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1

Per-Unit Opportunity Cost

Opportunity Cost/ Unit Gained

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2

GDP (Expenditure Approach)

C + G + I + (E-I)

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3

GDP (Income Approach)

Wages + Rent + Interest + Profit

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4

GDP Growth Rate Formula

[(Year 2 GDP - Year 1 GDP) / Year 1 GDP] × 100

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5

GDP Deflator

(Nominal GDP/Real GDP) x 100

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6

or GDP Deflator

(Price of selected goods in current year/Price of selected goods in base year) x 100

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7

Real GDP

(Nominal GDP/GDP Deflator) x 100

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8

Output Growth

[(Year 2 GDP - Year 1 GDP) / Year 1 GDP] × 100

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9

CPI

(Cost of market basket/Cost of market basket in base year) x 100

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10

Inflation Rate (using CPI)

[(Year 2 CPI - Year 1 CPI)/Year 1 CPI] x 100

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11

Inflation Rate (using GDP Deflator)

[(Year 2 GDP Deflator - Year 1 GDP Deflator)/Year 1 GDP Deflator] x 100

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12

Labor Force

Employed + Unemployed

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13

Labor Force Participation Rate

(Labor Force/Working Age Pop.) x 100

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14

Unemployment Rate

(Num of Unemployed/Num in Labor force) x 100

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15

Real GDP Growth Rate (also works for interest rate and income growth rate)

Nominal GDP Growth Rate - Inflation Rate

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16

Nominal GDP Growth Rate (also works for interest rate and income growth rate)

Real GDP Growth Rate + Inflation Rate

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17

MPC

Change in spending / Change in disposable income

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18

MPS

Change in Saving/Change in disposable income

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19

MPS + MPC =

1

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20

Spending Multiplier

1/MPS

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21

Tax Multiplier

-MPC/MPS

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22

Change in GDP (or AD or Income) (Spending Multiplier)

Change in Spending X Spending Multiplier

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23

Change in GDP (or Ad or Income) (Tax Multiplier)

Change in Taxes X Tax multiplier

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24

Money Multiplier

1/Reserve Requirement

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25

Change in the Money Supply

Change in Excess Reserves X Money Multiplier

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26

Real Interest Rate (Fisher Equation)

Nominal interest rate – Inflation rate

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27

Nominal Interest Rate (Fisher Equation)

Real interest rate + Inflation rate

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28

Quantity Theory of Money

MV = PY (Money Supply X Velocity of Money = Price level X Real Output)

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29

Another way to write Quantity Theory of Money

MV = Nominal GDP

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