AP Macro Equations

Output per unit opportunity cost

units lost / units gained

Input per unit opportunity cost

units gained / units lost

Expenditures Approach Formula

GDP = Consumer + Investment + Government + Net exports

Income Approach Formula

National Income = Wages + Rent + Interest + Profit

Net Exports Equation

Exports - Imports

% change in GDP

year 2 - year 1 / year 1 x 100

Consumer Price Index Formula

Value of basket in a given year / Value of the basket in the base year x 100

GDP Deflator Formula

Nomial GDP / Real GDP x 100

GDP per capita

GDP / population

MPC Formula

change in consumption/change in disposable income

MPS Formula

change in saving/change in disposable income

Spending Multiplier

1/MPS

Tax Multiplier

Spending multiplier - 1

Money Multiplier Equation

1/reserve ratio

Quantity Theory Of Money

Money Supply x Velocity = Price x Quantity of Output