Economics for Business Formula Sheet PDF

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Macro Formula Sheet...

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KEY FORMULAS FOR MACROECONOMICS CH. 9 MEASURES OF ECONOMIC ACTIVITY q GDP (Income) = GDP (Expenditure) q GDP (Expenditure) = C + I + G + (X – M) q Net Investment = Gross Investment – Depreciation q PDI = PI – T q Per Capita GDP = GDP / Population q Per Capita Real GDP = Real GDP / Population CH. 10 INFLATION & UNEMPLOYMENT q Real Income = Nominal Income / CPI q Real GDP = Nominal GDP / GDP Deflator q Real Interest Rate = Nominal Interest Rate – Inflation Rate q Participation Rate = Labour Force / Labour Force Population x 100% q Unemployment Rate = Unemployed / Labour Force x 100% q Okun’s Law: GDP Gap = (Unemploy. Rate – Natural Unemploy. Rate) x 2.5% CH. 11 ECONOMIC FLUCTUATIONS q Real Value Of Financial Assets = Nominal Value / Price Level q AD = C + I + G + (X – M) q Labour Productivity = Real Output / Total Hours Worked q AD = AS (Equilibrium) q I + G + X > S + T + M (Expanding) q I + G + X < S + T + M (Contracting) q I + G + X = S + T + M (Stationary) CH. 12 FISCAL POLICY q MPC = Consumption Domestically / Income q MPW = Withdrawals / Income q MPC + MPW = 1 q Spending Multiplier = Output / Spending or 1 / MPW q Budget Surplus \ Deficit = Gov’t Revenues – Gov’t Expendtures CH. 13 MONEY q R.R. = Desired Reserves / Deposits q Excess Reserves = Cash Reserves – Desired Reserves q Money Multiplier = 1 / R.R. q MS = Excess Reserves x M.M. CH. 14: MONETARY POLICY (not needed for exam) q V = Nominal GDP / M q M x V* = P x Q* (*fixed) q ∆ M = M2 – M1 / M1 x 100% q ∆ P = P2 – P1 / P1 x 100% q %∆M=%∆P...