Introduction to Market Economy and Gross Domestic Product (GDP)

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What does the Gross Domestic Product (GDP) measure?

The volume of all goods and services produced within an economy during a given period of time

How can India's GDP be compared with that of other countries?

Through the market exchange rate or Purchasing Power Parity (PPP)

What is the main cause of inflation?

Demand-pull pressure

How is Real GDP different from Nominal GDP?

Real GDP is the market value of goods and services produced in an economy, unadjusted for inflation

What does inflation targeting aim to achieve?

Stabilizing prices to achieve long-term economic growth

This quiz covers the structure of a market economy, including the various agents involved such as households, firms, government, financial markets, and the rest of the world. It also explores the concept of Gross Domestic Product (GDP) as a measure of the volume of goods and services produced within an economy.

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