Economy, Macro & Market Cycles

The proportion of installed productive capacity that is actually being used.

Capacity Utilisation = Actual Output / Maximum Possible Output x 100 %

The proportion of deposits banks must hold as cash with the Reserve Bank, earning no interest.

Required Reserves = Net Demand and Time Liabilities x Cash Reserve Ratio %

Economy, Macro & Market Cycles

The long swing in commodity prices driven by the lag between demand changes and the supply response.

Test: high prices induce investment in new supply, which arrives years later and depresses prices, discouraging investment in turn qualitative

Economy, Macro & Market Cycles

An index tracking the price of a fixed basket of goods and services bought by households.

CPI = (Cost of the Basket in the Current Period / Cost of the Basket in the Base Period) x 100 index points

Economy, Macro & Market Cycles

Inflation excluding food and fuel, whose prices are volatile and driven largely by supply conditions.

Core Inflation = Headline Inflation computed on the basket excluding food and fuel components %

Economy, Macro & Market Cycles

A decline of roughly 10% or more from a recent peak, short of the 20% that defines a bear market.

Test: the index has fallen between 10% and 20% from its prior high %

Economy, Macro & Market Cycles

The rate of increase in bank lending to the economy.

Credit Growth = (Current Outstanding Bank Credit - Year-Earlier Credit) / Year-Earlier Credit x 100 %

Economy, Macro & Market Cycles

The price of crude oil, a key macroeconomic variable for India because most of its requirement is imported.

Impact on Import Bill = Change in Price per Barrel x Annual Barrels Imported %

Economy, Macro & Market Cycles

The excess of a country's payments for imports, services and transfers over its receipts from them.

Current Account Balance = Trade Balance + Net Services + Net Primary Income + Net Transfers %