equations

Question 1

what is the formula to measure nominal GDP?

Answer 1

current prices X current quantity

Question 2

what is the formula to measure real GDP?

Answer 2

constant prices X current quantity

Question 3

what is the formula for the GDP deflator?

Answer 3

nominal GDP divided real GDP X 100

Question 4

what is the formula for GDP inflator?

Answer 4

(GDP year 2 deflator - GDP year 1 deflator) divided by GDP year 1 deflator

Question 5

what is the formula to compute CPI?

Answer 5

CPI= (cost of the basket of goods and services in a current year divided by cost of the basket of goods and services in a base year) times 100

Question 6

what is the formula for inflation rate?

Answer 6

inflation rate yr2= (CPI yr2 - CPI yr1 divided by CPI yr1) times 100

Question 7

what is the equation for real interest rate (fisher equation)?

Answer 7

real intrest rate= interest rate - inflation

Question 7

what is the formula for GDP growth rate?

Answer 7

GDP yr2 growth rate= real GDP yr2 - real GDP yr1 divided by real GDP yr1

Question 8

what is the formula for GDP per capita?

Answer 8

GDP per capita= current GDP divided by current population

Question 9

what is the GDP formula?

Answer 9

Y=C+I+G+NX

Question 10

how do you find the prices from 1957 in todays dollar amount?

Answer 10

1957 amount X (current CPI divided by 1957 CPI)

Question 11

what is pull-inflation?

Answer 11

when consumer demand exceeds supply of some good or service, this causes prices to go up

Question 12

what can cause pull-inflation?

Answer 12

higher amounts of disposable income

Question 13

what is push inflation?

Answer 13

when suppliers experience an increase in the price of production, making the consumers pay more due to their production price increase

Question 14

what are 3 causes of push inflation?

Answer 14

higher price of raw input materials
higher wages of workers
higher taxes