Nepalese Economy Case Study

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CHAPTER ONE INTRODUCTION 1.1 General Background of Nepalese Economy Nepal is a small beautiful country with highest mountain, Mt. Everest and with third highest mountain, Kanchanganga in the world. Nepal has a scenic beauty with high prospects of tourism development. Besides, the country is very rich in water resources, mineral resources, and forest resources. It is a culturally and ethnically diverse country which is able to captivate a number of people in the world to visit Nepal for different purposes. Although Nepal is rich in natural resources, it is one of the poorest and least developed countries in the world with very low per-capita income less than $ 400 in 2012 and nearly one-fourth of the population is living below the poverty line . Nepal is the agriculture dominated country, providing a livelihood for three-fourth (3/4) of the population and accounting for a little over one-third of GDP. However, the agriculture system of the country is primitive with rarely professionalized. The agro-industrial activity of Nepal mainly involves the processing of agricultural products like pulses, jute, sugarcane, tobacco, and grain. These agro-industrial activities are more labor intensive that cannot compete with the foreign products in quality as well as prices. Agriculture is the mainstay of the economy resulting…show more content…
The effectiveness of the relationship between money supply and price level is tested applying various modern econometric tools and models. The general objective of this study is to explore and examine the state of relationship between money supply and price level in the economy of Nepal in the line of Quantity Theory of Money. In order to achieve the general objective, the present study has set the following specific

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