Economy, Macro & Market Cycles

Gross domestic product adjusted to remove the effect of price changes, so it measures output rather than value.

Real GDP = Nominal GDP / GDP Deflator x 100 ₹ crore

The return on an investment after adjusting for inflation, measuring the gain in purchasing power.

Real Return = (1 + Nominal Return) / (1 + Inflation Rate) - 1 %

Economy, Macro & Market Cycles

A significant, broad-based decline in economic activity lasting more than a few months.

Common working test: two consecutive quarters of negative real GDP growth qualitative

Economy, Macro & Market Cycles

The phase following a trough in which activity begins rising again toward and past its previous peak.

Test: real GDP is rising from a trough, though it may still be below the prior peak qualitative

Economy, Macro & Market Cycles

The rate at which the Reserve Bank lends short-term funds to commercial banks against government securities.

Test: it is the policy rate at which banks borrow overnight from the central bank under the liquidity adjustment facility %

Economy, Macro & Market Cycles

The excess of the government's revenue expenditure over its revenue receipts.

Revenue Deficit = Revenue Expenditure - Revenue Receipts %

Economy, Macro & Market Cycles

The rate at which the Reserve Bank borrows from commercial banks, absorbing surplus liquidity from the system.

Test: it is the rate the central bank pays banks for parking surplus funds with it %

Economy, Macro & Market Cycles

A fall in the rupee's value against another currency, so more rupees are needed to buy the same foreign amount.

Depreciation % = (New Rate - Old Rate) / Old Rate x 100, quoted as rupees per unit of foreign currency %