Analysis with Shaurya

INTRODUCTION  Inflation or “ mehengaai “, one of the most discussed topics between all of us. It measures how much prices are increased on an average.Inflation is measured at producer level as well as consumer level. CPI measures the retail inflation, which means that CPI measures average changes in prices of goods which a consumer is paying. WPI ( wholesale price index) measures inflation at producer level which means that it measures average changes in prices of goods which a producer is paying. In this article we will discuss various aspects about Consumer Price Index. CALCULATION  The calculation of consumer price index is divided into 5 steps. Selection of Goods  In the first step economists try to find out those goods which consumers are buying frequently. And accordingly they assign weightage to the goods. This weightage of goods is dependent on how frequently people in an economy are buying those goods.  In this way the Economist tries to fix a set of goods with different weigh

GDP GDP or gross domestic product measures the value of goods and services produced in an economy. GDP is calculated quarterly. It is the total expenditures on final goods and services produced in an economy in a period of time. It also measures total revenue generated in an economy. You might think that how is it possible that a single measurement is measuring both revenue and expenditure. But it's true, as for the economy as a whole, total revenue is equal to total expenditure. It is because if you buy a product you pay for it, and the one who is selling you also belongs to the same country. Now you may think that what if we buy a foreign product. We will discuss this when we will calculate GDP. CALCULATION OF GDP GDP = C + I + G + ( X-M) where, C = private consumption expenditure.  It includes expenditures on all goods and services which are done by people in an economy but it does not include housing purchases. We add housing purchase in the investment section. I = Investments.