Module 2 of 4 in Macroeconomics and financial markets
Growth, cycles and government
GDP, employment and consumption, fiscal policy and government borrowing, and the economic cycle.
4 lessons in this module. Progress is saved in your browser as you go.
This module explains how the size and growth of the economy are measured, what drives spending, how government taxes, spending and borrowing affect the economy and markets, and how economies move through cycles.
By the end of this module you should be able to
- Explain how GDP is measured and the difference between nominal and real growth.
- Describe how employment, consumption and investment drive economic growth.
- Explain fiscal policy, the fiscal deficit and government borrowing.
- Describe the phases of the economic cycle and how recessions are identified.
Lessons in order
Module test
10 questions, chosen at random from a bank of 31 questions and balanced across this module's learning goals and difficulty levels. Every question comes with an explanation. You need 80% to pass, and you can retake it as often as you like with a fresh set of questions.
This module builds on
- Measuring inflation in India: Real GDP growth removes the inflation explained there.
- Interest rates: Government borrowing affects the interest rates explained there.
- RBI monetary policy: Monetary policy is one of the main forces that shapes the cycle.