The Economic and Finance Society of Manipal

Working Committee Recruitments for AY 2023-24

Submitter:
TEJAS MODI
Sem- I
Electronics and Communication Engineering
230907482

Economics

Q)What's the difference between Macro and Microeconomics? Also mention their
importance in the country?

SR.NO. MICROECONOMICS MACROECONOMICS

1. Microeconomics studies individuals and Macroeconomics studies the

business decisions impact of business decisions
made by countries and
governments

2. Microeconomics focuses on supply and demand Macroeconomics focuses on

and other forces that determine price levels the entire economy while
taking a top-down approach
to determine its course and
nature

3. Potential investors can use microeconomics to Macroeconomics is an

make their decisions analytical tool used to craft
economic and fiscal policy

4. Microeconomics shows the goods and services Macroeconomics ensure that

needed for a robust economy. It also will project the economic resources
which goods and services will have demand in available in the country are
future optimally utilised
Q) How is the ongoing war between Israel and Palestine going to impact the Indian
economy?

The ongoing war between Israel and Palestine is more political and impacts not just India, but
the world economy too, just like the Russia-Ukraine war, the Israel-Palestine war involves major
world powers which could cause inflation all around the world, hampering India’s economy
along with the others.

● The first major repercussion was the “Oil shock”, in the year 1973, during the
Israel-Palestine “Yom Kippur War”, The OAPEC (Organization of the Arab Petroleum
Exporting Countries) used their oil as a political weapon and reduced the flow of oil to
the United States and other countries supporting Israel, by quadrupling the price of oil,
which caused a recession all over the world, the current Israel-Palestine conflict, if
prolonged, could see a similar retaliation from the Arab countries, who ideologically
support Palestine.

● The second major repercussion came in the form of shocking news, on the 19th of
November, Houthi rebels backed by Yemen and Iran, hijacked Galaxy Leader, a vehicle
carrier affiliated with Israel, on its way to India, this incident brought to light a possibility
of sea trade between India and Israel, being blocked off in the crucial Red Sea shipping
route, through the “strait of Hormuz”, this route alone is used to transport 28% of India’s
seaborne oil imports, making India’s trade vulnerable.

● The third major repercussion affects the very recent agreement that took place on the
sidelines of the G 20 Summit in India, that being, the India-Middile East-Europe
Economic Corridor, comprising 2 corridors, the eastern corridor, connecting India to the
Arabian Gulf, and the northern corridor connecting the Arabian Gulf to Europe, through a
mixture of ship and crossborder rail routes, going through UAE, Saudi Arabia, Jordan,
Israel and Europe, but now due to the political nature of the conflict, these plans could
face delays or even complete cancellation.

● Fourthly, while the Israel-Hamas might not directly impact India and Indians, but if the
other actors, like Iran, Hezbollah, and Saudi Arabia take part in this conflict, it could
severely affect India’s diplomatic ties with these countries, directly affecting India’s
energy supply.

Finance

Q)What is meant by Short Selling and Long Selling? also mention the advantages
and disadvantages of each
 ● Long selling is an investment to buy stocks (or other assets) with an intention to
gaining profit from the market value of the same instrument, increasing. Long
selling is a common practice when the asset is bought with the expectation that its
price will rise in the future.
● Advantages:
​ Profit Potential: Going long allows investors to profit from the upward movement of an
asset. If the asset's price increases, investors can sell it at a higher price than they paid.
​ Dividend Income: Long investors may receive dividends if the assets they hold are
dividend-paying. This can provide a steady income stream in addition to potential capital
gains.
​
​ Disadvantages
​ Losses in a Downtrend: If the market or a specific asset enters a downtrend, long
positions may experience losses. Investors could end up holding onto assets that decrease
in value.
​ Limited Gain in Bear Markets: In a bear market, the opportunities for profit are limited
for long positions, as the overall market sentiment is negative.
​

● Short Selling, on the other hand, involves selling an asset with the hope of its
price falling down and later, buying it back later at a lower price. In a short sale,
an investor borrows stocks from brokers and sells them on the open market,
expecting the price to fall, The goal of a short selling is to buy back the shares at a
lower price than the one at which they initially sold, thereby making a profit from
the price difference.
● Advantages:
​ Profit from Decline: Short selling allows investors to profit from a decline in the price of
an asset. This can be especially beneficial in bear markets or when individual stocks are
expected to decrease in value.
● Disadvantages:
​ Unlimited Losses: Unlike going long, where the maximum loss is the initial investment,
short selling carries the risk of unlimited losses. If the price of the shorted asset rises
significantly, the losses for the short seller can be substantial.
​ Borrowing Costs: Short selling involves borrowing shares, and there may be costs
associated with borrowing, such as interest payments. Additionally, if the stock is in high
demand for shorting, the cost of borrowing may increase.

Fintech
 Q) What are Mutual Funds? How can you choose whether you want to invest in
Mutual Funds or Stock market?

A mutual fund pools money from multiple investors to invest in a diversified portfolio, managed
by professionals. It offers diversification, professional management, liquidity, and various types
of funds.
Consideration:
​ Risk Tolerance:
● Mutual Funds: Lower risk due to diversification.
● Stock Market: Higher risk with individual stock volatility.
​ Diversification:
● Mutual Funds: Broad diversification.
● Stock Market: Requires selecting individual companies.
​ Time Commitment:
● Mutual Funds: Less active management.
● Stock Market: More time and effort.
​ Investment Goals:
● Mutual Funds: Long-term goals, hands-off approach.
● Stock Market: Active involvement, understanding of risks.
​ Cost Considerations:
● Mutual Funds: Fees and expenses.
● Stock Market: Brokerage fees and potential market impact costs.
Decision:
Depends on risk tolerance, preference for diversification, time commitment, investment goals,
and cost considerations. Some investors opt for a mix of both for a balanced approach. Consider
consulting a financial advisor for personalized advice.