S E C T I O N S

GDP refers to the sum total of the value of goods and  services produced within the boundary of an economy in the course of one  year.

GNP refers to the sum total of the value of goods and  services produced within the boundary of an economy in the course of one year.  The GNP includes that part of the product which goes back to foreigners in the  form of profits, interest and dividends, and at the same time includes property  incomes which the residents may receive from abroad. Property incomes are  returns on investments abroad. 

National Income or National Product is a term we use to  describe the total of all the wealth produced, consumed and distributed in an  economy over a specific period of time usually one year.

Gross Fixed Capital Formation this is expenditure on  fixed assets (building, machinery, vehicle, etc) for either replacing or adding  to the stock of existing fixed assets. This is the major part of the  investment, which takes place in the economy.

Consumer Price Inflation refers to a situation of  persistent and sustained rise in the general level of prices in an economy  causing the purchasing power of consumers to fall.

Money Concept M₂

Most country of  the world have two measures of the money stock broad money supply and narrow  money supply. Narrow money consists of all the purchasing power that is  immediately available for spending.  In Mauritius two narrow measures are  currently published, M₀ consists of notes and coins in circulation  and the commercial deposits of cash at the bank of Mauritius. 

The other  measure M₂ consists of notes and coins in circulation and the NID ( non interest bearing) bank deposits principally current accounts. Also in the  M₂ definition are the other interest bearing retail deposits of banks  and the retail deposits of building societies.  Retail deposits are the deposits  of the private sector which can be withdrawn easily.

The Balance of Trade refers to the difference between the  value of visible exports and visible imports. 

Budget deficit arises when government expenditure exceeds  the revenues.

Indirect Taxation refers to tax imposed on goods and  services in an economy.