus has partnered with more than 50 universities to date, including MIT, Columbia, Harvard, Cambridge, INSEAD, Wharton, UC Berkeley, INCAE, IIT, IIM, NUS and HKUST, educating more than 250,000 individuals across 80 countries. Many courses are offered and facilitated in multiple languages, including Spanish, Portuguese and Mandarin. The Eruditus Group has more than 1,400 employees globally and offices in Mumbai, New Delhi, Shanghai, Singapore, Palo Alto, Mexico City, New York, Boston, London, and Dubai. Eruditus is a global leader in the $280 billion global professional education market. Teachmint , a start-up that helps teachers and institutions create their own virtual classrooms, raised US$ 78 million in a Series B funding. The new round of funding values the company at US$ 500 million. EdTech start-up Classplus raised US$ 65 million in a Series C round led by Tiger Global Management. Doubtnut , a K–12 EdTech platform, has raised approximately US$ 30 million from SIG Global and Lupa Systems. Existing investors Sequoia Capital India, Omidyar Network India and Waterbridge Ventures also participated in the Series B round. Key Players in India TARGET AREAS, STILL UNTAPPED AREAS Target areas Previously dominated by the K-12 segment, the EdTech sector is now witnessing strong growth in the post-K-12 segment. Online education offerings for the K-12 segment (Classes 1 to 12) are projected to increase 6.3X by 2022, creating a $1.7 billion market and the post-K12 market is set to grow 3.7X to touch $1.8 billion. When compared to traditional education (school, college), online education is more affordable. There are numerous e-learning platforms available for the students where they can get access to quality education at the most affordable cost. Due to the affordability factor, students belonging to different income categories and social class can get access to quality education with attractive visuals and expert teachers. There are around 624 million active internet users in India as of February 2021. These active users offer a huge growth opportunity for the EdTech stakeholders. Particularly in Tier 3/4 cities, segments such as online tutoring and competitive exam preparation can have strong growth. With more people in the target audience pool, every segment of the EdTech industry can have ample growth opportunities. Still untapped areas EdTech has untapped potential. The education market in India is massive yet highly under-penetrated, with online learning forming only 2% of this, says Vamsi Krishna, Co-Founder & CEO, Vedantu. Online education start-ups have benefited immensely from the shutdown of schools and colleges, as they tried to fill the gap with online classes. Investors, too, have jumped on to the EdTech bandwagon, even as funds dried up for startups in other sectors. EdTech startup Vedantu raised $100 million in July at a valuation of $600 million, making it the second-most valuable online education startup in India after Byju’s. Virtual is becoming the new normal in learning and is the key to driving growth during the coronavirus pandemic, said Vamsi Krishna, co-founder and chief executive officer, Vedantu. Virtual is becoming the new normal in learning. Therefore, their strategy to encourage learners to experience live, online learning will continue. They believe this will be key in driving category and business growth during the pandemic and beyond. Vedantu is exploring opportunities to scale impact, as it achieves 4x growth, and looks forward to adding 30-40% employees this year. Online learning has seen exponential adoption among students during this pandemic, and schools, as well as institutes, have switched to an online mode to ensure that India’s learning never stops. This continues to benefit students. But switching from offline to online platforms has been a challenge for many teachers, as they were not used to conducting classes in the virtual world. They expect to see more momentum with new users experiencing the benefits of online learning. India has been at the forefront of making the shift towards online learning. While the education market is huge, online penetration is still at a nascent stage. Therefore, investors are increasingly exploring opportunities in this market because of the untapped potential. To invest in this market, they are looking for partnerships that have long-term growth opportunity, the potential to scale and a successful business model. Despite coming up with superior technology solutions for online learning, EdTech startups still are not quite reaching the full potential because of the digital divide, as quality and equality issues are prevalent in India. There is also a misplaced notion about the use of gadgets. Time spent on gadgets and overuse is linked to many unpleasant outcomes. Online learning, when done in moderation and with guidance, can help unlock the potential of each child. A majority of India’s student population still does not have access to a quality teacher or good learning content. The pandemic has only made the situation more stark and online learning has emerged as the only practical solution. ADVANTAGES / DISADVANTAGES Advantages Today’s students are very different from what they used to be. Digital technology has changed the way learners consume information and approach education. The world around us is changing at a rapid pace, and schools, colleges, and educational institutions are all struggling to catch up. Thus, the need for educational reform is higher than it ever was. What can the education system do? First and foremost, it needs to remodel its classrooms to fit those new needs. It needs to embrace technology more broadly to create new learning experiences that can appeal to digital students. This implies a lot of things: the use of new technologies, the training of teachers, the modification of class organization, and, more importantly, a redefinition of what it means to educate people in the 21st century. It’s not an easy task for sure, but it needs to be done in the short term. Doing so can dramatically improve the quality of the education system as a whole, benefiting students, teachers, and society. Some educational organizations are already showing us the way. They are collaborating with education software development companies to digitize the classrooms and bring technology into all kinds of learning experiences. Advantages Tech Provides More Immersive Learning - The digital world is filled with resources that can enrich any class, engaging students at a deeper level and provide interactive experiences that can shed new light on their understanding of a lot of subjects. Imagine, for example, a geography teacher using Google Maps on a digital board to take students on a virtual tour of the Andes or a physics teacher using a 3D simulator to show the effects of different forces at play in a particular movement. There is a lot of software available for a multitude of subjects, from math and chemistry platforms to biology applications. But that is not all there is to it. Immersive learning can also mean virtual reality and augmented reality to offer more sophisticated classes to students. Imagine being able to “walk” through the corridors of the Colosseum or learning to play the piano through a projection on a desk! That’s precisely what technology can give digital learners. It Customizes Learning for Each Student - One of the most significant drawbacks of traditional education is that a single teacher or professor has to prepare classes for different students. That means that classes do not take into account the different kinds of learners inside the classroom, which ends with certain students lagging. Fortunately, technology can help with the diversity of learning styles. How so? By letting teachers follow student progress individually and in real-time. Some platforms can gather information from each student as they work on their assignments and suggest areas of improvement to teachers. Thus, digital learners can move at their own pace, following the recommended path, while teachers can focus on students that are struggling with a particular task. Technology Provides Easy Access to More Learning Resources - Today’s students have grown accustomed to searching for information online whenever they have to solve a problem or learn how to do something. By doing so, they are now used to interacting with search engines, ebooks, educational and how-to videos and online platforms and forums. All of that needs to be present in any classroom to leverage the students’ familiarity with them. Naturally, educators can go beyond that. They can use online tools to allow remote access to students, use streaming to provide tutoring classes, and even use gamification elements in a custom educational software to provide centralized resources more efficiently and in a more engaging manner. Tech Adds Fun to Learning – Students are used to technology being a central part of their everyday lives, so its absence immediately puts them off. Just the inclusion of technology can boost their interest in classes. Yet, technology can do far more than just being there – it can bring fun into the classroom. The gamification elements mentioned are just one of the ways educators can use to generate further engagement with their students. Games themselves are also great to teach about specific concepts in key subjects such as math, chemistry, biology and physics. Of course, there is more than just games – interactive videos and educational robots are other alternatives that can bring the same amount of educational value and excitement. It Increases the Collaboration - Today, technologies help connect the world in a myriad of ways, from connecting people from halfway across the world in a video call to allowing different individuals to work on the same online project simultaneously. Those collaboration capabilities can have a significant impact on the classroom as well. We already mentioned online tutoring classes and remote lessons as ways in which technology can democratize student participation. Group projects and assignments can be done more easily with the tools available today, from text processors and spreadsheets to scientific calculators and online presentation makers. The technology itself can be a goal that fosters collaboration. For instance, a professor could encourage their students to build a website about a particular topic, which won’t just teach them about the subject but also teach them about building a website as a team. Technology Better Prepares Students for Today's Jobs - Traditional education might be excellent at providing fundamental concepts about essential subjects, but it’s getting further away from the workforce’s reality. Today, most jobs call for tech knowledge of varying degrees. At the very least, all jobs require a certain digital alphabetization that most students today have to learn for themselves. Educational institutions can help with that through technology. By encouraging the use of digital tools such as calendars, websites, video calling apps, electronic whiteboards, emails, mobile apps, and more, educators can help students learn how to work with all those tools. Naturally, all of those tools would be boosted by the inclusion of tech-related subjects in the education programs, starting from an early age. Thus, the education system would place technology where it belongs today – at the center stage. Technology Teaches About Digital Life - Technology doesn’t just help prepare students for work but also helps them understand everything that surrounds the tech life itself. Nowadays, many of our lives rely on digital technologies, from entertaining ourselves and communicating with others to paying bills. Besides, social media is a force to be reckoned with, so understanding what it means to participate in that digital life is something students should learn from an early age. In other words, if children start using technology in the safe space of the classroom, they can learn a lot about digital tech responsibility. That’s the perfect environment for students to learn about digital identities, digital citizenship, and online etiquette and what it all means in the broader context. Disadvantages Students: No immediate feedback from instructors - Communication with instructors will inevitably include some wait time. Questions will not be answered immediately due to Professors not having set “office hours” and not being in the classroom at the same time. Lack of face-to-face interaction and connection with the instructor - There is a lack of accountability, because students are truly just "names" to their instructors. Creating personal relationships with instructors is nearly impossible, which is one of the largest factors in successful learning for many students. May require more time - For students that are not as skilled with technology, it could require more time to do this work on their own, to navigate the web etc. Requires technological awareness - Students must be adept at a variety of technologies in order to successfully receive and turn in assignments, communicate with other students etc. Requires students to have access to technology, which is not always possible for lower-income students - Students must obtain a personal computer with a range of programs on it, most likely should have wireless internet in the home etc. This is not always possible for students with fewer financial resources. Lack of motivation for learners who are not intrinsically motivated - Many students benefit from teachers or other peers learning alongside them. It can be difficult for students to desire to learn and work hard when they do not know anyone else doing it. Teachers: The amount of work required to translate the whole classroom structure to a web-based format - It can take a lot of work for teachers to re-format a class so that it fits the web. Teachers must be very adept with technology in order to do this in a timely fashion. Misunderstandings of assignments or instruction - There can be confusion between students/instructors because students only have access to the written explanation of an assignment. Students are not able to ask for clarification, or hear other students' questions. Difficulty motivating students when there is no face-to-face interaction - A large part of teaching is having a rapport with students. When this is taken away, teachers may have a difficult time motivating students from a distance. Lack of feedback from students to help with gauging response - Instructors are unable to get an accurate "feel" for how they are doing and how students are receiving instruction. This is often gained by reading students' facial expressions or reactions, and this cannot be done without face-to-face interaction. IMPACT ON PHYSICAL TEACHING METHODS The Covid-19 pandemic has changed the way teachers prefer working and many are now moving from teaching at schools to the virtual world of edtech startups. After almost two years, students are heading back to school with much enthusiasm for offline classes, but a change has been witnessed in the teachers’ choices as well. Some of the teachers are choosing to continue with virtual classes with new edtech startups, leaving behind the traditional chalk-and-talk teaching methods. During the pandemic, almost every teacher had to learn the new virtual teaching methods by sitting in front of their mobile or laptop screens. Now, they become habitual to these methods as it not only provides them with the potential of greater remuneration but also helps them gain digital skills. The new edtech approach Edtech businesses are positively transforming the education industry. Edtech firms have come a long way, especially during the pandemic, by bringing teaching and learning to an entirely digitised form. Many edtech companies have noticed the shift in how teachers want to teach now and have incorporated tools to help them make the move from physical to digital more easily, such as enabling simplified sharing of videos, puzzles, assessments, and reports. With the help of advancements in artificial intelligence, instructors now have access to a variety of tools powered by machine learning algorithms that make their jobs easier. Special activities, such as verifying responses for assignments, allow them to devote more time to other parts of teaching. The mission of the startup mattered the most to these educators. What came in second was having the organisation’s support with content, training, and access to a community of fellow educators. Edtech provides full-time stability and recognition Teachers who were not able to get adequate job security even after working almost half of their lives in schools can get an opportunity to work as full-time members of edtech startups and be better recognised for their effort. Aanand Srinivas, the founder of the edtech startup StayQrious, which was working with around 50-60 teachers before, saw a definite hike in applications from teachers with a background in traditional teachers during the pandemic. The number of teachers have now increased by around five times as it was earlier. Attractive pay scale After a long interaction with teachers, we got to know that teachers are getting pretty good salaries as compared to what they were earning after spending 75% of their daily time in a private school. “When I was working in a Delhi-based private school, I used to earn around Rs 25,000 to Rs 30,000 in a month. Now, I am earning Rs 60,000 in a month with better compensation and facilities than is provided in schools,” says Mansi Garg, a learning coach at StayQrious. The pandemic has not only changed the learning approach of students but has also changed the mindset of teachers concerning the new facilities they could get and the skills they could develop while working for edtech startups. Edtech startups are now attracting creative talents from all over the country. “With more awareness spreading, we are hoping many of the best minds decide to enter the field of education as the scale of the problem is large and we'll need to have teachers with the right mindset to solve it,” says StayQrious Founder Aanand Srinivas. EDUTECH IMPACT ON EDUCATION AS A WHOLE In this generation, technology plays a major role in everyday lives. We now live in an era where people are consumed by technology devices, which is shaping how we communicate. As these technologies evolved, the nature of teaching and learning has become much more collaborative. With these advanced technologies we are stepping into a whole new world of innovation and creativity. Active engagement - Technology is interactive, this helps students to become passionate about what they are learning. By using the internet, students can get updates on real time issues and solutions. Allowing children to participate in an active way reduces behavioral issues in class, it gives more dedicated time for teachers to focus on the subject. Discussion and working group - By using software tools, students can create online groups and virtual communities that connect them with students and teachers anywhere around the world. Online communities provide a great opportunity for students to discuss their ideas and receive feedback in real time allowing for a more efficient work environment. Coaching and Assessment - As technology continues to evolve, teachers must adapt. Incorporating technology into a classroom setting allows for an enhanced relationship between student and teacher. Teachers can now share lesson plans, lectures, and presentations with ease while students can upload their assignments from their devices. Teachers have become facilitators, providing constant feedback, enabling students to achieve deeper levels of understanding. They ensure that students are not just learning the concept, but also how to apply the knowledge, it develops critical-thinking and problem solving skills. Simulation Software - Simulation software brings to life, the wonders of our world that would be impossible to see without technology. By using specific simulation tools, students can see planetary movements, how a tornado develops, or how the dinosaurs lived. The ultimate aim of EdTech implementation should be to enhance the quality of education and improve engagement levels among students. It is important to balance the visual content with reading, as well as the interactive elements and games with independent thinking and writing, so that students won’t be completely absorbed by all that the internet has to offer. In the interactive age, teachers have more abilities to turn classes into exciting places for discovery and learning adventures. Many in the ed-tech field see new technologies as powerful tools to help schools meet the needs of evermore-diverse student populations. The idea is that digital devices, software, and learning platforms offer a once-unimaginable array of options for tailoring education to each individual student’s academic strengths and weaknesses, interests and motivations, personal preferences, and optimal pace of learning. Increasing Accessibility and Flexibility - Technology has changed education. Information is more accessible now than ever before. We now have fully-fledged universities that thrive by offering all their courses online, it is now easy for anyone to access a desired educational course online. Technology has brought people together by breaking the geographical barriers that limited access to education in the past. Students can learn at their own pace, depending on their ability and the amount of time. Learning materials are delivered to students online, students can schedule their learning timetables as they wish. Special Needs in Education - For years, special needs has been an important issue in education. Traditional classroom environments may fail to address the individual needs of some students. Digital learning provides a highly flexible, interactive and accessible nature for individuals to learn in ways that suit their personal needs, capabilities or even challenges. More so, teachers can now use various technology applications to help students with particular needs learn better. Making Learning Fun Again - Technology has changed education in the ways which learning content is now delivered. Teachers can now use videos, animations, and e-books to enhance the process of learning. It’s common for students and teachers to use games as a way of making the process more interactive. As a result, learning and teaching are now more effective and meaningful than ever. Interaction between teachers and students - Nowadays, the absolute dependence on physical meetings is gone. It is easy for teachers and students to stay in touch via email and other internet-based services such as file-sharing and messaging. Online Tests and Assessments - It is now possible for institutions to test their students online. Students can now use e-assessments to accurately evaluate their performance as well as their professors. Similarly, education institutions can efficiently assess their students using online assessments, saving time and resources. Differentiated Instruction - The technology in education also provides a means to focus on active student participation and also to present different strategies of questioning. It also promotes plans of personalized learning and broadens individualized instructions. The use of internet in education has made a great impact on the educators and students in the whole education system. Internet itself has unlocked a world of opportunities for students. Improved Student Writing - It is also suitable for students to change their written work on word processor which also helps in improving the quality of their writing. According to various studies, students are better at editing and critiquing written work when it is done on a computer. Technology has changed education in many ways. From making education more accessible and meaningful, to enhancing the manner in which teachers and students interact during the process of learning. Technology has had many profound and positive effects on education as a whole. FUTURE PROSPECTS 2021 marked a paradigm shift towards EdTech and the trend will strengthen in 2022. More students will realize that traditional offline players haven't built the capability to provide the support needed in these hyper-competitive times. By 2026 the online education industry is set to grow by 11.6 billion. As per the recent population census survey, nearly 580 million Indians are between 5-24 years of age, with about 250 million of them currently enrolled in schools. This means that about 36 per cent of India’s population is young and learning. That’s a huge market for the education sector to leverage and grow. Like any other sector, the education sector has also seen an online transformation post COVID. However, by 2026 the online education industry is set to grow by 11.6 billion. This proves that the EdTech revolution is not a temporary adjustment but a permanent solution. Online education to ensure continued learning The Government of India has always taken progressive steps when it came to education. In 2002, Foreign Direct Investment through the automatic route was 100 per cent permitted. Due to which the transfer of knowledge, skills, technology, and expertise has become a global phenomenon. Online education has only contributed to accelerating the globalisation of education. A case in point would be the emergence of online programs in renowned and Ivy League global universities like Deakin University, Liverpool John Moores School, Duke University and the University of Arizona. A student from any part of the world can earn and learn at the same time, hence reducing the burden of clearing piled up loans later on. Likewise, Amazon has launched its ambitious computer education programme in India where it would identify and train 1 lakh students for future employability in its organisation. Many mid-level employees will get better projects and salaries as they upskill through online programs offered by EdTech startups. Similarly, the Indian Institutes of Management (IIMs) have partnered with online service providers to provide online and blended courses in digital marketing, product management, finance and operations for working professionals. Better qualified and well-paid teachers A report by KPMG (Klynveld Peat Marwick Goerdeler) shows that India has the second-largest market for online education, right after the US. This means that the nation is going in the right direction as per the recent Nation Education Policy (NEP) passed in 2020. With proper planning and execution, the online medium has the power to meet all the four policy parameters of NEP — Access, Equity, Quality, Affordability, and Accountability. Right now, the challenge faced by Indian Education is not the lack of consumers (students) but the lack of qualified and willing suppliers (educators.) One of the major reasons for this is the low pay for an educator in a traditional school or college setup. Those who are highly qualified in their field prefer to take up corporate assignments with lucrative pay rather than settle for less. However, online educators in EdTech organisations have reported earning 2x more than their offline counterparts. This is because there is no limit placed on the number of enrolments per batch. At the same time, the students get the required 1-on-1 attention in the comfort of their room, which they otherwise won’t get in a crowded classroom setup. Satisfied educators will end up teaching the subject with passion and make the learning process interesting and innovative for students. Blended online mentorship programmes Students don’t have to spend money on transport, lodging, food and expenses if they decide to take the online route for exams like IIT-JEE, NEET-UG, GATE or UPSC-CSE. Nor do they have to mull over shifting base. Due to the availability of recorded lectures, students can enjoy a certain level of flexibility in their schedules, which is otherwise absent in the offline mode. Those who are preparing for competitive exams can do so at their own pace and gain access to their test performances vis-a-vis other students through quantitative data analysis. Online mentorship programs will be a popular demand in offline institutes due to the prospect of the one-on-one learning experience. High brand awareness that traditional players banked on will no longer serve as a strong competitive advantage. Hence, if not at the high school level, from the graduation level onwards, and in the competitive exams space, the outlook for online education in 2022 looks quite strong. Future Prospects BIBLIOGRAPHY 1. https://www.futurelearn.com/info/blog/latest-EdTech-developments 2. https://www.investopedia.com/terms/e/EdTech.asp 3. https://www.indiainfoline.com/article/general-editors-choice/impact-of-covid19-on-EdTech-and-learning-platforms-in-india-120092200276_1.html#:~:text=Impact%20of%20COVID%2D19%20on,billion%20dollar%20industry%20by%202021 4. https://www.weforum.org/agenda/2020/04/coronavirus-education-global-covid19-online-digital-learning/ 5. https://www.indiatoday.in/education-today/featurephilia/story/year-ender-2021-how-covid-19-pandemic-enabled-EdTech-to-become-leading-sector-for-growth-1891605-2021-12-24 6. https://www.ibef.org/blogs/india-to-become-the-EdTech-capital-of-the-world 7. https://thestartuplab.in/future-of-EdTech-india-factors-driving-the-growth-of-EdTech-industry-in-india/ 8. https://www.livemint.com/ 9. https://www.bairesdev.com/industries/EdTech-classroom-benefits/ 10. https://wiki.uiowa.edu/display/EdTech/Disadvantages 11. https://www.indiatoday.in/education-today/featurephilia/story/teachers-are-making-a-career-switch-from-schools-to-edtech-startups-after-the-pandemic-1882493-2021-11-30 12. https://devicecycles.com/wp-content/uploads/2019/05/Device-Cycles-SB_How-EdTech-makes-an-impact-in-education-_03-19-2019-002.pdf 13. https://indianexpress.com/article/education/education-outlook-2022-future-of-EdTech-sector-digital-learning-in-2022-and-beyond-7699508/ 14. https://in.linkedin.com/company/unacademy 15. https://eruditus.com/about-us/ Previous Next

  • International Banking by Tarun Natarajan | Podar Eduspace

    < Back International Banking by Tarun Natarajan International banking is a complicated system that comprises of multiple structural subgroups, each of which performs a specific role. This study will be on the unique characteristics of international banks and the wide range of duties they perform. INTRODUCTION In general, the world banking system is separated into two categories: domestic and international banks. International banking is a complicated system that comprises of multiple structural subgroups, each of which performs a specific role. The focus of this study will be on the unique characteristics of international banks and the wide range of duties they perform. To begin, the foreign banking system will now be contrasted to the domestic banking system in order to identify the major contrasts. In addition, the organisation of global financial markets, as well as the spectrum of instruments traded there, will be explored. Furthermore, the many types of exchange rate exposure that multinational firms confront will be examined in order to recognize and quantify the risks involved. CONTRASTS BETWEEN INTERNATIONAL AND DOMESTIC BANKS The main contrasts between international and domestic banks must be identified. They set themselves out from the competition in terms of customer service. To begin with, "international banks organise trade finance for their customers to permit imports and exports," but "local banks provide just for cross-border business." Second, international banks provide for foreign exchange, which is necessary for cross-border transactions and investments, but domestic banks do not offer this service. Another distinction is the types of deposits that banks accept, as well as the loans and assets that they make. While domestic banks conduct business in the local currency, the bulk of international banking institutions borrow money and lend money in the Eurocurrency market, which comprises of deposits held in banks located outside of the countries that issue the currency in which the deposits is held. Internal banks are also governed by laws of the state in that they are located, but global banks are governed by the laws of both their home country and the countries where their branches are located. UNITED STATES' USE OF INTERNATIONAL BANKS The grounds on which the USA uses international banks can easily be defined based on the aforementioned disparities. For starters, foreign banks facilitate global transactions and investments, which is critical for the majority of businesspeople. Second, people traveling to foreign countries frequently use the branches of multinational banks. Another important issue would be that the international banking program enables the United States government to invest in the world market and grow as a country. Furthermore, international banks meet the needs of multinational organisations by lending big sums of money while posing fewer risks. INTERNATIONAL FINANCIAL SYSTEM STRUCTURE As previously stated, the international financial system's structure is extremely complicated, as evidenced by the many different types of international markets. They include the previously mentioned Eurocurrency market (mainly Eurodollars), this same international bond market (which includes foreign securities, Eurobonds, global bonds, equity-related, and dual currency international bonds), and the international stock markets. The Eurocurrency market operates on an interbank level, and so it runs concurrently with the financial institutions of the countries that formed the currency. The foreign bond market offers bonds to foreign investors, with the primary distinction being the currency with which they have been denominated. The instruments are typically portrayed as debt or equity, with the other reflecting a share of the responsibility or ownership. International banks as well as international financing syndicates offer enormous sums of money to multinational firms, as previously stated. These funds are used for their own economic and social development, project funding, and investment. However, the foreign exchange process is frequently vulnerable to a number of negative impacts that might result in a variety of negative outcomes, including default. To put it another way, international exchange exposure occurs when the value of a company's future cash flows is determined by the value of foreign currencies. Multinational firms' performance is heavily reliant on transactions and investments conducted outside of the native financial system due to their nature. Multinational firms are exposed to several hazards due to the fluctuation of exchange rates. There are several ways for evaluating those odds, the most famous of which is the Moody's creditworthiness rating model. This concept allows multinational firms and international lending syndicates to foresee possible negative outcomes and avoid losses. CONCLUSION This paper provides a basic overview of the international financial system. First, the contrasts between domestic and international banks were examined, and the United States' the use of international banks was outlined based on the findings. The architecture of the world economy was also taken into account in order to represent the complex nature of its parts in a concise manner. It is also clear that the international financial network is influenced by a wide range of factors. Those elements, which indicate difficulties relating to foreign exchange exposure, were also described. Finally, it is critical to note that international banking is amongst the most often used economic vehicles. Previous Next

  • Online Programmes | Podar Eduspace

    We are here to help you find your edge. Podar Eduspace Our Programs Take the next step towards your success by upskilling yourself with our selection of Podar Eduspace ​ courses and offerings Podar Skills Powered by Harvard Business Publishing. 13 certificates to boost hard, soft and digital skills. Flexible skills-based learning to prepare you for the 21st century, all-in-one holistic development and profile building. Learn more WorkEx Bootcamp Improve your competitiveness with our WorkEx Bootcamp, a solution to bridge the gap between traditional college education and real-world employable skills. Learn more EduSpace Internships Work with experts from a field of your choice. Digital marketing, finance, AI, science, psychology and more. Conduct in-depth research based on a curated topic and published on EduREPORTS. Read More EduREPORTS EduREPORTS is a programme where we publish the research reports created by the graduating cohorts of the WorkEx Bootcamp and independent research submitted from our community on diverse topics such as technology, social welfare, and more. Read More

  • The Relationship between Finance and Economies by Veer Sharma | Podar Eduspace

    < Back The Relationship between Finance and Economies by Veer Sharma Studying the system interactions and linkages between banking, finance and governance. Macroeconomics Macroeconomics is a branch of economics that focuses on the study of the economy as a whole, rather than on individual markets or specific economic agents. It deals with the behavior, performance, structure, and decision-making of an entire economy, encompassing factors such as aggregate output, employment, inflation, economic growth, and the interactions between different sectors. Key areas of focus in macroeconomics include: A) Gross Domestic Product (GDP): Macroeconomists analyze the total value of goods and services produced within a country over a specific period. GDP is a fundamental measure of economic activity and is used to gauge the overall health and size of an economy. B) Unemployment: Macroeconomics examines the level of unemployment in an economy and seeks to understand its causes and consequences. It addresses questions about how changes in economic conditions impact the job market and labor force participation. C) Inflation: Macroeconomists study changes in the general price level of goods and services, known as inflation. They explore its causes, effects, and potential policy measures to control inflation and ensure price stability. D) Economic Growth: Understanding the factors that contribute to sustained economic growth is a central concern in macroeconomics. This involves analyzing productivity, technological advancements, investment, and other factors that influence an economy's capacity to expand over time. E) Fiscal and Monetary Policy: Macroeconomists assess the impact of government policies on the economy, such as fiscal policies (government spending and taxation) and monetary policies (central bank actions like interest rate adjustments and money supply management). They study how these policies can be used to influence economic performance and stability. F) International Trade and Finance: Macroeconomics also explores the interactions between economies on a global scale. It delves into topics like exchange rates, trade imbalances, and the impact of international economic events on a country's domestic economy. G) Business Cycles: Macroeconomists analyze the cyclical fluctuations in economic activity known as business cycles. These cycles consist of periods of economic expansion (boom) and contraction (recession), and understanding their causes and dynamics is a key focus of macroeconomic research. In essence, macroeconomics provides insights into how economic systems function as a whole, how they respond to external shocks and policy changes, and how government actions can impact overall economic well-being. It helps policymakers, economists, and businesses make informed decisions to manage and improve economic conditions at the national and international levels. Microeconomics Microeconomics is a branch of economics that focuses on the study of individual economic units and their behavior within markets. It examines the interactions between households, firms, consumers, and producers at a smaller, more localized level, as opposed to the broader perspective of macroeconomics, which looks at the economy as a whole. Key areas of focus in microeconomics include: A) Supply and Demand: Microeconomics analyzes how individual buyers and sellers interact in various markets. The concept of supply and demand is central to this analysis, as it explains how prices are determined based on the interaction between consumer demand and producer supply. B) Consumer Behavior: Microeconomists study how consumers make choices about purchasing goods and services. They examine factors such as individual preferences, utility, and budget constraints to understand how consumers maximize their satisfaction (utility) given their limited resources. C) Producer Behavior: Microeconomics also looks at how firms make decisions about production and pricing. It explores concepts like production costs, profit maximization, and market structure (e.g., perfect competition, monopoly, oligopoly) to understand how firms operate in different competitive environments. D) Market Structures: Microeconomics categorizes markets based on the number of sellers and buyers, their influence over price, and the nature of the goods being traded. Different market structures have distinct implications for pricing, competition, and efficiency. E) Resource Allocation: Microeconomics examines how scarce resources are allocated among competing uses. It delves into topics like opportunity cost, production efficiency, and factors of production (land, labor, capital, entrepreneurship) to understand how resources are utilized to produce goods and services. F) Welfare Economics: Microeconomists assess the overall welfare or well-being of society by analyzing the efficiency and equity implications of market outcomes. Concepts like consumer surplus, producer surplus, and market equilibrium are used to evaluate the desirability of various economic situations. G) Externalities and Market Failures: Microeconomics addresses situations where markets do not achieve efficient outcomes due to factors like external costs or benefits (externalities), public goods, and imperfect information. It explores how government intervention or policy measures might be necessary to address these market failures. In summary, microeconomics provides insights into the behavior of individual economic agents and their interactions within markets. It helps to understand how prices are determined, how consumers and producers make choices, and how resources are allocated in various economic settings. Microeconomic analysis is essential for making informed decisions about resource allocation, market regulation, and understanding the intricacies of specific economic activities. Financial Systems A financial system is a set of institutions, such as banks, insurance companies, and stock exchanges, that permit the exchange of funds. Financial systems exist on firm, regional, and global levels. Borrowers, lenders, and investors exchange current funds to finance projects, either for consumption or productive investments, and to pursue a return on their financial assets. The financial system also includes sets of rules and practices that borrowers and lenders use to decide which projects get financed, who finances projects, and terms of financial deals. There are four components of Financial Systems – A) Financial institutions - Financial institutions play a significant role in bringing together lenders and borrowers. This is done by using various financial instruments and services, all of which contribute to an efficient financial system. The financial institution is one of the main components which ensure liquidity in the financial system through the development of credit and other liquid assets. B) Financial services - Financial services include credit rating agencies, mutual funds, pension funds, venture capital, and other institutions that are part of the financial system. Financial services are an important component of the financial system due to their specific tasks. C) Financial markets - A financial market is where both the creation of new financial assets and the trading of existing ones occur. Financial markets move funds from savers to borrowers much more efficiently and ensure that there is always liquidity. D) Financial instruments - Financial instruments are another main component of the financial system. Financial instruments are papers that entitle the buyer to future income from the seller. That's because there are different needs between investors and those looking for credit. Risk Management What is Risk Management? Risk management involves identifying, analyzing, and accepting or mitigating uncertainty in investment decisions. Put simply, it is the process of monitoring and dealing with the financial risks associated with investing. Risk management essentially occurs when an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment, such as a moral hazard, and then takes the appropriate action (or inaction) to meet their objectives and risk tolerance. Importance of Risk Management? If an unforeseen event catches your organization unaware, the impact could be minor, such as a small impact on your overhead costs. In a worst-case scenario, though, it could be catastrophic and have serious ramifications, such as a significant financial burden or even the closure of your business. To reduce risk, an organization needs to apply resources to minimize, monitor and control the impact of negative events while maximizing positive events. A consistent, systemic and integrated approach to risk management can help determine how best to identify, manage and mitigate significant risks. Process of Risk Management: A) Identifying risks - Risk identification is the process of identifying and assessing threats to an organization, its operations and its workforce. For example, risk identification may include assessing IT security threats such as malware and ransomware, accidents, natural disasters and other potentially harmful events that could disrupt business operations. B) Risk analysis and assessment - Risk analysis involves establishing the probability that a risk event might occur and the potential outcome of each event. Risk evaluation compares the magnitude of each risk and ranks them according to prominence and consequence. C) Risk mitigation and monitoring - Risk mitigation refers to the process of planning and developing methods and options to reduce threats to project objectives. A project team might implement risk mitigation strategies to identify, monitor and evaluate risks and consequences inherent to completing a specific project, such as new product creation. Risk mitigation also includes the actions put into place to deal with issues and effects of those issues regarding a project. International Banking International banking refers to the financial services and activities that involve transactions and operations across national borders. It involves the movement of funds, assets, and capital between individuals, businesses, and institutions in different countries. International banking plays a crucial role in facilitating global trade, investment, and economic activities. Features of International Banking – A) Flexibility: This banking facility provides flexibility to multinational companies to deal in multiple currencies. The major currencies that multinational companies or individuals can deal with include the euro, dollar, pounds, sterling, and rupee. The companies with headquarters in other countries can manage their bank accounts and avail of financial services in other countries through this banking without any hassle. B) Accessibility: International banking provides accessibility and ease of doing business to companies from different countries. An individual or MNC can use their money anywhere around the world. This gives them the freedom to transact and use their money to meet any funds requirement in any part of the world. C) International Bank Transfers/Transaction: International banking allows the business to make international bill payments. The currency conversion facility allows the companies to pay and receive money easily. Also, benefits like overdraft facilities, loans, deposits, etc., are available every time for overseas transactions. Correspondent banking is very useful in such transactions. D) Accounts Maintenance: A multinational company can maintain the records of global accounts in a fair manner with the help of international banking. All the company’s transactions are recorded in the books of banks across the globe. By compiling the data and figures, the company’s accounts can be maintained. Investment Finance Investment finance refers to the allocation of funds or capital with the goal of generating returns or profits over a certain period of time. It involves the strategic deployment of financial resources into various assets, such as stocks, bonds, real estate, mutual funds, and other financial instruments, with the expectation of earning income or achieving capital appreciation. Objectives of Investment Finance – A) Wealth Accumulation: Individuals, businesses, and institutions invest their funds to grow their wealth over time. This can be achieved through capital gains (increase in the value of the invested assets) and/or income generated from dividends, interest, or rental payments. B) Capital Preservation: Some investments focus on preserving the initial capital while generating modest returns. These are often considered lower-risk investments, such as government bonds or certain types of savings accounts. C) Risk and Return Trade-Off: Investment finance involves assessing and managing the trade-off between risk and potential return. Generally, investments with higher potential returns are associated with higher levels of risk. D) Diversification: A key principle of investment finance is diversifying the investment portfolio across different asset classes and geographic regions to reduce risk. Diversification helps mitigate the impact of poor performance in any one investment. Corporate Finance Corporate finance refers to the financial activities and decisions made by corporations or businesses to manage their financial resources, optimize their capital structure, and make strategic financial decisions that maximize shareholder value. It involves a wide range of activities that revolve around obtaining and using funds effectively to achieve the company's goals and objectives. Objectives of Corporate Finance – A) Maximizing Shareholder Value: One of the primary objectives of corporate finance is to enhance the wealth of the company's shareholders. This involves making financial decisions that result in increasing the stock price, dividends, and overall returns for shareholders. B) Profitability: Corporate finance aims to generate sustainable profits by effectively managing the company's investments, operations, and expenses. Profitability ensures the company's ability to cover costs, fund growth, and provide returns to shareholders. C) Long-Term Growth: Companies strive for continuous growth and expansion to increase their market share, revenue, and profits. Corporate finance supports this objective by allocating resources to strategic investments and projects that contribute to the company's long-term success. D) Efficient Allocation of Resources: Effective corporate finance involves allocating financial resources, such as capital and investments, to projects and initiatives that offer the highest potential return. This ensures that resources are used efficiently and generate maximum value. Difference Between Investment and Corporate Finance – History of Money What is Money? Money doesn't always have value whether it's represented by a seashell, a metal coin, a piece of paper, or a string of code mined electronically by a computer. Money allows people to trade goods and services indirectly. It helps communicate the price of goods and provides individuals with a way to store their wealth. It is valuable as a unit of account—a socially accepted standard by which things are priced and with which payment is accepted. Throughout history, the concept of money has evolved from barter systems to complex financial instruments. Early societies traded goods directly, but as trade expanded, various commodities, such as shells, grain, and metals, were used as mediums of exchange. Metal objects eventually emerged as standardized forms of money, with ancient civilizations like the Greeks and Romans using coins. As economies grew, paper money emerged, initially representing promises to redeem precious metals. In the modern era, governments and central banks took control of money issuance. The gold standard linked currency values to a specific amount of gold, fostering global trade. The 20th century saw the transition to fiat money, backed by governments' legal tender and trust. The rise of electronic banking led to digital money, revolutionizing transactions. Today, cryptocurrencies, like Bitcoin, introduce decentralized and digital forms of money, challenging traditional financial systems. The history of money reflects humanity's quest for efficient and trusted mediums of exchange to facilitate trade and economic progress. Corporate Governance Corporate governance is the system of rules, practices, and processes by which a firm is directed and controlled. Corporate governance essentially involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community. Since corporate governance provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure. Benefits of Corporate Governance – A) Good corporate governance creates transparent rules and controls, provides guidance to leadership, and aligns the interests of shareholders, directors, management, and employees. B) It helps build trust with investors, the community, and public officials. C) Corporate governance can provide investors and stakeholders with a clear idea of a company's direction and business integrity. D) It promotes long-term financial viability, opportunity, and returns. Principles of Corporate Governance – Fairness: The board of directors must treat shareholders, employees, vendors, and communities fairly and with equal consideration. Transparency: The board should provide timely, accurate, and clear information about such things as financial performance, conflicts of interest, and risks to shareholders and other stakeholders. Responsibility: The board is responsible for the oversight of corporate matters and management activities. It must be aware of and support the successful, ongoing performance of the company. Part of its responsibility is to recruit and hire a CEO. It must act in the best interests of a company and its investors. Accountability : The board must explain the purpose of a company's activities and the results of its conduct. It and company leadership are accountable for the assessment of a company's capacity, potential, and performance. It must communicate issues of importance to shareholders. Entrepreneurial Finance Entrepreneurial finance refers to the specific area of finance that deals with the financial decisions, strategies, and challenges faced by entrepreneurs, startups, and small business owners. It focuses on the unique financial needs and opportunities that arise when individuals or groups launch new ventures or seek to grow and scale their businesses. The key aspects of Entrepreneurial Finance are – A) Startup Funding: Entrepreneurs often need capital to turn their innovative ideas into viable businesses. Entrepreneurial finance involves identifying and securing funding from various sources, including personal savings, family and friends, angel investors, venture capital, and crowdfunding. B) Business Valuation: Determining the value of a startup or small business is crucial for attracting investors, negotiating equity stakes, and making informed financial decisions. Valuation methods specific to startups and early-stage companies are used. C) Capital Structure: Deciding on the mix of equity and debt financing is important for entrepreneurs. Balancing financial risk and ownership control is a key consideration in determining the optimal capital structure. D) Bootstrapping: Many startups begin with limited resources and use creative strategies to operate and grow without external funding. Entrepreneurial finance includes effective bootstrapping techniques to stretch resources and minimize cash burn. E) Risk Management: Entrepreneurs face various financial risks, including market risks, technological risks, and regulatory risks. Managing and mitigating these risks is an integral part of entrepreneurial finance. F) Financial Planning: Developing a comprehensive financial plan that outlines revenue projections, expenses, and growth strategies is essential for startup success. Entrepreneurs use financial planning to guide their operations and secure funding. BIBLIOGRAPHY 1. Investopedia.com 2. Ibm.com 3. Studysmarter.co.uk 4. Efinancemanagement.com 5. Wikipedia.org 6. Frank ISC Economics standard 12 Previous Next

  • Knowledge Ecosystem | Podar Eduspace

    Our Programs Take the next step towards your success by upskilling yourself with our selection of Podar Eduspace ​ courses and offerings EduSPACE: The Blog Develop a working understanding of topics such as AI, tech, business, education and more. Written by experts to simplify complex ideas. Learn More Podar Conversations A flagship monthly series of mentoring talks by Podar Eduspace, bringing together industry CEOs and veterans with decades of leadership experience. Learn more

  • Skill Development | Podar Eduspace

    Acerca de Skill Development Through our skilling initiatives we aim to work with the Government of India and MNCs to provide skilling to urban and rural communities across India. Through this vision, we seek to work with Anandilal Podar Trust to contribute and give back to our nation. The Anandilal Podar Trust, established in 1921, the flagship philanthropic initiative of Podar Enterprise has 100+ years of outstanding services towards society at large. APT has been running multiple schools, colleges, Private ITI, Sports Complex and have been front runners in setting up schools and vocational training for the differently abled. Since 2014, APT has engaged with National Skill Development Corporation (NSDC) , under the Ministry of Skill & Entrepreneurship as PIA for projects like Star, PMKVY. APT also empanelled under Rajasthan Skill & Livelihoods Development Corporation (RSLDC) for implementing skill based training in the healthcare sector. Our objective is to impact the lives of underprivileged youth by providing them skill, employment and livelihood. We have been implementing partners for large scale government projects including: PMKVY and RSLDC. We engage with corporate sector and PSU's as their preferred partner for implementing CSR Projects across pan-India. We work with marginalized youth, women, specially-abled, school & college drop-outs in both rural and urban India. Our industry-connected skilling model will create a visible impact on the lives of over a million uneducated & unemployed youth who enter the workforce each year. We also aspire to give back to society and contribute to India in becoming the Skill Capital of the World . We are working with the Sector Skill Council for People with Disabilities in states like Maharashtra and Rajasthan to train disabled candidates (hearing, sight and locomotive disabilities) and are employing them in various sectors like logistics, telecommunication, etc. Our Focus Sectors Are – Logistics, Telecommunication, Technology and Energy

  • Anandilal Podar Trust | Podar Eduspace

    Acerca de About Anandilal Podar Trust In 1921, Mahatma Gandhi, the Father of the Nation called on the nation to donate Rs. 1 Crore to the ‘Tilak Swaraj Fund’ - to help liberate India. Due to British oppression, there was considerable apprehension to make donations. It was then Shri Jamnalal Bajaj approached Shri Anandilal Podar, a noble-hearted businessman, to help drive the initiative. Shri Anandilal Podar readily donated Rs. 2,01,00 to the fund and this formed the foundation for the Trust. To contribute to education in a young India, great visionaries and philanthropists: Pandit Madan Mohan Malviyaji, Shri Jamnalal Bajaj and Shri Anandilal Podar came together to establish the Anandilal Podar Trust in 1921. It is of utmost pride that Mahatma Gandhiji himself, was the Chairman Trustee of the trust. Anandilal Podar Trust is honoured to be the only private trusteeship that Bapuji ever accepted during his life dedicated to Independent India. Following in this noble vision, the Trust has been committed to giving back and providing quality education to learners in rural and urban areas across the nation. The Trust has established over 37 charitable schools, colleges, management institutes, hospitals, vocational training centres across India - including the first Institute of Management in Rajasthan, bearing the Podar name. Currently, over 30,000 students are studying in these institutions as the Anandilal Podar Trust continues growing to enrich more lives and contribute to lifelong learning. 35+ Institutions 20,000+ Skilled 2,00,000+ Educated

  • Consumer is the King by Aman Jalan | Podar Eduspace

    < Back Consumer is the King by Aman Jalan Consumer behaviour is the study of psychological, physical and social actions when individuals, groups or organizations buy, use and dispose of products, services, ideas, and practices. CONSUMER BEHAVIOUR ABSTRACT Consumer is the king of any business. Understanding consumer needs and wants is the foremost task of any marketeer. Consumer behaviour is the study of psychological, physical and social actions when individuals, groups or organizations buy, use and dispose of products, services, ideas, and practices. In simpler terms, it is the study of how a consumer will make its buying decision and the factors that influence those decisions. These factors may be the consumer's emotions, attitudes, and preferences. This paper explores how consumers all around the world are divergent in their behavior towards purchasing a particular product, the various strategies that sellers use in order to identify these peculiarities, and how they use this information to maximize sales. The Indian Market is worth over a trillion dollars today, and the Indian consumer is cognizant of all the options and makes informed choices while choosing to purchase a product. Due to their unique behavioral patterns, we will be focusing on the Indian consumer behavior. INTRODUCTION According to marketers, understanding the compelling reason for which a consumer purchases a particular good or service over the other is pivotal in identifying which product is in demand and which product is obsolete. It often leads them to improve existing products and services as well as innovate newer ones. An excellent example is the advent of food delivery apps like Swiggy and Zomato. During Covid, all eateries were shut down. People were tired of cooking and were missing their favourite foods. Restaurants too were losing out on business. The service of safely delivering food from restaurants to homes proved to be a great success and has garnered a turnover of 57 billion rupees in just a span of four years. The study of consumer behaviour encompasses · What they buy · Why they buy it · When they buy it · Where they buy it from · How often they buy it · How they use and dispose of the product Consumers in India behave in a dynamic and complex way which is shaped by the country's diverse cultural, economic, and social landscape. With a population exceeding 1.4 billion, India presents a unique market characterized by a mix of traditional values and rapid modernization. The Indian market is segmented into various economic classes, from affluent urban consumers to price-sensitive rural populations. Rising disposable incomes, especially in the burgeoning middle class, have led to increased spending on lifestyle products, luxury items, and technology. The standard of living has consistently improved since the last twenty years, with the GDP per capita rising by 261% since 2004. This has led to an increase in demand for luxury goods. IMPORTANCE Understanding consumer behavior is called consumer behavior analysis. Customers don’t always do what they say they will, so customer behavior analysis can identify what’s really happening when they encounter your brand. By examining customer-generated data and your own operational data using qualitative and quantitative approaches, you can identify how customers behave at each interaction and understand what drives that behavior. Identifying Needs and Wants : By studying consumer behavior, companies can identify the needs and wants of their customers. This will provide valuable information to producers such as what to produce, how much to produce, thus ensuring higher customer satisfaction and loyalty. For example, cold countries such as France and Switzerland are feeling the need for air conditioners now due to global warming. Thus, after studying this behavior, companies will realize this demand and increase production to meet this demand. Market segmentation and Targeting : Analyzing consumer behavior helps in segmenting the market into distinct groups of consumers with similar characteristics and needs. For example, after analyzing, a company manufacturing protein bars might discover that 75% of its consumers belong to the age group of 18-30 years. This segmentation helps companies to target their market more accurately, thereby improving the efficiency and effectiveness of their campaigns. Product Development and Innovation : By studying consumer behavior, companies can predict future markets, which will lead to the development of new products or improve/alter the existing ones. This can inspire innovation and improve designing to effectively satisfy consumers. For example, mobile phone manufacturers changed their design to make the phones much sleeker so that consumers can conveniently carry them in their pockets. Attracting New Customers and Increasing Customer Loyalty : Analyzing consumer behavior doesn’t just give companies valuable insights into their existing customers – it will also help in attracting new ones. According to Invesp, selling to an existing customer has a probability rate of 60-70%, but selling to a new customer is only 5-20%. METHOD These steps should be taken to analyse a consumer’s behaviour: Segment Your Audience : The first step to a customer behavior analysis is segmenting your audience. Key segmentation models are demographic segmentation (age, gender, etc.), psychographic segmentation (personality, values, etc.) and geographic segmentation (country, town, etc.) Gather qualitative and quantitative data on customer behavior: Once the customers are segmented, companies are able to start evaluating their data for customer behavior patterns. This information falls into two types: quantitative data and qualitative data. a. Qualitative data includes information such as: · Purchase history · Website visits and views · Social media engagement · Conversion reports for marketing/sales activity · How many customer service tickets they've raised and whether their issues were resolved quickly. b. Quantitative data describes what happens when customers take action. It gives the “why” behind customer actions (or lack of, in some cases). Qualitative data covers information such as: · Direct customer feedback (collected through surveys and questionnaires) · Conversation analytics data (such as emotion, intent and effort) 3. Evaluate your data for behavior insights: Businesses will start evaluating their information for behavioral insights, ideally using a customer behavior analytics tool. There are 2 kinds of tools used: a) Types of buying behavior b) Approach towards buying Types of buying behavior · Extended Decision- Making: How much time does the consumer invest before deciding to buy a product? This includes asking friends, reading reviews, and looking at comparisons online. · Limited Decision- Making: Customers might be limited in what they buy due to availability. Are they buying a product because it is the only one available in the market? · Habitual Buying Behavior: What do customers regularly seek out and buy? · Variety-Seeking Buying Behavior: Sometimes, there are several very similar options in the market. Customers might be driven to buy and try several of the same product over time to see what the differences are. Are your customers comparing you to others in your market offering the same thing? Consumer Behavior Approaches · The Economic Man Approach: This theory suggests that customers always choose the lowest price product when offered a range of similar products at varying prices. Customers are believed to be driven by making the “rational” decision when reconciling their need and the limited money they have to meet that need. · The Cognitive Approach: This theory suggests that consumers act with a particular mental process in mind. This includes recognising they have a need, searching for information, evaluating their choices, making a purchase and then evaluating whether that purchase was a good one. · The Behaviorist Approach: This theory suggests that consumers’ behavior is shaped by stimuli and past experience. Negative and positive experiences serve as lessons to either avoid or do the same action again. CONSUMER BEHAVIOR IN THE INDIAN MARKET Consumer behavior varies drastically from country to country. While in the western world, countries such as Germany, Italy, and France, both the lower a­­nd upper class show similar buying behavior, in countries like India the upper class have a tendency to buy luxury cars, gadgets, and personal care products. However, people from the lower class are unable to spend money on these purchases, according to “ marketingtutor.net ”. Understanding and studying individuals’ demand is critical while trying to sell goods and services in the Indian Market. India has seen an unprecedented growth in the advancement of technology in the past decade. The proliferation of smartphones and internet access has transformed consumer behavior. E-commerce is booming, with consumers increasingly opting for online shopping due to convenience and competitive pricing. Social media platforms also play a critical role in shaping consumer opinions and trends. With a high birth rate of 16.949 births per 1000 people, a large percentage of its population is under 35, who drive market trends. They are tech-savvy, brand-conscious, and more inclined towards global products and services, yet they also value brands that resonate with local culture and traditions. India has a prominent divide between its urban and rural consumers. While the urban is influenced by global trends and exhibit high brand loyalty, rural consumers are driven by functionality and value-for-money. Marketing strategies must, therefore, be tailored to address these divergent needs effectively. Decision- making process: The consumer decision-making process among Indians is influenced by a blend of traditional values and modern trends. This process typically involves five stages: need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. 1. Need recognition: Indian consumers often identify their needs based on cultural norms, family requirements, and social status. For example, during festivals like Diwali, there is a heightened demand for new clothes, sweets, and electronics as these purchases are part of the cultural celebrations. Additionally, changes in life stages, such as marriage or the birth of a child, can trigger the recognition of new needs. 2. Information Search: Indian consumers are meticulous information gatherers. They rely heavily on word-of-mouth, seeking advice from family and friends, which is deeply rooted in the collectivist culture. With the advent of the internet, there is a significant rise in online searches, reviews, and social media influences. Urban consumers, in particular, utilize online resources extensively, while rural consumers might still depend more on traditional media and community recommendations. Eighty-five percent of Indian consumers check at least two data points (beyond prices and discounts) when they’re buying something, and roughly 50% do some sort of online research. Among the sorts of information that people look for are product reviews, manufacturing and expiration dates, and how a product compares with alternatives in terms of features. 3. Evaluating Alternatives: This stage involves comparing different products and brands based on various attributes such as price, quality, features, and after-sales service. Indian consumers are value-conscious and often seek the best deal for their money. The growing middle class exhibits a penchant for branded products that offer a combination of quality and status. However, regional preferences and local brands also play a crucial role, especially in rural markets. 4. Purchase Decision: The final purchase decision is influenced by several factors, including promotional offers, store ambiance, and salesperson behavior. In India, family opinion can significantly impact the final decision. Emotional factors, such as trust in a brand or a recommendation from a respected family member, can be decisive. 5. Post-Purchase Behavior: After purchasing, Indian consumers evaluate their satisfaction with the product or service. Positive experiences can lead to brand loyalty and word-of-mouth promotion, while negative experiences can result in complaints and a switch to competing brands. Given the community-oriented culture, sharing experiences with family and friends is common, amplifying the impact of post-purchase behavior on future consumer decisions. Changes in Indian consumer Behavior: In the last decade, there has been a significant change in the attitude of Indian shoppers. Factors such as higher disposable income, changes in tastes and preferences, and technological advancements are responsible for this change. Shopping to Stay Trendy: A desire to be in sync with the latest trends is increasingly driving purchases among Indian consumers. More than 60% of the respondents that were surveyed said that in the past year, in at least one category, they had purchased something because it was trendy and they felt like upgrading—not necessarily because they needed a replacement. Not surprisingly, the categories that ranked high for trendiness had products that tended to be those that someone might see and notice. For instance, in the year leading up to the survey, 58% of people buying gadgets such as tablets and laptop computers, and 53% of consumers buying four-wheel vehicles, purchased their products just to stay up to date with the latest in the market. Advent of Health and Wellness Awareness: Health consciousness has seeped into the national conversation in recent years, and our survey shows that 57% of consumers now spend on health and wellness. This includes 46% of consumers who are spending on services such as health checkups, gym memberships, and diet consultations, and 40% of consumers who are spending on healthier food. Valuing Experiences Over Products: In recent years, there has been a shift in the attitudes of urban Indians. They no longer want to prioritize (Jain) saving for their future- instead they want to live in the present. About 37% of urban Indians are trading down in certain products such as jewelry, mobile phones and apparel and spending on experiences like travel, adventure sports and theater. This shift in attitude can also be partly attributed to the positive attention which such experiences bring on social media. Renting Over Buying: In recent years, both high income and low income consumers are bending towards renting rather than buying. Not only is renting more affordable than buying, it also provides flexibility. Increasing number of young Indian professionals on temporary assignments prefer to not only rent their homes, but also furniture, smartphones and clothes. MAGGI CASE STUDY Maggi is one of the most iconic brands in Indian business history and has been an integral part of every Indian child. However, from the business standpoint, the most fascinating thing about Maggi is that back in 1983, both Maggi and instant noodles were completely alien to the majority of Indians. Nestlé single handedly created a 937 cr market and has been a market leader in the domain for 38 years. Despite giant rivals like ITC, Marico and Unilever, Maggi holds 60% market share in the instant noodle segment. The company managed this feat by studying the Indian consumer’s behavior in depth and utilized the information effectively. Instant Ramen Noodles was already an established market in Japan but not in other Asian countries like India. While most brands spent time and resources on how to penetrate a market, Nestlé instead spent time and money to find which market to penetrate. So instead of entering the Japanese market, where Nissin was already holding a monopoly, Nestlé preferred to avoid competing against them and instead looked at India, where they could establish their own monopoly. Nestlé believed in the fundamental marketing principle that ‘If you try to sell to everyone, you will end up selling to no one!’ So, their marketing team worked towards recognising their ideal target audience and picked 2 categories- Mothers and Children. The company realized that during that time, Indian working mothers were looking for a tasty and less tedious snack to give their kids after school. It was Nestlé’s intricate understanding of the mothers’ pain of being too tired to make an evening meal for the children which made them attractive. They managed to sell an emotion, rather than a product. They purposely showed their TV commercials between kids’ programs and showcased a mother with kids enjoying the taste. Apart from this tactic, Nestlé also reached out to school kids, sponsored quizzes and events and gave them free samples of Maggi. By studying the Indian consumer’s behavior further, they realized that a majority of the population is cost conscious and were not shifting to a ready-made packaged product. So, they launched Chotu (or small) Maggi which was priced at just 5rs, and managed to penetrate into the lower segment of the market. In addition, the communication was done in local vernacular languages and the efficient distribution system reached 2.2 million outlets across the country. In the early 2000’s, Indians started becoming health- conscious. Studying this change in behavior, Maggi launched Vegetable Atta Noodles, advertising it as healthy noodles made with whole wheat and vegetables, thereby retaining its no.1 spot in the instant noodles category. Maggi faced a setback when it was banned in 2015. It disappeared from the stores for 5 months and their market share went from 75% to 0 % within no time. But as soon as the ban was lifted, they came up with a “We Miss You Too” campaign, where the brand asked fans to share stories about how much they missed Maggi on social media. It turned out to be one of the most successful campaigns of Nestlé and sales skyrocketed. By 2017, Maggi was back to the #1 spot in the market, with a 60% share in the instant noodles market. CONCLUSION All in all, a thorough analysis of consumer behavior will enable businesses to get answers to the following questions: How does a customer access your brand? Is it through online searches for products, social media posts, marketing emails? When are they most likely to purchase a product in terms of day, week, month, season? What stops them from completing a purchase? Is it a broken payment system or a price point? What marketing or sales campaigns worked on them? What encouraged them to make multiple purchases? What did customers feel that made them make a purchase? Why were customers driven to make a purchase in the first place? How hard was it to make a purchase for these customers? This knowledge enables companies to tailor their products, services, and marketing strategies to meet the specific needs and preferences of their target audience. By analyzing consumer behavior, businesses can predict market trends, identify potential opportunities, and create more effective promotional campaigns. Consumer behavior studies also help in segmenting the market, allowing for more personalized marketing efforts that can lead to increased customer satisfaction and loyalty. By recognizing the factors that influence purchasing decisions, such as cultural, social, personal, and psychological elements, companies can better position their offerings to appeal to different consumer segments. Moreover, understanding consumer behavior is essential for innovation. It helps businesses to design new products that resonate with consumers' evolving needs and preferences. It also assists in identifying and addressing any pain points in the customer journey, thereby improving the overall customer experience. BIBLIOGRAPHY https://www.bcg.com/publications/2019/ten-trends-altering-consumer-behavior-india https://www.marketingtutor.net/what-is-consumer-behavior/#google_vignette https://www.bcg.com/publications/2019/ten-trends-altering-consumer-behavior-india https://economictimes.indiatimes.com/news/economy/indicators/view-indias-consumer-market-a-1-trillion-investment-opportunity/articleshow/94157242.cms https://marketing91.com/consumer-behavior/ Previous Next

  • EVs - The next big thing in saving the environment by Vidur Jhunjhunwala | Podar Eduspace

    < Back EVs - The next big thing in saving the environment by Vidur Jhunjhunwala This study investigated the background characteristics and environmental impacts of EVs with an emphasis on their potential in the Indian market. EV- The next big thing in saving the environmentELECTRIC VEHICLE The Primary components of a Battery Electric Vehicle (BEV) are • The Battery Pack • Inverter • Electric Motor • Controller • Charger • Charging Cable Battery Pack A BEVs range, propulsion and all its other features depend solely on the battery pack for power. BEVs use high voltage batteries (HV) to power them. The battery pack is built by connecting thousands of these cells in series and parallel to achieve the required amount of current output from these cells. An energy source like a battery needs to satisfy two important criteria-energy density and power density. These along with other features like easy maintenance, long life, inexpensive and fast charging. There are various batteries which have been used for BEVS. Few include lead-acid, Ni- Cd, Li-ion. The most common battery used in BEVs are Li- ion batteries. However, the industry is slowly drifting towards Na – ion batteries which are more efficient than Li-ion. 5 The figure depicts the multiple battery cells used in EV battery packs. In the Tesla Model S, cells are arranged into different modules. 16 of these modules are then connected in series and parallel to achieve the desired power output. Metallic inner tubes are passed through the gaps between the cells in which glycol coolant is passed through to prevent overheating of the batteries. The benefit of using multiple smaller cells instead of fewer big cells is the temperature is maintained evenly preventing thermal hotspots in the case of the small cells. Even temperature distribution results in higher battery life. The low height of the battery pack fitted close to the ground level, lowers the vehicles center of gravity which provides extra stability to the vehicle. The battery pack is also spread across the floor allowing for structural stability and protection from side collisions. As said earlier Lithium - ion cells are the most used cells for BEVs currently, they work on the principal of converting chemical energy to electrical energy via redox reactions. Understanding the functioning of Lithium-ion Cells (LICs) requires knowledge of lithium's properties that allow it to function as a cell. Lithium atoms are very reactive and easily give away their lone electron from the outermost shell. In contrast, lithium oxides are extremely stable compounds. Once the lithium atom is removed from its oxide, it becomes very unstable and easily gives away its outer electron. When there is a designated route for both the electron and the lithium-ion to reach the metal oxide separately, the lithium- ion will combine with the oxide while the electron moving towards the oxide will produce electric power. This is the fundamental concept that LICs function based on. An LIC is composed of a cathode, an anode, a separator, and two current collectors, usually constructed from copper and aluminum. 7 The graphite anode is typically referred to as the anode or negative terminal. The ring structure of graphite enables lithium ions to intercalate between its layers. The lithium metal oxide used as the cathode, also known as the positive terminal, is typically lithium cobalt oxide or lithium manganese oxide. Organic solvents usually contain lithium hexafluorophosphate as the electrolyte. This electrolyte is applied onto a partially permeable separator, allowing lithium ions to move between electrodes while blocking electron flow. Copper and aluminum current collectors have cathode and anode coatings applied to them. While charging, current goes to the cathode, leading to the separation of lithium ions from the oxide and their movement towards the anode via the electrolyte and separator. At the same time, electrons move through the external circuit to reach the anode and insert themselves into the graphite. While the battery is discharging, electricity is produced as electrons move from the anode to the cathode, powering the device, and lithium ions travel towards the cathode and embed themselves into the oxide material. This process is how an LIC generates power. Motor and Engine BEVs utilize motors instead of traditional Internal Combustion Engines to propel the vehicles. Electric vehicles are typically powered by either permanent magnet synchronous motors (PMSM) or induction motors (IM). PMSM It operates based on a magnetic field that moves and another magnetic field that remains constant. An electric motor is made up of two main components. The stationary part and the rotating part The stator is supplied with three phase alternating current, resulting in a rotating magnetic field within the stator. Synchronous speed (Ns) is the speeds at which the magnetic field revolves. The rotor consists of aluminum bars, permanent magnets, and silicon steel laminations. Placing the rotor inside the stator results in the generation of a current induced by the rotating magnetic field, leading to a torque that causes the rotor to rotate in sync with the magnetic field. The permanent magnet's opposite poles and the rotating magnetic field are attracted to each other, becoming magnetically locked and causing the rotor to turn until it reaches synchronous speed. The rotor's mechanical energy is transferred to the wheels, resulting in their rotation. Ns=120f/P f- frequency of electricity P- number of poles Inverter The inverter converts the DC supply from the battery to AC for the motor. The frequency of the current supplied can be altered by the inverter hence changing the speed of the car. The inverter also plays a role in the regenerative braking system. When there is no signal from the accelerator, the kinetic energy of the car is converted to electrical energy which is converted to DC voltage and adjusted to fit the batteries requirements charging the batteries. The inverter constantly alters the frequency of the AC current supplied to the stator as the rotor is slowing down, hence braking. Charging Electric vehicles (EVs) have the capability to connect to charging systems powered by either alternating current (AC) or direct current (DC). These systems are available in various configurations, commonly known as "levels." The amount of time required for your EV to be fully charged depends on the level you select. Chargers must also adhere to safety standards. Charging using alternating current. AC AC charging stations utilize a converter integrated within them to convert AC power received from the grid into DC power for charging the battery. The SAE has set various power levels for AC EV charging. •Level 1 offers the lowest speed, delivering either 12 amps or 16 amps based on the circuit, with a top voltage of 120 volts.Level 1 charging is appropriate for charging overnight, especially for smaller EVs, and can require up to 12.5 hours to fully charge. • Level 2 charging is the most frequently used method for electric vehicles. A special charging station called Electric Vehicle Supply Equipment (EVSE) is needed for a direct connection to the electrical grid. The electric vehicle has its own built-in charger which changes alternating current into direct current. Level 2 chargers provide 240 volts and up to 60 amps, resulting in a maximum power output of 14.4 kW. This enables charging at a significantly faster rate than Level 1. • Level 3 is the high-powered choice made for use at public charging stations. These are fixed in place and connected to supply over 14.4 kW of power. For instance, quick chargers can greatly decrease charging durations, frequently refilling an electric vehicle battery in approximately 30 minutes. DC In contrast to AC charging, DC systems provide a faster charging option for electric vehicles (EVs). These systems need special electrical wiring for higher power output and can be set up in either home garages or public charging stations. DC charging systems are classified based on the power they provide, ranging across various levels. • Level 1 (Up to 36 kW): Although the slowest DC option available, it could still be useful for occasional charging needs. • Level 2 (Up to 90 kW): This level is frequently used and provides a nice equilibrium between charging rate and power needs. • Level 3 (Up to 240 kW): These chargers are the strongest DC fast chargers available, cutting down on charging times but necessitating unique infrastructure. EV owners can optimize their charging experience by selecting the appropriate DC charging level that suits their needs and infrastructure access. ADVANTAGES OF EVs 1)EVs offer a clear environmental benefit. They produce zero tailpipe emissions eliminating harmful pollutants like CO2, SO2, NOX etc. This is particularly impactful in urban areas where traffic congestion can arouse further air quality issues. Though the electricity provided to the EVs is majorly from fossil fuels and other indirect emissions, in the long run the environmental harms are much lesser than ICEs. As the electricity transitions towards renewable sources the environmental benefits of EVs increase further. “A major concern about electric vehicles is that the supply chain, including the mining and processing of raw materials and the manufacturing of batteries, is far from clean,” says Gillingham. “So, if we priced the carbon embodied in these processes, the expectation is electric vehicles would be exorbitantly expensive. It turns out that’s not the case; if you level the playing field by also pricing the carbon in the fossil fuel vehicle supply chain, electric vehicle sales would actually increase.” 2)Though EVs cost more upfront, the long-term cost of EVs is lesser than their ICE counterparts due to easy maintenance especially if charged at home. EVs do not require oil changes, spark plug replacements and electricity costs per unit are generally lower than gasoline. If charged overnight when demand of electricity is low this cost becomes even lower. For these reasons many shipping companies are transitioning their shipment trucks to electric vehicles due to cheaper long-term price 3) EVs provide an instant torque and remains constant for a longer period, while providing almost similar power as ICE as the energy generated by the motor is given directly to the wheels hence allowing for peak output immediately. Risks of EVs Limited Range and Charging Infrastructure: One of the major concerns for potential EV buyers is range anxiety, the fear that an electric vehicle will run out of battery before reaching its destination. Although modern EVs have improved their range capabilities, they still fall short when compared to the distance that ICE vehicles can travel on a single tank of fuel. Moreover, the availability of charging infrastructure remains a significant challenge. In many regions, there are not enough charging stations, and those that exist may not be conveniently located or may offer slow charging speeds. This infrastructure gap makes long-distance travel and even daily use less convenient for EV owners, potentially limiting the widespread adoption of electric vehicles. Battery Degradation and Disposal Over time: the batteries in electric vehicles degrade, losing their capacity and efficiency. This degradation can result in reduced driving range and overall vehicle performance, necessitating costly battery replacements. The lifecycle of an EV battery is typically around 8-10 years, after which it may need to be replaced, adding to the total cost of ownership. Additionally, the disposal and recycling of used EV batteries present significant environmental challenges. Batteries contain hazardous materials that require careful handling and processing to avoid environmental contamination. While recycling technologies are improving, the infrastructure for large-scale battery recycling is still developing, posing potential environmental and logistical issues. Impact on Stakeholders who Lose Out Oil and Gas Industry: The shift towards electric vehicles directly impacts the demand for oil and gasoline, which are the primary fuels for internal combustion engine vehicles. As more consumers adopt EVs, the demand for fossil fuels decreases, leading to lower revenues for oil producers, refiners, and distributors. This reduction in demand can also affect global oil prices, creating market volatility and financial instability within the oil sector. Companies in this industry may face significant financial losses and may need to diversify their business models to remain viable in a future dominated by electric transportation. Traditional Automotive Industry Manufacturers that have historically focused on producing ICE vehicles may struggle to adapt quickly to the electric vehicle market. This transition requires substantial investment in new technologies, manufacturing processes, and workforce training. Companies that fail to adapt may lose market share and revenue. Additionally, suppliers of components specific to ICE vehicles, such as engines, transmissions, and exhaust systems, may see a decline in demand for their products. This shift can lead to job losses and economic disruptions in regions heavily dependent on ICE vehicle production and related industries. EVs in India Electric vehicles (EVs) in India represent one of the most rapidly growing and promising industries. As of 2023, EVs accounted for 6.5% of all vehicles in the country. According to the Indian Ministry of Road Transport and Highways, there were 1,334,385 electric vehicles on Indian roads by July 2022. India's ambitious goal is to have 30% of all vehicles be electric by 2030, a target that underscores its bold approach to reducing oil dependency. This shift could significantly impact global oil prices and market trends, given India's status as the world's third-largest oil importer. The country's strategy for electric vehicles carries significant global ramifications, given its rapidly expanding economy and population. A successful transition in India could serve as a model for other developing nations, potentially accelerating the decline in global oil consumption. As India advances towards cleaner energy and better battery and charging technology, the market for EVs is expected to rise exponentially. Currently, leading EV manufacturers in India include Tata Motors, with models like the Nexon EV, Tigor EV, and Tiago EV; Mahindra Electric, with the eVerito and the e2oPlus; and MG Motor India, with the MG ZS EV. The Indian EV market is at an inflection point, with EVs accounting for about 5% of total vehicle sales between October 2022 and September 2023. This penetration could exceed 40% by 2030, driven by strong adoption rates exceeding 45% in both the two-wheeler (2W) and three-wheeler (3W) categories. Despite this potential, several structural challenges need to be addressed to spur increased EV adoption. These challenges include the higher price of EVs compared to internal combustion engine (ICE) vehicles, range anxiety, limitations in charging infrastructure, and friction in customer financing. Companies like Hyundai plan to invest close to $4 billion in the Indian market over the next decade, focusing on launching new EVs, establishing charging stations, and setting up a battery pack assembly unit. Maruti Suzuki India, the country's top automaker by sales, also plans to have six EV models by 2030. Currently, 2W EVs form most EV sales, accounting for 85%–90% of all EV units sold in India, followed by 4W EVs (7%–9% of sales) and 3W EVs (5%–7% of sales). The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme's Phase II revision saw 2W EV penetration remain stable at around 5%, consistent with January-March 2023 levels. In contrast, 3W EV and 4W EV penetration levels experienced significant growth, with volumes more than doubling over the past 12 months due to their low total cost of ownership (TCO). India is home to numerous electric vehicle makers, offering a range of products from electric cars to scooters, catering to various needs and financial situations. The Indian government's ongoing support for electric vehicles suggests that the number of EVs on Indian streets will continue to rise soon. With significant investments from major automakers and continued innovation in EV technology, India is poised to become a global leader in electric vehicle adoption, setting a precedent for other nations to follow. Conclusion In conclusion. The economic and environmental issues brought about by our reliance on traditional internal combustion engine (ICE) vehicles are compellingly addressed by the rise of electric vehicles (EVs). This study investigated the background characteristics and environmental impacts of EVs with an emphasis on their potential in the Indian market. The primary battery electric vehicle (BEV) components—the battery pack inverter electric motor controller charger and charging cable—were examined in the study. Focusing on this aspect of EV power sources established an understanding of lithium-ion battery technology and operation. Furthermore, knowledge of permanent magnet synchronous motors (PMSMs) and induction motors (IMs) illuminates the workings of the electric vehicle powertrain. An important objective was to investigate the environmental advantages of electric cars. Even though electric cars don’t emit any pollutants into the atmosphere when they drive the article acknowledged that burning fossil fuels to produce electricity typically results in the release of additional emissions. But the long-term environmental advantages of electric cars were emphasized especially as the grid shifts to more sustainable energy sources. The article also discussed how electric vehicles may help to lessen noise pollution in urban areas. The study finds that although the initial costs of electric vehicles may be higher than those of cars with internal combustion engines over time the overall operating costs of EVs are lower. This can be explained by the fact that electricity is less expensive per unit than fuel and requires less maintenance. Furthermore, the topic of how large corporations like shipping companies could save money by converting to an electric fleet was covered. The advantages of this move were considered including the potential to set an example for other developing nations and a significant reduction in India’s reliance on oil. In summary electric cars present a viable future route for a more environmentally conscious transportation sector. Despite obstacles, government support, infrastructure for charging and advancements in battery technology are enabling a greater uptake of electric vehicles. India has a significant opportunity to reduce its dependency on fossil fuels and serve as a model for other developing nations wishing to transition to more environmentally friendly and sustainable modes of transportation thanks to its ambitious electric vehicle (EV) targets. References 1) https://solarsolution.co/ 2) https://www.energy.gov/energysaver/articles/how-lithium-ion-batteries- work#:~:text=The%20anode%20and%20cathode%20store,at%20the%20positive%20current%20collector. 3) https://www.youtube.com/watch?v=3SAxXUIre28&t=316s 4) https://batteryuniversity.com/article/bu-204-how-do-lithium-batteries-work 5) https://www.seai.ie/technologies/electric-vehicles/what-is-an-electric-vehicle/how-electric-vehicles-work/ 6) https://www.i4talk.com/threads/ice-vs-electric-power-and-torque-comparison.8801/ 7) https://www.global.toshiba/ww/products-solutions/battery/scib/product/module/sip/download/batteryschool/episode1.html 8) https://x-engineer.org/battery-electric-vehicle-bev/ 9) https://www.sciencedirect.com/topics/engineering/battery-electric-vehicle 10) https://www.quora.com/Can-an-electric-motor-act-as-both-a-generator-and-an-alternator-If-so-what-are-some- conditions-under-which-this-would-happen 11) https://www.chem.tamu.edu/rgroup/marcetta/chem362/HW/2017%20Student%20Posters/Lithium%20Ion%20Batteries.pdf 12) https://www.chegg.com/homework-help/questions-and-answers/lithium-ion-batteries-use-two-half-reactions-whose- standard-reduction-potentials-shown--co-q11586133 13) https://auto.economictimes.indiatimes.com/news/auto-components/what-are-the-types-of-electric-motors-which- motor-suits-your-ev-the- best/102099884#:~:text=PMSM%20is%20the%20most%20popular,applied%20in%20high%2Dspeed%20applications. https://www.kia.com/uk/about/news/what-are-the-benefits-of-torque-in-electric- cars/#:~:text=Another%20key%20advantage%20of%20the,Internal%20Combustion%20Engine%20(ICE) 14) https://www.kia.com/uk/about/news/what-are-the-benefits-of-torque-in-electric- cars/#:~:text=Another%20key%20advantage%20of%20the,Internal%20Combustion%20Engine%20(ICE).15) https://afdc.energy.gov/fuels/electricity-stations 16) https://avt.inl.gov/sites/default/files/pdf/fsev/compare.pdf 17) https://www.youtube.com/watch?v=fUDq0yS0-Mk 18) https://environment.yale.edu/news/article/yse-study-finds-electric-vehicles-provide-lower-carbon-emissions-through-additional 19) https://cleantechnica.com/2022/02/26/gas-cars-produce-more-supply-chain-emissions-than-evs-yale-university- study/#:~:text=%E2%80%9CA%20major%20concern%20about%20electric,vehicles%20would%20be%20exorbitantly%20expensive. 20)https://www.bain.com/insights/india-electric-vehicle-report- 2023/#:~:text=India's%20electric%20vehicle%20(EV)%20market,%2Dwheeler%20(3W)%20categories. 21)https://www.india-briefing.com/news/indias-prospects-as-an-ev-hub-consumer-market-and-production-capacity-30157.html/ 22)https://jmkresearch.com/category/electricvehicle/#:~:text=Electric%20Vehicles-,6.5%25%20of%20total%20vehicles%20sold%20i n%20India%20in%202023%20were,during%20the%20last%20calendar%20year. 23) https://www.youtube.com/watch?v=stq2E3sZYg0 24) https://www.irjmets.com/uploadedfiles/paper/issue_5_may_2022/24839/final/fin_irjmets1653897083.pdf 25) https://www.iea.org/policies/6201-national-electric-mobility-mission-plan-nemmp 26) https://diyguru.org/faq/top-10-ev-manufacturers-in-india/ 27) https://www.energy.gov/articles/history-electric-car 28) https://www.youtube.com/watch?v=-EG6rqA2vvA 29) https://www.youtube.com/watch?v=S6f1TbWRG3s 30) https://www.researchgate.net/figure/1-The-Structure-of-a-Permanent-Magnet-Synchronous-Motor_fig1_348740662/download? tp=eyJjb250ZXh0Ijp7ImZpcnN0UGFnZSI6Il9kaXJlY3QiLCJwYWdlIjoiX2RpcmVjdCJ9fQ 31)https://www.researchgate.net/publication/364737960 Electric_vehicles_a_review_of_their_components_and_technologies 32) https://www.researchgate.net/publication/350093457_A_Review_on_Electric_Vehicles_Technologies_and_Challenges Previous Next

  • Economics' Perspectives on Modern Finance by Dweej Desai | Podar Eduspace

    < Back Economics' Perspectives on Modern Finance by Dweej Desai In synthesizing these diverse elements, this research contributes not only to a nuanced understanding of economic systems and policies but also highlights the imperative of prudent financial management and responsible corporate governance in navigating the complexities of the contemporary economic landscape. Macroeconomics John Maynard Keynes is often referred to as the father of macroeconomics. Keynesian economics is a macroeconomic theory of total spending in the economy and its effects on output and employment. Keynesian economy was developed by the British economist John Maynard Keynes during the 1930s in order to understand the great depression. Keynesian economics is called the demand side economics. Keynes advocated the role of the government through investment expenditure and lower taxes to stimulate the aggregate demand and to pull the global economy out of the depression. Keynesian thoughts emphasized that an optimal economic performance could be achieved by government interventional policies. Fiscal and monetary policies were the primary tools recommended by Keynes to manage the economy and fight unemployment. Concept of consumption function – consumption function in economics is the relation between consumption spending and the various factors determining it. These include income, wealth, riskiness of the future, interest rates etc. it is an economic formula that represents the functional relationship between total consumption and gross national income. It describes the relation between consumption and disposable income. Yd = disposable income after taxes and compulsory contributions. Propensity to consume: - propensity is a term that closely means tendency. Consumption is a function of income, and it is noted that as income levels rise, the propensity to consume diminishes in relative terms. In absolute terms money spent increases. Average Propensity to save: - the ratio of total savings to total income is known as average propensity to save (APS). Thus APS = C/Y where C is consumption and Y is income. Marginal propensity to save - The ratio of increase in savings due to increase in income is known as marginal propensity to save. Thus MPS = DeltaS / DeltaY. Where S is savings and Y is income. Average propensity to consume: - the ratio of total consumption to total income is known as average propensity to consume (APC). Thus APC =C/Y (C = consumption & Y = income). Marginal propensity to consume (MPC): - this is a ratio of increase in consumption due to an increase in income DeltaC/DeltaY Note: - low income groups have a high propensity to consume and high-income groups have a low propensity to consume. A major concept in macroeconomics is the multiplier. The basic tenet of the concept of multiplier is - One person’s expenditure is another person’s income. Thus, during the depression if the government makes an autonomous investment, the propelling force of the multiplier is MPC. The higher the MPC the higher the value of the multiplier. Let us assume the government makes an investment of 100 million and the MPC is 0.8, this 100 million becomes the income of the economy. The earners of this money will now spend 80 million which will become the income of another set of people and this chain continues. The symbol for multiplier is K Thus, the multiplier K = 1/(1-MPC) or 1/MPS Let us assume the MPC is 0.6. then the multiplier will = 1/1 – 0.6 = 1/0.4 = 2.5 Tax multiplier: - when the government injects money into the economy it multiplies by a factor of the spending multiplier, but the government can also have an impact on aggregate expenditures because of taxes or transfers TM = MPC x Multiplier = MPC/MPS Another extremely important part of macroeconomics is Aggregate Demand and Aggregate supply. Aggregate demand – this is also called domestic final demand and is the total demand for final goods and services in an economy at a given time. It specifies the amount of goods and services that will be purchased at all price levels. Aggregate demand consists of consumer goods and services, capital goods, government spending, and exports and imports. AD = C + I + G + (X-M) AD = aggregate demand C = Consumption demand I = Investment demand G = Government Spending X = Total Exports M = Total Imports Aggregate demand curve The aggregate demand curve shows the quantity demanded at each price level. The y axis has price level of all final goods and services. The aggregate price level is measured in terms of CPI, or GDP deflator. On the x axis is the real GDP which is a sum total of all final goods produced in a given year. The aggregate demand curve has a negative slope. Shape of AD – downward sloping – reasons: - Foreign sector substitution effect: - if an economies price level rises foreign goods become relatively cheaper similarly foreigners too will buy less goods of this country. The overall result will be a lesser aggregate demand at higher price levels. Conversely at lower price levels more will be demanded by the consumers of home country and foreigners. - Wealth effect – When the price level is high, the purchasing power of the consumer falls hence less is demanded at higher price levels. Conversely at lower price levels more is demanded due to greater purchasing power. Changes in AD Factors affecting change in aggregate demand: 1) Consumer spending (C): If consumer incomes rise, so will their consumption and savings more over consumption may also increase if their future is secure 2) Investment spending (I): If the expected rate of return is high, firms will invest more since they are optimistic about future profitability, also they may invest more if the rate of interest falls. 3) Government Spending (G): Governments may inject money into the economy through autonomous investments or by reducing taxes or by increasing transfer payments (pensions etc.) 4) Net exports (X-M): o When we sell more goods and services to foreigners and buy fewer goods from them the AD increases. o Foreign incomes – when foreign economies are strong, they buy foreign goods. Therefore, X is greater. o Consumer tastes and preferences – when foreigners tastes and preferences are in favor of domestic goods X increases, therefore AD increases. o Exchange Rate – If the exchange rate of the home currency falls (rupee becomes weak) exports increase and so does the AD. Aggregate supply Aggregate supply is the total supply of final goods and services that firms in an economy plan on selling in a specific period, usually a year. Macroeconomic short run aggregate supply In stage one which is the initial stage we assume that the economy has been in a recession. Therefore, the aggregate demand is weak and so is the price level, up to GDPu. Hence the AS curve is nearly horizontal. In stage 2, AS approaches full unemployment and the price level rises due to increased aggregate demand and higher input cost. (Most of the time an economy operates in this stretch and hence the SRAS {Short run Aggregate supply} is commonly drawn with a positive slope) if the economy grows further and reaches the nations production capacity GDPc firms are left with no resources and no matter how high the price level, the real GDP does not expand, and the SRAS is nearly vertical. Macroeconomic Long Run Supply Curve (LRAS) Shifts in SRAS Factors affecting shifts in SRAS 1) Input prices /cost of production If COP (cost of production) falls the SRAS will increase 2) Tax policy If taxes are reduced or subsidy is given the SRAS will shift to the right 3) Deregulation If regulations are removed or lessened the SRAS shifts to the right 4) Political/ environmental reasons Wars, Natural disasters will shift the SRAS to the left Shifts in LRAS (Long run aggregate supply) The LRAS can shift if: 1) New natural resources are found. 2) Improvement in technology increases productivity. 3) Government policy incentives Different national policies such as unemployment doles produces the labor supply as then many prefer not to work. Similarly, if government gives tax incentives at greater investment, the LRAS will shift to the right. Fiscal Policy Fiscal Policy The policy of the government as regards taxation, public spending and borrowing, to achieve various objectives of economic policy is called fiscal policy Objectives of economic policy 1) Economic/price stability, 2) Full employment 3) Economic growth 4) Equity 5) Equilibrium in the balance of payment Expansionary fiscal policy When an economy is deflated and suffering a recession or depression the real GDP is low, unemployment is high the equilibrium between AD and AS is located near the horizontal part of the AS. To boost the economy the government has to boost the AD which is AD = C + I + G + (X-M). During a recession consumer demand C is low therefore investment demand I is also low. This is the cause of the recession to counter this the government reduces taxes (both direct and indirect), to boost the C and I. Besides that, government spending is increased. The net result of this moves would be an increase in AD from AD0 to AD1. Thereby, there is an increase in real GDP from GDP0 to GDP1. Contractionary fiscal policy. If an economy is operating at/beyond full employment and inflation is a problem government needs to contract the economy. The equilibrium between AD and AS is in the vertical section of the AS curve. To reduce the price level the government need to decrease AD. AD = C + I + G + (X-M). During inflation consumer demand and investment are very high. To counter this govt will raise taxes (direct and indirect) to reduce C and I. Government spending will be reduced. The net result of these moves brings about a fall in AD Deficits and surpluses A budget deficit exists when government spending is greater than government revenue in a given period of time. A budget surplus exists when government spending is less than government revenue in a given period of time. Modern welfare states invariably have a deficit budget. National Debt – this refers to the borrowing of the government during a deficit budget. It is meant to bridge the gap between expenditure and revenue. When deficits are an annual occurrence the national debt gets accumulated. It is therefore that more borrowing needs to be done to repay old debts. This is called a debt trap. Financing of deficits 1) Borrowing o From the public o From banks o From other financial institution § E.g., IMF o Countries of the rest of the world 2) Creating money Creation of new money is done to avoid high interest rates caused by borrowing however it’s disadvantage is the risk of inflation. Handling of Surplus during Contractionary Policy 1) The government can pay old debts 2) To retire bonds 3) To retain the money Idle surplus funds can be locked up and be stopped from recirculating Automatic stabilizers – an automatic stabilizer is an inbuilt mechanism that increases a budget deficit during a recessionary period and increases a budget surplus during an inflationary period, without any change made by the government. These mechanisms are inbuilt into the tax system which automatically regulate and stabilise the economy. Progressive taxes and transfers 1) When an economy is booming the GDP is increasing and more households and firms fall into higher tax brackets. A strong economy reduces the need for transfer payments such as unemployment doles, old age pensions etc The progressive tax system therefore has an automatic contractionary mechanism during a boom. 2) When an economy is in recession and the GDP is falling more households and firms fall into lower tax brackets A weak economy increases the need for transfer payments by way of welfare measures (unemployment dole, old age pension) this softens the recession and automatically leads to a bigger deficit. Therefore this tax system has an automatic inflationary mechanism. In the above diagram with the given level of government spending, net taxes rise or fall with GDP. They reduce the negative effects of a recession when the economy is weak and they reduce the negative effects of an inflation when the economy is unduly strong. Difficulties of fiscal policy Crowding out – if the government borrows funds to fuel an expansionary fiscal policy it will have an effect on the market of loanable funds. It decreases the supply of loanable funds to the private sector and leads to an increase in the interest rate. This reduces capital formation and investment by firms (private sector) and it thwarts national growth. When the interest rate increases firms and households are crowded out of the market of loanable funds. When the government is fighting inflation with a contractionary fiscal policy we see the opposite of crowding out. There is a budget surplus, the government returns debts, the supply of loanable funds increases and interest rates fall. This is referred to as crowding in. Net export effect – if the government is borrowing during an expansionary fiscal policy, the supply of loanable funds reduces, the interest rate rises and there is a crowding out effect. Private sector or private firms are unable to invest and produce, and this has a negative effect on the foreign exchange rate Economic growth and productivity Productivity and its possibilities are graphically represented through a production possibility frontier. The perimeter of the frontier shows the existing limit of production possibilities. If an economy is operating inside the frontier, there is underutilization of resources. Such is the case in developing economies or LDC’s (Less Developed Economies). For growth to happen in LDC’s, the point of productivity would move towards the frontier. If greater productivity is to be achieved beyond the frontier, it can happen in the following ways. - The quantity of economic resources should increase E.g., New minerals, oil and other resources may be discovered - The quality of the existing resources improves E.g., Human resources improve with better training - If the technology in a given economy improves Monetary Policy Fractional Reserve Banking and Money Creation Fractional reserve banking is a system in which only a fraction of the total money supply is held in reserve as currency. This is done to theoretically expand the economy. It allows the bank to keep only a portion of the consumer deposits while lending out the rest. Banks use customer deposits to create new loans. The process of fractional reserve banking expands the money supply of the economy but not without the risk which the bank may face by depositor withdrawals. This system increases the money supply by lending the money multiple times over and helps in economic development. The banks use customer deposits to make new loans and the reserves are held in balances at the central bank. Money creation – an example of how the fractional reserve system can multiply bank deposits into new created money. Illustration If the cash reserve ratio (CRR), then the reserve ratio(RR) = cash reserve/Total deposits = 0.1 Money multiplier: - M=1/RR If RR = 10% therefore M= 1/RR = 1/10% = 10 Central Bank Each country has one central bank. It is the apex financial authority of the country Functions: - The central bank regulates the economy, fixes interest rates and controls the supply of money. It is a bankers bank. It keeps the mandatory reserves of the commercial banks, it is a lender of the last resort to commercial banks, and it provides clearing house facility to the commercial banks in their role of money creation. It is the governments bank, it keeps governments money such as tax revenue, it gives loans to the government, it is the bank of issue, it is the governments agent and it keeps the governments reserves of gold, foreign currency etc. it controls the supply of money, e.g. during inflation it tries to reduce money supply and during recession it increases money supply . Expansionary monetary policy This occurs when the monetary authority uses its procedures to stimulate the economy. It is used to treat unemployment and recession and promote economic growth. In this case, the supply of money is enhanced to increase the aggregate demand. Contractionary monetary policy. Here the money supply is restricted to fight inflation. The AD during inflation is high and efforts are made to reduce the money supply due money tools. Quantitative measures of monetary policy / Quantitative tools Bank rate - this is the rate charged by the central bank to the commercial banks for short term loans. This is discounted and hence known as discount rate. During inflation, bank rate is raised. This reflects on the interest rate of commercial banks, increasing it. Due to a high interest rate, deposits increase and loans decrease thereby reducing money supply in circulation. This reduces AD and helps bring prices down. This is termed as contractionary monetary policy. During recession it is imperative in this case to increase AD. Bank rate is decreased this reflects on interest rate of commercial banks, decreasing it. Due to low interest rates, deposits decrease and loans increase, thereby increasing money supply in circulation. This increases AD and brings up prices. This is termed expansionary monetary policy. Credit Reserve Ratio(CRR): The central bank sets a minimum amount of reserve requirement to be held by commercial banks. The minimum reserve is determined by the central bank and no bank can keep less than this. This safeguards the deposits of the customers in commercial banks. During inflation the central bank raises CRR so that less money is given out by way of loans. This reduces the amount of money in circulation this reduces the AD During recession the central bank reduces CRR so that more money is given out by way of loans. This increases the amount of money in circulation and thus increases the AD. Open Market Operations : This is an activity by the central bank wherein it buys and sells securities or treasury bills on the open market in order to regulate the supply of money. During inflation, the central bank will sell securities or treasury bills on the open market in order to regulate the supply of money. This will reduce AD and help lower prices. During recession, the central bank will buy back securities on the open market and thereby increase the supply of money. This will increase AD and help increase prices. Quantitative measures/Tools of monetary policy : - these include customer credit and margin requirements. Coordination of Monetary and Fiscal Policy / A Monetary Fiscal Mix During Inflation Microeconomics Demand – Is the consumers desire as well as their willingness to pay a price for certain goods and services at a given period of time Law of demand – all other things being constant, when the price of a good rises, the quantity demanded for those good decreases. Quantity demanded and price have an inverse relationship. Demand Curve Note: - Demand curve is always sloping downwards from left to right. Determinants of demand (Non price factors affecting demand) - Tastes and preferences/Trends and Fashion - Income o Normal Goods: if income rises, demand for normal goods will rise o Inferior goods: if income rises demand for inferior goods will fall - Price of substitute goods E.g., Tea and coffee are substitutes. Price of tea has been fixed for a long time but there is still a fall in the demand for tea due to the decrease in the price of coffee since consumers shifted to consume coffee. - Price of complimentary goods Complimentary goods are jointly consumed e.g., bread and butter. The demand for butter falls if price of bread increases. - Future expectations of price If there is an expectation that price will rise in the future, qty demanded will rise today. - Number of buyers in the market/ population Demand curve shifts when there are changes in the determinants of demand. Rightward shift = Increase in Demand Leftward Shift = Decrease in Demand Market forces – demand and supply Supply Law of supply – if price increases, the qty supplied increases; vice versa. Price and supply have a positive correlation. Note: the supply curve is sloping upwards from left to right. Determinants of supply - Cost of production: if the cost of production increases, then the supplier will be demotivated to produce/supply more as the profit reduces for the supplier. Therefore, the supply curve will shift to the left. - Technology and productivity: with technological improvement the productivity increases and the cost per unit might also fall. Hence profit will increase, and the supplier would like to sell more. Therefore, the supply curve will shift right. - Taxes: tax is an amount charged by the government when a particular product is sold/produced. When the tax increases. The profits reduce for the supplier due to which the supply will decrease, and the supply curve will shift to the left. - Subsidy: subsidy is an amount of aid or gift given by the government to the suppliers to help increase the productivity or to boost a particular sector of the economy. Subsidy reduces the cost of production, which motivates the supplier to supply more, hence the supply curve shifts to the right. - Price expectations: if the supplier expects the price to rise in the near future, the qty supplied today would fall, vice versa. - Number of suppliers: when more suppliers enter a market, we expect the supply curve to shift to the right. For e.g. During the strawberry season, many farmers try to grow strawberries in their free farmlands and hence supply of strawberries increases. Market Price - Over Supply – Supply>Demand – Price will Decrease - Shortage – Demand>Supply – Price will Increase Market equilibrium is the point at which demand, and supply curves meet. It is at that point at which price is set and that amount of a good is supplied and demanded. It is the point at which supply and demand of a good are equal at a fixed price level. Welfare Analysis Society is typically made up by consumers and producers. Hence in any particular free market when the demand meets the supply there is equilibrium. At equilibrium there is no wastage of resources, and the total welfare is maximized, which means all the producers and the consumers are happy with the situation. Free market – no government intervention – no taxes, no minimum wage etc. Total Welfare/Total Surplus – It is the sum of consumer surplus and producer’s surplus. Consumer Surplus – the situation in which the consumer benefits by getting the desired quantity of goods or services at the expected price or even lower. E.g., the consumer is willing to pay 5 dollars for an apple, but he gets it at 3 dollars then the consumers surplus is 2 dollars Producer Surplus – the situation in which the producer benefits by selling the desired quantity of goods or services at his expected price or even higher. E.g., the producer is willing to sell an apple for 5 dollars, but he gets 8 dollars then the producer’s surplus is 3 dollars. Consumers choice Utility It is the benefit or the satisfaction that the consumers experience by consuming goods and service. Total Utility It is the total amount of benefit or satisfaction received from the consumption of certain amount of a good or services. Marginal Utility It is the benefit or satisfaction received by consuming one extra unit of a particular good or service. e.g., If a person goes from 0 to 1 glass of water, his happiness increases from 0 to 10 points. Similarly, when he drinks 1 more glass of water the additional utility is 8 points. Diminishing Marginal Utility: in the table above, we can see a relationship between total utility and marginal utility. We can see that total utility increases but at a slower rate, and marginal utility keeps falling. Hence the law of diminishing marginal utility tells us that in a given period of time the marginal utility by consuming 1 extra unit falls (total utility increases at a decreasing rate). Constrained Utility Maximization With a fixed daily income and a price attached to consuming each additional unit is a constraint to our consumption pattern. So, we must ask aur self if one additional bottle of water costs me $1, then is it with the additional utility of 8 points. If the answer is yes, then you will consume the additional water bottle. If no, then do not consume it. Consumers are constrained by two things, price, and fixed income. One will keep consuming apples until a point when the utility of the last apple consumed is equal to the price I pay for that apple. Most consumers allocate limited income between many goods and services, each with a price that must be payed. Conclusion In this project, I conducted a comprehensive examination of the intricate relationship between economics and finance. The analysis encompassed macroeconomic theories, including the foundational contributions of John Maynard Keynes, emphasizing the essential role of government intervention in economic cycles. Key concepts such as the consumption function, propensity to consume, and the multiplier effect were explored, shedding light on their impact on aggregate demand. Beyond macroeconomics, the project delved into the complexities of aggregate demand and supply, scrutinizing their determinants and the factors influencing their shifts. A detailed exploration of fiscal policy, covering both expansionary and contractionary measures, provided insights into the government's pivotal role in shaping economic outcomes, including the management of budget deficits, surpluses, and the national debt. Shifting focus to monetary policy, the project elucidated fractional reserve banking, money creation, and the quantitative tools employed by central banks. The coordination of monetary and fiscal policies, known as a monetary-fiscal mix, was analyzed in the context of effectively managing inflationary and recessionary gaps. Within the microeconomic realm, fundamental principles such as the law of demand and supply, market equilibrium, and welfare analysis were explored. The study of utility maximization theories deepened our understanding of individual consumer choices within the broader economic landscape, especially when faced with constrained decision-making due to limited resources. Moreover, this project took a holistic approach by addressing critical dimensions of risk management and corporate governance. By emphasizing their significance, it underscored the pivotal role these elements play in maintaining financial stability and fostering ethical business practices. In synthesizing these diverse elements, this research contributes not only to a nuanced understanding of economic systems and policies but also highlights the imperative of prudent financial management and responsible corporate governance in navigating the complexities of the contemporary economic landscape. Previous Next

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