Macro exam 1 formulas GDP

GDP

Consumption + Investment + Government Spending + Net Exports

GDP deflator

(Nominal GDP / Real GDP) x 100

Calculating inflation rate with GDP deflator

(GDP deflator in year 2 - GDP deflator in year 1) / (GDP deflator in year 1) x 100

Calculating economic growth

(Real GDP year 2 - Real GDP year 1) / (Real GDP year 1) x 100

Calculating inflation rate with CPI

 CPI in year 2 - CPI in year 1 / CPI in year 1 x 100

CPI (Consumer price index)

Price of the basket of goods and services in the current year / price of the basket in the base year x 100

Formula for turning dollar figures for Year X into todays dollars

(Amount in year X dollars x Price level today) / Price level in year X

Real interest rate

Nominal Interest rate - Inflation rate

Labor force

Number of Employed + Number of Unemployed

Unemployment rate

(Number of unemployed / Labor force) x 100

Labor Force participation rate

(Labor force / Total number of adults) x 100

U-6 Rate of unemployment

(Unemployed + MAW / Labor Force + MAW) x 100

Nominal GDP

Price x Quantity

Real GDP

 Price base year x quantity year 2