| Inflation |
Prices go up over time. |
Like a balloon that keeps inflating. |
If a loaf of bread costs ₹20 now and ₹22 next month. |
| Deflation |
Prices go down over time. |
Like a balloon that slowly deflates. |
Rice price falls from ₹50 to ₹48 in a month. |
| Gross Domestic Product (GDP) |
Total value of all goods & services made in the country. |
Total sales of all shops in a town. |
If all farmers in Nagaland sell crops worth ₹10 crores in 2024. |
| Gross National Product (GNP) |
GDP + income earned by citizens abroad – income earned abroad by foreigners domestically. |
Money you earn from a job at home + money you earn when working in another city. |
A Nagaland teacher earns ₹50,000 at home + ₹20,000 from a teaching job in Delhi. |
| Consumer Price Index (CPI) |
A measure of how much everyday goods cost. |
A grocery list that shows how prices change each month. |
CPI shows 5% rise in food prices this year. |
| Producer Price Index (PPI) |
How much producers (farmers, manufacturers) get paid. |
Price tag on a raw material before it reaches the shop. |
Wheat price at the mill rises 7% compared to last year. |
| Interest Rate |
Cost of borrowing money. |
The extra charge on a loan. |
Bank charges 7% interest on ₹1,00,000 loan. |
| Fiscal Policy |
Government’s use of taxes & spending. |
How a family decides to cut or add expenses. |
Government increases tax to pay for new roads. |
| Monetary Policy |
Central bank’s control of money supply & interest rates. |
Adjusting the water pressure in a garden. |
RBI cuts rates to make borrowing cheaper. |
| Budget |
Plan of income vs. expenditure. |
A household budget sheet. |
State budget: ₹1 lakh revenue, ₹1.2 lakh expenses. |
| Tax |
Money paid to government. |
Paying a toll to use a road. |
Income tax of 10% on ₹5,00,000 salary. |
| Subsidy |
Government support to reduce cost. |
A free refill at a water station. |
Government gives ₹50 per kg wheat to farmers. |
| Export |
Goods sold to other countries. |
Selling your handmade crafts overseas. |
Nagaland tea exported to Japan. |
| Import |
Goods bought from other countries. |
Buying clothes from abroad. |
Importing machinery from China. |
| Trade Balance |
Difference between exports and imports. |
Balance of your shop’s sales vs. purchases. |
Exports ₹100 crores, imports ₹80 crores → +₹20 crores. |
| Currency |
Money used in a country. |
The local coins and notes. |
Indian rupee (₹). |
| Credit |
Borrowing money that is paid back later. |
Borrowing a book from a library. |
Taking a loan to buy a tractor. |
| Debt |
Money owed to someone. |
Borrowing money from a friend. |
Village bank owes ₹10,000 to the state. |
| Savings |
Money kept aside for future. |
A piggy bank for emergencies. |
Saving ₹5,000 each month for 2 years. |
| Investment |
Putting money into something that may grow. |
Buying a seed that becomes a tree. |
Planting a sapling that will produce fruit in 5 years. |
| Growth Rate |
How fast something increases. |
Speed of a sprinter. |
GDP grew 7% last year. |
| Demand |
How much people want something. |
A crowd waiting for a new mobile. |
High demand for rice during festivals. |
| Supply |
How much something is available. |
Stock of new phones in a shop. |
Low supply of wheat due to drought. |
| Market Price |
Price at which buyers and sellers agree. |
The price decided at a bazaar. |
Price of a mango settled at ₹10 each. |
| Monopoly |
One seller controls the market. |
A single shop sells all oranges in a town. |
Only one sugar mill in the district. |
| Competition |
Many sellers offering the same thing. |
Multiple shops selling tea. |
Rival tea vendors in the market. |
| Wage |
Money paid for work. |
Salary for a day’s labor. |
Daily wage of ₹200 for a farmhand. |
| Capital |
Money or assets used to make more money. |
Seeds used to grow crops. |
₹1 lakh invested in a farm tractor. |