Midterm Equations Flashcards
(24 cards)
opportunity cost =
given up/getting
GDP (expenditure approach) =
C + I + G + Nx
NPI =
GPI - depreciation
NDP =
C + NPI + G + Nx
What is GDP?
The value of all the goods and services produced in our economy within our borders
What is NPI?
What businesses spend on final goods and services, and money used to replace old capital (depreciation)
Where does depreciation exist?
In the āIā of the GDP equation
Net Exports (Nx) =
Exports - Imports
Growth Rate =
New GDP - Old GDP / Old GDP ALL TIMES 100
GDP Deflator =
Nominal GDP / Real GDP ALL TIMES 100
Inflation Rate =
New CPI - Old CPI / Old CPI ALL TIMES 100
Real GDP (chain-weighted) =
Use Year X production and multiply by Year Y prices, Use Year Y production and multiply by Year X prices, then take the average
Nominal GDP (includes inflation) =
Year X production multiplied by Year X prices (these values added to each other accordingly)
National Income (NNP) =
Wages + Rent + Interest + Profit
GNP =
NNP + Depreciation
What is personal income?
Money that flows into household
What is national income?
Money that is earned by citizens
How do you get from GDP to GNP?
To GDP = subtract production of americans out of the country, add production of non-americans working in the US
To GNP = add production of americans out of the country, subtract production of non-americas working in the US
CPI =
(value of market basket in current dollars) / (value of market basket in base year dollars) ALL TIMES 100
Employment to Population Ratio =
employed / civilian working age population ALL TIMES 100
Unemployment Rate =
employed / labor force ALL TIMES 100
Labor Force =
employed + unemployed
Underemployment Rate (more inclusive) =
(unemployed + discouraged + involuntary part-time) / labor force + discouraged ALL TIMES 100
Labor Force Participation Rate =
(labor force) / (civilian working age population) ALL TIMES 100
