Formulae

Question 1

Unemployment rate

Answer 1

= (number of unemployed / total labour force) / 100

Question 2

Natural rate of employment formula =

Answer 2

= Structural unemployment + frictional unemployment + seasonal unemployment

Question 3

MPC =

Answer 3

= change in C / change in Y

Question 4

MPL =

Answer 4

1 - MPC

Question 5

k = (keynesian multiplier)

Answer 5

1/MPL = 1/(1-MPC)

Question 6

Money multipler

Answer 6

1 / reserve requirement

Question 7

GNI =

Answer 7

GDP + net income from abroad

Question 8

Real GDP =

Answer 8

nominal GDP / price index

Question 9

Real interest =

Answer 9

Nominal - inflation

Question 10

Net exports =

Answer 10

Exports - imports

Question 11

GDP =

Answer 11

C+I+G+(X-M)

Question 12

Revenue =

Answer 12

PQ

Question 13

Price elasticity of demand=

Answer 13

% change in Qd / % change in price = ((Q1-Q0)/Q0) / ((P1-P0)/P0)

Question 14

Weighted price index =

Answer 14

= ((new cpi - old cpi) / old cpi ) x 100

Question 15

Weighted price index formula =

Answer 15

= (average price of good a x weighted as a decimal) + same for all other goods

Question 16

Measuring economic growth

Answer 16

(Real GDP Year 2 - Real GDP Year 1) / (Real GDP Year 1) x 100

Question 17

Gini coefficient

Answer 17

area a/ area a+b

Question 18

Average tax rate =

Answer 18

(total tax paid)/(total income)

Question 19

Marginal rate of tax =

Answer 19

(change in tax) / (change in income)

Question 20

Economic Barriers to Growth

Answer 20

• High income inequality (low savings/investment)
• Lack of access to infrastructure (roads, airports, electricity)
• Lack of technology
• Lack of education
• Lack of healthcare
• Dependence on primary products for exports
• Lack of access to international markets
• Informal economy
• Capital flight
• Indebtedness
• Geographical factors

Question 21

Health measures of economic development

Answer 21

Life expectancy at birth
Infant mortality rate

Question 22

Education measures of economic development

Answer 22

Expected years of school
Mean years of schooling (average for 25 and older)

Question 23

Other indicators of economic development

Answer 23

Energy - ability to keep home at adequate temp
Environmental

Question 24

Human development index factors

Answer 24

Life expectancy at birth
Average years of schooling
GNI per capita

Question 25

Other indices - gender inequality index

Answer 25

- Reproductive health - measured by the maternal mortality rate and adolescent birth rates. - Empowerment - proportion of parliament seats that are occupied by females - Economic status - measured by the proportion of males to females that are participating in the labour market.

Question 26

Poverty cycle memonic

Answer 26

What stupid idiot grows Eh hate cuty people