Mains Answer Writing
Concept Mapping Mentorship- Covering Syllabus Through Themes
- GS & Optional
Economic indicators like the Purchasing Managers' Index (PMI) provide insights into economic trends but have inherent limitations. Discuss the significance of PMI in assessing economic health and its limitations as an economic indicator.
Category: Economy (GS -III),
Test Date: 08 Mar 2025
Approach
- Introduction: Define Purchasing Managers’ Index (PMI) as an economic indicator used to measure business activity in the manufacturing and services sectors.
- Significance of PMI in Assessing Economic Health:
- Indicator of Business Activity: Helps gauge expansion or contraction in manufacturing and services sectors.
- Leading Economic Indicator: Provides early insights into economic trends before official GDP data.
- Investor and Policymaker Tool: Guides investment decisions and monetary policy formulation.
- Global Comparability: Standardized measure used across economies for cross-country analysis.
- Limitations of PMI as an Economic Indicator: Limited Sectoral Coverage; Survey-Based Nature; Short-Term Volatility; Lack of Quantitative Data
- Wrap up your answer
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