Macroeconomics All Formulas

Labor Participation Rate

= (People in the labor force) / (Working age population) * 100

Unemployment Rate

= (# people unemployed) / (# people in labor force) * 100

% Change in GDP

= [ ((New GDP) - (Old GDP)) / (Old GDP) ] * 100

Consumer Price Index

= (Basket in given year) / (Basket in base year) * 100

GDP Deflator

= (Nominal GDP) / (Real GDP) * 100

Expenditure Approach

= C + I + G + (X-M)
C: Economic Consumption
I: Investment
G: Government Spending
(X-M): Net Exports

Income Approach

= Wages + Rent + Interest + Profit

MPS

= 1 - MPC

Spending Multiplier

= 1 / MPS = 1 / (1- MPC)

Tax Multiplier

= MPC / MPS = 1 / MPS - 1

Money Multiplier

= 1 / RR

Real Interest Rate

= (Nominal Rate) - (Expected Inflation)

Quantity Theory of Money

M × V = P × Y