Macroeconomics Unit 2 Formulas

Wage Rate

Real Wage Rate = (Nominal Wage Rate / CPI) x 100

(c = n/r, can not read)

GDP

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

(d = n/r, do not read)

CPI

CPI = (Value of market basket at current prices / Value of market basket at base prices) x 100

inflation rate

Inflation Rate = ((CPI current - CPI previous) / (CPI Previous)) x 100

interest rate

Real Interest Rate = Nominal Interest Rate - Inflation Rate

Velocity

Y x P = M x V

Y = Production output

P = Price

M = Money Numeric Amount

V = Velocity

(Your Problems = Moreno Valley

or Y = MV / P, your movies are over at patrick's)

Labor Force Participation Rate

(Labor Force / Working Age) x 100

Unemployment Rate

(Unemployed / Labor Force) x 100

Employment Rate

(Employed / Labor Force) x 100

GDP Expenditure Approach

Y = C + I + G + Nx

Y = Income

C = Consumption Expenditure

I = Investment

G = Government Expenditure

Nx = Exports - Imports

(cigarettes, next)

GDP Income Approach

Y = W + I + R + P

Y = Income

W = Wages

I = Interest

R = Rent

P = Profit