Macroeconomics Midterm

Expenditure approach

Y = C + I + G + NX

Income approach

Y = Wages + Rent + Interest + Profit (+ taxes - subsidies)

Value added approach

Y = Value Added at each stage of production

Nominal GDP

The sum of current prices x current quantities.

Real GDP

The sum of base year prices x current quantities.

Population

Labor force + not in labor force

Labor force

Employed + unemployed

Labor force participation rate

Labor force / working-age population

Unemployment rate

Unemployed / labor force

Employment population ratio

employed / working age population

Unemployed

Jobless, available to work, actively searching for a job in the last 4 weeks.

Natural rate of unemployment

Frictional + Structural

CPI

(Cost of base year basket at year t prices) / (Cost of base-year basket at base-year prices) x 100

GDP deflator

Nominal GDP / Real GDP x 100

Inflation rate between to periods

(Pt - P(t-1)) / (P(t-1)) x 100

Nominal interest rate

(1+i) = (1+r)(1+pi)

Solow growth

y = Ak*

Present value

FV / (1+r)^n

QoQ growth rate

g = (Yt - Y(t-1)) / (Y(t-1)) x 100

Annualized

g = [(Yt / Y(t-1)) ^4 × 100]