ap macroeconomics equations

input opportunity cost equation

a= a/b, it over

output opportunity cost equation

a= b/a, other over

gdp formula

consumption + gross investment + government purchases + net exports

net exports formula

exports - imports (NX = X - M)

gdp per capita formula

gdp/ population

unemployment rate equation

unemployed/ labor force x 100

labor force equation

unemployed + employed

labor force participation rate equation

labor force/ working age civilian population x 100

natural rate of unemployment equation

frictional + structural unemployment

how to calculate nominal gdp

value of current year’s goods using current year’s prices

how to calculate real gdp

value of current year’s goods using base year’s prices

gdp deflator equation

nominal/ real x 100

nominal to real gdp equation

nominal/ deflator x 100

cpi formula

current year value/ base year value x 100

calculating inflation with 2 cpi’s or 2 gdp deflators

new - old/ old x 100

spending multiplier equation

1/ mps or 1/ 1-mpc

tax multiplier equation

-mpc/ mps or -mpc/ 1-mpc

fisher formula

nominal interest rate= real interest rate + inflation rate

actual inflation rate, fisher formula

real interest rate = nominal interest rate - inflation rate

excess reserve formula

total reserves- required excess money the bank can loan out

money multiplier equation

1/reserve requirement

common money multipliers

1/10= 10, 1/20=5, 1/25=4, 1/33 1/3=3, 1/50=2

equations for new money, loans, and deposits

money multiplier x excess reserves

monetary equation of exchange

money supply x velocity of money = price level x real gdp

what do mv=py equal

nominal gdp