Econ Unit 2

Labor Force

Employed + Unemployed

Labor Force Participation Rate

(Labor Force / Eligible Population) × 100

Natural Rate of Unemployment

Frictional Unemployment + Structural Unemployment

Actual Rate of Unemployment

(Frictional Unemployment + Structural Unemployment) + Cyclical Unemployment

Consumer Price Index

(Cost of Basket in Current Year / Cost of Basket in Base Year) × 100

Inflation Rate

( (New Consumer Price Index - Old Consumer Price Index) / Old Consumer Price Index) × 100

Real Interest Rate

Nominal Interest Rate - Inflation Rate

Nominal GDP (using real gdp and index)

(Real GDP × Price Index)/100

Real GDP (using nominal and price index)

(Nominal GDP / Price index )*100

GDP Expenditure Approach

Consumer goods + Investments + Government Spending + (Exports - Imports)

Nominal GDP

Current Year Price × Current Year Quantity

Nominal GDP (using real gdp and deflator)

Real GDP × GDP Deflator

Real GDP

Base Year Price × Current Year Quantity

Real GDP (using nominal and deflator)

Nominal GDP / GDP Deflator

Real GDP Per Capita

Real GDP / Total Population

GDP Deflator

(Nominal GDP / Real GDP) ×100

Unemployment Rate

(Number of Unemployed / Labor Force) × 100

Labor Force/ Eligible Working Population

Anyone above 16 years old, must be able and willing to work, not institutionalized (jails, hospitals, etc.) not in the military, not in school full time, and not retired.