Macro Formulas

GDP formula (expenditure approach)

GDP = C + I + G + (X − M)

Nominal GDP formula

Nominal GDP = Σ (Current Price × Current Quantity)

Real GDP formula

Real GDP = Σ (Base Year Price × Current Quantity)

GDP Deflator formula

GDP Deflator = (Nominal GDP / Real GDP) × 100

CPI formula

CPI = (Cost of Basket This Year / Cost in Base Year) × 100

Inflation rate formula

Inflation Rate = ((CPInew − CPIold) / CPI_old) × 100

Unemployment rate formula

Unemployment Rate = (Unemployed / Labour Force) × 100

Labour force participation rate formula

LFPR = (Labour Force / Working-Age Population) × 100

Rule of 70 formula

Rule of 70 = 70 / Growth Rate (%)

Real GDP per capita formula

Real GDP per Capita = Real GDP / Population

Productivity from capital deepening

Productivity = Growth in Capital per Worker × 0.4

Productivity growth breakdown

Productivity Growth = Growth from Capital + Growth from Technology

Private saving formula

Private Saving = Y − T − C

Public saving formula

Public Saving = T − G

National saving formula

National Saving = Private Saving + Public Saving

Government budget balance formula

Budget Balance = T − G

Savings-investment identity (closed economy)

S = I

Savings-investment identity (open economy)

S = I + NFI

Net exports formula

NX = Exports − Imports

Present value formula

PV = FV / (1 + r)^t

Real interest rate formula

Real Interest Rate = Nominal Rate − Inflation

Nominal interest rate formula

Nominal Interest Rate = Real Rate + Inflation

Reserve ratio formula

Reserve Ratio = Reserves / Total Deposits × 100

Money multiplier formula

Money Multiplier = 1 / Reserve Ratio

Change in money supply formula

ΔMoney Supply = ΔReserves × Money Multiplier

Quantity theory of money

MV = PY

Gini coefficient definition

Gini = Area between Lorenz Curve and Equality Line / Total Triangle Area

Lorenz curve definition

A graph showing the cumulative share of income by cumulative share of population