AP MACRO UNIT 4 FORMULAS
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5 Terms
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Money Multiplier
\frac{1}{\text{Required Reserve Ratio}}
2
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Change in Money Supply
\text{Money Multiplier} \times \text{Initial Deposit}
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Required Reserves
\text{Required Reserve Ratio} \times \text{Deposits}
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Fisher Equation
i = r + \pi
Where:
i = Nominal interest rate
r = Real interest rate
\pi = Inflation rate
5
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Actual Money Multiplier
Money Supply/ Monetary Base
Note 
Flashcards (36)