AP Macroeconomics Formula Sheet

Flashcards for AP Macroeconomics Formulas

GDP (Expenditure Approach)

GDP = C + I + G + (X - M)

GDP (Income Approach)

GDP = W + R + I + P

Nominal GDP

(P × Q) for all goods in current year

Real GDP

Nominal GDP / GDP Deflator × 100

GDP Deflator

(Nominal GDP / Real GDP) × 100

Unemployment Rate

(Unemployed / Labor Force) × 100

Labor Force Participation Rate (LFPR)

(Labor Force / Adult Population) × 100

Inflation Rate (CPI)

((CPI this year - CPI last year) / CPI last year) × 100

CPI

(Cost of Market Basket in Current Year / Cost in Base Year) × 100

Real Interest Rate

Nominal Interest Rate - Inflation Rate

Spending Multiplier

1 / (1 - MPC)

Tax Multiplier

-MPC / (1 - MPC)

Money Multiplier

1 / Reserve Requirement

Loanable Funds Supply

National Saving = Private Saving + Public Saving

Exchange Rate (Real)

(Nominal Exchange Rate × Domestic Price) / Foreign Price