AP Macro Graphs & Formulas

Production Possibilities Curve

Foreign Exchange Market (FOREX)

Money Market

Aggregate Supply & Aggregate Demand Curve (AD/AS)

Business Cycle

Circular Flow Diagram

Inflationary Gap

Recessionary Gap

SR Phillips Curve

LR Phillips Curve

GDP Expenditure Approach

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

GDP Income Approach

Y = W + I + R + P (wages + interest payments + rent + profits)

GDP deflator

GDP Deflator = (Nominal GDP/Real GDP) x 100

Real GDP formula

Real GDP = (Nominal GDP/GDP deflator) x 100

GDP per capita

GDP/population

Net Exports

NX = exports (X) - imports (M)

Money Multiplier

1/required reserve ratio

Tax Multiplier

-MPC/MPS

Marginal Propensity to Consume (MPC)

MPC = change in consumption / change in income

MPC and MPS relationship

MPC + MPS = 1

Equation of Exchange

MV=PY

M is the money supply

V is the velocity of money

P is the price level

Y is the output of goods and services produced in an economy

CPI (Consumer Price Index)

CPI = (current price/base price) X 100

Marginal Propensity to Save (MPS)

MPS = change in saving / change in income

AD/AS (demand) relationship to Phillips Curve

AD/AS (supply) relationship to Phillips Curve

Unemployment Rate

(# unemployed/# labor force) x 100

Comparative Advantage

OOO output other over

IOU input other under

Spending Multiplier

1/MPS or 1/1-MPC

Reserve Market (ample)