Macroeconomic Formulas and Measures

Flashcards covering key macroeconomic formulas including GDP measurements, labor market metrics, inflation, price indexes, and interest rates.

Expenditure GDP

$$GDP = C + I + G + X_n$$

Income GDP

$$GDP = \text{Wages} + \text{Rent} + \text{Interest} + \text{Profit}$$

Real GDP per Capita

$$\text{Real GDP per Capita} = \frac{\text{Real GDP}}{\text{Total Population}}$$

Labor Force

$$\text{Labor Force} = \text{Employed} + \text{Unemployed}$$

Unemployment Rate

$$\text{Unemployment Rate} = \frac{\text{Unemployed}}{\text{Labor Force}} \times 100$$

Labor Force Participation Rate (LFPR)

$$\text{LFPR} = \frac{\text{Labor Force}}{\text{Adult Population}} \times 100$$

Natural Rate of Unemployment (NRU)

$$\text{NRU} = \text{Frictional} + \text{Structural}$$

Inflation Rate

$$\text{Inflation Rate} = \frac{\text{Price Level}_{\text{Year 2}} - \text{Price Level}_{\text{Year 1}}}{\text{Price Level}_{\text{Year 1}}} \times 100$$

Price Index (CPI)

$$\text{Price Index} = \frac{\text{Cost of Basket}_{\text{Current Year}}}{\text{Cost of Basket}_{\text{Base Year}}} \times 100$$

GDP Deflator

$$\text{GDP Deflator} = \frac{\text{Nominal GDP}}{\text{Real GDP}} \times 100$$

Real Wage / Income

$$\text{Real Value} = \frac{\text{Nominal Value}}{\text{Price Index (as a decimal)}}$$

Real Interest Rate

$$\text{Real Interest Rate} = \text{Nominal Interest Rate} - \text{Inflation Rate}$$