Indian Economy Basics Cheat Sheet

Key Definitions

• GDP (Gross Domestic Product): Total value of all goods and services produced in a country in a year.

• NDP (Net Domestic Product): GDP minus depreciation on a country's capital goods.

• Inflation: Rate at which the general level of prices for goods and services rises.

• Deflation: Decrease in the general price level of goods and services.

Important Concepts

Economic Sectors

• Primary Sector: Agriculture, forestry, fishing, mining.

• Secondary Sector: Manufacturing and construction.

• Tertiary Sector: Services like banking, education, healthcare.

Economic Indicators

• Unemployment Rate: Percentage of the labor force that is jobless.

• Balance of Payments: Record of all economic transactions between residents of a country and the rest of the world.

Key Formulas

• C: Consumption

• I: Investment

• G: Government Spending

• X: Exports

• M: Imports

Inflation Rate = (CPI_current - CPI_previous) / CPI_previous * 100

• CPI: Consumer Price Index

Common Mistakes to Avoid

Common Mistake: Confusing GDP with NDP; remember NDP accounts for depreciation.

Memory Tricks

Tip: "GDI" — Growth, Development, Indicators — remember the focus areas of the economy.

Key Diagrams

Economic Sectors:
   Primary
      |
   Secondary
      |
   Tertiary

GDP Components:
    C
   /|\
  I G X
   \|/
    M