Macroeconomic Equations

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Last updated 5:42 AM on 5/14/26
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13 Terms

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Output

Output = productivity x Average Hours x Labor force participation rate x population

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Disposable Income (Yd)

Disposable Income = Income - taxes + transfer payments

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Consumption function

Consumption (C) = Autonomous consumption (C0) + MPC (b) x Disposable income (Yd)

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Total Spending

Total Spending = Consumption + Investment + Government Purchases + (Exports - Imports)

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MPC

MPC = b = slope = change in C over change in Yd

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Budget Deficit

G + Tr > T

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Budget Surplus

T > G + Tr

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Required Reserve

RR = RRR x DD

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Excess Reserves

ER = TR - RR

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