Economic Environment of Business: Assignment 8 for January 28th, 2016

1. Read Section 7.2 (pp 274 to 278) from the text book:

2. Shyam, with a monthly income of Rs 6,000/- is staying in Pardi Village, The village has no access to any bank or any other financial institution. Petty thefts from houses are common occurrence in the village. Seeta another resident of the village is a widow and gets pension from the government under a family welfare scheme. Her son is studying in 10th std. She needs money to pay for her sons tuition fees after every quarter. In the same village, Ram with engineering degree is residing. Ram has a brilliant idea of improving the mobile technology. The implementation of this idea will require Rs 10 lakhs. Radha, also a resident of the same village, has inherited wealth of Rs 15 lakhs from her grandfather. Though Radha is a rich lady, she is just 10th pass. Radha does not know Ram. And, being not very well educated, she cannot assess the viability of Rams project? On the request of villagers, a Grammen Bank opened its branch in the Pardi village in this January. The branch has a security guard in its premises. The bank offers saving deposits from which the deposit holders can withdraw money at any time. It also offers fixed deposits of maturity period varying from 3 months to 5 years. The branch has a qualified staff, which includes a legal advisor and finance and operation managers.On the basis of the above information, answer the following questions in your note book (not more than 100 words for each answer)1. Will Shyam save more or less in the presence of a bank branch? Why?2. Will Seeta save more or less in the productive assets (the assets which provide return year after year) in the presence of bank branch? Why?3. Will Radha lend the inherited money to Ram? Why?4. Will the presence of bank branch facilitate in the growth of the village? Why?

Bring the notebook with written answers to the Class.