Economics Equations (Unit 2)

Price Index

Price Index

(current year cost/base year cost) x 100

Unemployment Rate

(unemployed/labor force) x 100

labor force

unemployed + employed

inflation

((new-old)/old) x 100

Real to Nominal

Real x (Deflator/100)

Nominal to Real

(Nominal/deflator) x 100

GDP deflator

(Nominal/real) x 100

Labor Force Participation Rate

(labor force/working age population) x 100

Natural Rate of Unemployment

Frictional + Structural

Nominal GDP

current year’s goods x current year’s prices

Real GDP

BASE year's PRICES x CURRENT year’s GOODS