KEY FORMULAS + GRAPHS

Question 1

Expenditure Approach

Answer 1

C+Ig+G+Xn

Question 2

Unemployment Rate

Answer 2

(#unemployment/labor force) x 100

Question 3

Labor Force Participation Rate

Answer 3

(Labor Force/Population) x 100

Question 4

GDP Deflator

Answer 4

(Nominal GDP/Real GDP) x 100

Question 5

Real Wage/Real Interest Rate

Answer 5

r%= i%- π%

Question 6

Nominal Interest Rate Formula/Fisher Effect

Answer 6

i%= r%+π%

Question 7

Nominal GDP

Answer 7

(Real GDPxGDP Deflator) x 100

Question 8

Quantity Theory of Money

Answer 8

MV=PQ

Question 9

Spending Multiplier

Answer 9

1/mps or 1/1-mpc

Question 10

Tax Multiplier

Answer 10

MPC/MPS (only NEGATIVE when taxes INCREASE)

Question 11

Money Multiplier

Answer 11

1/rr

Question 12

Real GDP per Capita

Answer 12

RGDP/Population

Question 13

4 reasons for Economic Growth

Answer 13

-Increase human/physical capital
-Increase Technology
-Increase Productivity
-Increase in quality and quantity of resources

Question 14

4 reasons ID shifts

Answer 14

-Cost Production
-Business Taxes
-Technology
-Expectation
-Stock of Capital

Question 15

Reasons MD Shifts

Answer 15

-Price
-RGDP
-Institutions
-Technology

Question 16

Demand of Loneable Funds Shifts

Answer 16

-Perceived Business Opportunity
-Government Borrowing

Question 17

Supply of Loanable Funds Shifts

Answer 17

-Buying Bonds
-Selling Bonds

Question 18

4 reasons for Foreign Exchange Shifts

Answer 18

-Price Levels
-Taste and Preference
-Interest Rates
-Relative Income

Question 19

Shifts in AD

Answer 19

-Consumption
-Investment
-Government Spending
-Net Exports

Question 20

Shifts in AS

Answer 20

-Input Cost
-Corporate Taxes
-Productivity
-Legal Environmental
-Inflationary Expectations

Question 21

What is the relationship b/w an appreciate currency and impact on exports and imports?

Answer 21

Exports: Decrease
Imports: Increase