AP Macroeconomics Formula Flashcards

A set of vocabulary flashcards covering essential AP Macroeconomics formulas and equations for nominal GDP, unemployment, inflation, and multipliers.

Nominal GDP

$$C+I+G+(X-M)$$

Unemployment Rate

$$\frac{\text{unemployed}}{\text{labor force}} \times 100$$

Labor Force Participation Rate

$$\frac{\text{labor force}}{\text{working age, noninstitutionalized population}} \times 100$$

Natural Rate of Unemployment

$$\text{frictional} + \text{structural}$$

CPI

$$\frac{\text{MBGY}}{\text{MBBY}} \times 100$$

Inflation Rate

$$\frac{Y2 - Y1}{Y1} \times 100$$

GDP Deflator

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

Aggregate Demand

$$C+I+G+(X-M)$$

Market Basket Given Year

$$\text{Current year prices} \times \text{base year quantities}$$

GDP (Real)

$$\text{Base year prices} \times \text{current year quantities}$$

Marginal Propensity to Consume (MPC)

$$\frac{\text{Change in consumption}}{\text{change in disposable income}}$$

Marginal Propensity to Save (MPS)

$$\frac{\text{Change in savings}}{\text{change in disposable income}}$$

Spending Multiplier

$\frac{1}{\text{MPS}}$ or $\frac{1}{1-\text{MPC}}$

Tax Multiplier

$$\frac{\text{MPC}}{\text{MPS}}$$

Money Multiplier

$$\frac{1}{\text{rrr}}$$

Quantity Theory of Money

$$M(V)=P(Y)$$