MACRO Exam 2 Formulas

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Last updated 2:17 AM on 10/14/26
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23 Terms

1
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CPI Formula

CPI = 100 x (cost of basket during current year / cost of basket during base year)

2
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Inflation Rate Formula

Inflation Rate = (CPI this year - CPI last year) / CPI last year x 100

3
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Real Interest Rate Formula

Real Interest Rate = (nominal interest rate) - (inflation rate)

4
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Y stands for…

Real GDP = Quantity of output produced

5
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L stands for…

Quantity of labor

6
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K stands for…

Physical capital

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H stands for…

Human capital

8
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Productivity =

Y / L (output per worker)

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Capital per worker =

K / L

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Average worker’s human capital =

H / L

11
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T stands for…

Net taxes we pay

12
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C stands for…

Consumption

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G stands for…

Government spending

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Dividend yield =

Dividend / share price

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PE Ratio =

share price / (earnings / share)

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Earnings per share (e / s) =

dividend + retained earnings

17
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Private saving =

Y - T - C

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Public Saving =

T - G

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Budget Surplus =

T - G = public saving

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Budget Deficit =

G - T = -(public saving)

21
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National Saving =

Y - C - G (private saving + public saving)

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Y =

C + I + G + NX

23
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I (Investment) =

Y - C - G = National Saving