Macro equations

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Macroeconomics

AP Macroeconomics

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13 Terms

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calculating rGDP

(Nominal GDP / GDP deflator) x 100

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CPI =

(Current year values / base year values) x 100

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Inflation using CPI

(New CPI - old CPI) / old CPI x 100

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MPC

Spending / income

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MPS

Savings / income

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Monetarist equation of exchange

MV = PQ

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Spending multiplier

1 / MPS

1/ (1-MPC)

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Tax multiplier

-(MPC / MPS)

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Transfer

MPC/MPS

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Market basket

Sum of (price x quantity) of good

When calculating current year, only take prices because quantity is constant

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Real GDP

Nominal GDP / GDP deflator

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Real GDP per capita

GDP / population