equations Flashcards
(18 cards)
private saving
= Y - T - C
public saving
= T - G
national saving
= private + public = Y - C - G
GDP (closed economy)
Y = C + I + G
GDP (open economy)
Y = C + I + G + (EX - IM)
Investment (same as national saving)
I = Y - C - G
Budget surplus
= T - G
Budget deficit
= G - T
Total LF Supply (same as national saving)
= Y - C - G
Net exports (NX)
Exports - Imports
GDP Deflator
= (Nominal GDP / Real GDP) x 100
CPI
(cost of basket in current year/cost in base year) x 100
Inflation rate (of CPI)
(CPI this year - CPI last/older year / CPI last/older year) x 100
future value
present value * (1 + r) ˆn
nominal interest rate
(new IR - old IR) / old IR x100
real IR
nominal IR - CPI Inflation Rate
production function
Y = AF(L, K, H, N)
constant returns to scale check
Equations can be checked through multiplying all inputs by the same positive number
E.g. 2Y = AF(2L, 2K, 2H, 2N)
