FPI

This one is not written up yet

The definition above is the short version. A full explanation — how it works, a worked example and the exam traps — is still being written. In the meantime the chapter below covers it in context.

Written up from the same chapter

• Demand-pull inflationInflation caused by demand running ahead of the supply available to meet it — too much money chasing too few goods.
• Gross Domestic ProductThe market value of all final goods and services produced inside a country's borders in a period, whoever owns the producer — the standard measure of the size and growth of an economy.
• Gross National ProductThe market value of goods and services produced by a country's residents wherever in the world they are — GDP measured by nationality rather than by geography.
• InflationA sustained general rise in the price level, which erodes what a rupee buys — and the reason a nominal return has to be deflated before it means anything.
• Monetary policyThe central bank's management of money supply and interest rates to promote growth and hold prices stable — expansionary when it wants to push the economy up, contractionary when it wants to cool it.
• Net Factor Income from AbroadFactor income earned by a country's residents abroad minus factor income earned inside the country by non-residents — the single adjustment that converts GDP into GNP.