Ap Macro unit 2

GDP Expenditure approach

GDP = C+ I + G + (X-M)

GDP income approach

GDP = rent+ wages + interest + profits

GDP value added approach

GDP = value of sales - cost of intermediate goods

Labor Force

number of employed + number of unemployed

Unemployment Rate

Unemployed/total labor force x 100

Labor Force Participation Rate

Total labor force/total adult population x 100

Natural Rate of Unemployment

Frictional unemployment + structural unemployment

CPA

Price of market basket in selected yr/base yr x 100

Inflation Rate

(New yr - old yr)/old yr x 100

Nominal GDP

Price of current yr x Quantity of current yr OR real GDP x (GDP deflator/100)

Real GDP

Price of base yr x Quantity of current yr OR nominal GDP/GDP deflator x 100

GDP deflator

Nominal gdp/real gdp x 100