Chapters 19-22 Formulas
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GDP, GDP Price Index, Real GDP, GDP at End Date, Rule of 70, Labor force participation rate, unemployment rate, GDP gap, Consumer Price Index, Inflation, Percentage change in real income, and Real Interest Rate
Last updated 9:36 PM on 2/23/23
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12 Terms
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How to find GDP
GDP = Consumption + Investment + Government spending + (exports-imports)
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GDP Price Index
GDP Price Index = Price of market basket in specific year/price of market basket in base year \* 100
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Real GDP
Real GDP = Nominal GDP/GDP Price Index *100 or Units of output* base year’s price
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GDP at end date
GDP at end date = GDP at starting date \* (1+ GDP growth rate)^year
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Rule of 70
Years required to double GDP = 70/annual percentage of growth
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Labor force participation rate
Labor force participation rate = labor force/total adult population \* 100
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Unemployment rate
Unemployment/labor force \* 100
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GDP gap
GDP gap = Real GDP - Potential GDP
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Consumer price index
Consumer price index = Price of market basket in specific year/price of market basket in base year \* 100
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Inflation
Inflation = cost in new year - cost in previous year / cost in previous year \* 100
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Percentage change in real income
Percentage change in real income = percentage change in nominal income - inflation rate
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Real interest rate
Real interest rate = nominal interest rate - inflation rate
Note 
Flashcards (31)