Fundamentals Of Macro Economy

Vivek Singh – Fundamentals of Macro Economy

1) National Income

• GDP: Final goods & services within domestic territory.
• GNP: GDP + NFIA (Net Factor Income from Abroad).
• NNP: GNP – Depreciation. National Income = NNP at Factor Cost.
• GDP Deflator = (Nominal GDP / Real GDP) × 100.

2) Inflation

• Types: Demand-pull, Cost-push, Stagflation, Deflation.
• Measures: CPI, WPI, GDP Deflator, Core CPI.
• Target: CPI-Combined (4% ±2%).

3) Unemployment

• Open, Disguised (agri), Structural, Frictional, Cyclical.

4) Money & Banking

• M1: Currency + demand deposits. M3: M1 + time deposits.
• RBI tools: Repo, Reverse Repo, CRR, SLR, OMO.

5) Business Cycle

Boom → Recession → Depression → Recovery.

6) Balance of Payments

Current Account: Goods, Services, Transfers. Capital/Financial: FDI, FPI, Loans. BoT = Goods only; BoP = Complete external account.

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