AP Econ Formulas

Unemployment Rate

(# of unemployed in labor force / # of ppl in labor force) *100

Labor Force Participation Rate

(# of ppl in labor force / total population) *100

Consumer Price Index (CPI)

(Market basket in Comparative Year / Market basket in Base Year [always 100]) *100

Inflation Rate

[( New - Old )/ Old] *100

GDP Deflator

(Nominal GDP / Real GDP) *100

Interest rates

Real = Nominal - Inflation Rate (r = i - π)

Aggregate Demand (Also GDP)

C + Ig + G + Xn

Net Exports (Xn)

Exports - Imports

Marginal Propensity of Consumption (MPC)

Change in Consumption / Change in Disposable Income

1 - MPS

Marginal Propensity of Savings (MPS)

Change in Savings / Change in Disposable Income

1 - MPC

Spending Multiplier

1 / MPS

1 / 1 - MPC

Tax Multiplier

-MPC / MPS

-MPC / (1 - MPC)

Money Multiplier

1 / RRR (Required Reserve Ratio)

Quantity Theory of Money

MV = PY