Question

How the world is separated by risk , economics, and liquidity? Name the countries and explain why they are in the position that they are in, in relation to other countries.

Answer 1

The economy of any country depends upon its population, availability of natural resources, literacy rate, etc. During a particular period, economy may rise or may fall, depending on various factors, which may be due to factors within their own country (internal factors) and factors outside the country (external factors). The contingency that the economy may rise or fall is commonly called as risk, along with different other factors. Further, liquidity of any country depends upon the policies furnished by its central banks, status of economy, the borrowing and lending strategies used, etc. Hence, all these terms are interdependent to each other.

Where the population of a country is utilized in the correct way, by optimum utilisation of natural resources, that economy is said to be best regulated. USA has limited population but have larger reserves of natural resources. Also, they are utilising these resources very optimumly. Thus, their economy is greater as compared to India who has very large no of population, but is having limited resources. Also, literacy rate in India is less than that of USA, and thus India is not able to utilise its resources efficiently. Further, they have to depend on other countries (i.e. import resources from other countries), thus attributing to their lower economy.

COnversly, if you would like to compare USA and China, both are the economy power house of the world. However, their risk, dynamics, culture etc are very different. Both the countries are often seen to be in a trade war, which affects other countries too. Where China is most commonly called as manufacturing hub of the world, where products can be manufactured faster and cheaper, USA is commonly called as the technology hub of the world, wherein all the big companies are located. The reason why USA and China are most commonly seen in trade war is because majority of the companies in USA have their manufacturing units in China. Thus the employment that should be given to USA citizens are being transfered to China, and because of this China's economy is rising instead of USA. Further, USA and China are the top two economies in the world, and thus their is always a rivalry between them. Also, both the countries have different ideologies in regards to defense mechanism around the globe, and hence it also counts as a factor to their evergreen rivalry.