Situation of the Economic Conditions of the United States of America and India - Essay Example

This depicts that a greater percentage of the citizens in that country are striving to be in better places and constantly improving the state of the country through the concept of the invisible hand. In India, the economic condition is not that stable. This is because only a smaller portion of the population strives to make ends meet while a greater percentage is always dragging the country backward economically because they don’t work hard and deliver. This is very challenging since the economy is always torn in an imbalanced proportion.

Studies from economists behind this theory argue that it developed an idea of a subsistence level to model the theory. The economists claimed that if the real Gross Domestic Product rose above this subsistence level of income, it would cause the population to increase and bring the real gross domestic product back down to the subsistence level. In India, the population is extremely high and this means that the real gross domestic product is always above the subsistence level of income thus bringing the gross domestic product back down to the subsistence level.

The opposite happens in the United States of America and that is why the gross domestic product there is far better than that for India. A strong economic growth rate cannot be positive for high population growth. This is because when the population increases, resources for economic growth will be limited. This will therefore hinder growth in the economy due to the imbalance. This defect or problem can be prevented by factors such as controlling population growth by implementing birth policies. The birth rate should be moderate to make the resources adequate for the country3.

When the country has a poor or weak growth rate it is a big hindrance to the economic growth. This is because there will be an inadequate labor force in various organizations in the country. Labor is a fundamental factor of production and should therefore be supplied adequately in an economy. To offset this In the short run a decrease in technology will lead to a decrease in the number of capital resources and with that, the output will generally decline. In the long run, a decrease in technology will experience the opposite of what happens in the short run.

The US economy posts the most robust economic growth in the current analysis.
India is one of the countries with a relatively weaker economic growth
The Gross domestic product for the United States is 16.77 trillion US dollars
The Gross domestic product for India is 1.877 trillion US dollars
The unemployment rate in the United States is 8.2%

The unemployment rate in India is 6.3%
Human capital index; The United States ranks 16 in the measure of the economic value of its workers.
India ranks 78 on Human Capital Index
The literacy rate in the United States is 99%. Aged 15 and above can read and write.
The literacy rate in India is 74.4%. seven and over years can read and write.
In the United States, the population growth rate is 0.7% annual change
In India, the population growth rate is a 1.2% annual change.
The index of economic freedom in the United States is ranked as the 12th freest in the 2015 index.
In the index of economic freedom, India is ranked 128th freest in the 2015 index .

The investment rate in India is higher than that of the United States as India is the second most attractive in the world.
The saving rate in the United States is 4.9% as compared to India which is extremely low as per the market analysis.
The latest inflation rate for the United States is –0.1%through the twelve months that came to an end in January 2015.
The inflation rate in India was recorded at 5.11% by the end of January 2015.
The above table represents a report that is designed to evaluate how differences in the economic growth in both countries (USA and India)
The economic data gathered in both countries will facilitate proper economic study.

The situation of economic conditions of both countries
In the United States of America, the economic condition is extremely favorable. This depicts that a greater percentage of the citizens in that country are striving to be in better places and constantly improving the state of the country through the concept of the invisible hand.
In India, the economic condition is not that stable. This is because only a smaller portion of the population strives to make ends meet while a greater percentage is always dragging the country backward economically because they don’t work hard and deliver. This is very challenging since the economy is always torn in an imbalanced proportion.
Appraisal of growth theory in both countries

Studies from economists behind this theory argue that it developed an idea of a subsistence level to model the theory. The economists claimed that if the real Gross Domestic Product rose above this subsistence level of income, it would cause the population to increase and bring the real gross domestic product back down to the subsistence level.
In India, the population is extremely high and this means that the real gross domestic product is always above the subsistence level of income thus bringing the gross domestic product back down to the subsistence level. The opposite happens in the United States of America and that is why the gross domestic product there is far better than that for India.

Strong economic growth prospect
A strong economic growth rate cannot be positive for high population growth. This is because when the population increases, resources for economic growth will be limited. This will therefore hinder growth in the economy due to the imbalance. This defect or problem can be prevented by factors such as controlling population growth by implementing birth policies. The birth rate should be moderate to make the resources adequate for the country.
Labor is a fundamental factor of production and should therefore be supplied adequately in an economy. To offset this problem, control measures such as the prevention of infant death rate and providing healthcare to the labor force population should be approved.