MACRO EXAM 1 FORMULAS

GDP per capita

GDP/popualation

growth rate of GDP

(GDP1-GDP1-t/GDpt01)100

(New-Old/Old)100

GDP national spending (expenditure)

Y=C+I+G+NX
y=gdp, output, input, etc

c=consumption

I=investment,

g= government expenditures

NX=net exports

factor income approach 

Y= wages + rent + interest + profits

wages and compensation

labor income

rent, interest, and profits

capital income

nominal interest rate

real interest rate+ inflation

labor force

Employed+ unemployed 

unemployment rate 

(number of unemployment/ number of people in the labor force) x 100

labor force partiicpation rate

(Unemployment +employment /adult population) x 100

(labor force/adult population) x 100 

okun law

for every 1% point increase in the unemployment rate, real GDP falls 2%

inflation rate 

pi t

(P1-Pt-1/Pt-1) x 100

Pt= price index value in the year t

GDP deflator 

(nominal GDP/real GDP) x 100 

real price 

(CPIx/CPIy) x price in y dollars

x and y denote different years 

quantity therory of money 

Mv=PYr

M= money supply]

V= velocity of money 

P= price rates

Yr=real GDP 

quantity theory of money in growth rate 

M+V=P + Yr

M=growth rate of money supply

v= percent change in the velocity of money

p= percent change in price (inflation)

Yr= growth rate of realo GDP

real rate of return

Real= i - pi

where i is the nominal interest rate and pi is the inflation rate.