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46 Cards in this Set
- Front
- Back
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Opportunity cost of A = |
loss of B / gain of A |
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Output = |
Y = C + I + G + NX |
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Consumption function = |
C = C + mpc (y-T) |
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CPI = |
cost of base year goods&services in the current year / cost of base year goods&services in base year |
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Okun's Law = |
(Y-Y*)/Y* = -2(u-u*) |
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economic surplus (net benefit) = |
benefit - cost |
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Nominal GDP = |
XPrices * XQuantities |
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Real GDP = |
XPrices * YQuantities |
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working age population = |
labour force + not in labour force |
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labour force = |
employed + unemployed |
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labour force participation = |
labour force / working age population |
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unemployment rate = |
unemployed/labour force |
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employment rate = |
employed/working age population |
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inflation = |
(Year 2 CPI - Year 1 CPI) / Year 1 CPI x 100 |
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real interest = |
nominal interest rate - inflation rate |
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real wage = |
nominal wage / CPI |
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output gap = |
(Y-Y*)/Y* x 100--> first half of Okun's Law |
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growth rate = |
(Y2-Y1)/Y1 x 100 |
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MPC = |
change in C / change in Y-T |
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multiplier |
1/ (1-mpc) OR change in Y/change in I |
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money supply = |
currency + deposits OR currency + (reserves/reserve-deposit ratio) |
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bank deposits = |
reserves / reserve deposit ratio |
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triangular arbitrage =
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(EUR/CAD)/(USD/CAD) = (EUR/USD)
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real exchange rate =
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(domestic price in $) / (foreign price/nominal exchange rate[$])
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compound growth =
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y(1+g)^n
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GDP/person =
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(y/pop) = (y/n *n/pop) = (y/hrs *hrs/worker*n/pop)
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new domestic price =
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world price + tariff
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tariff revenue
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imports * tariff
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Qd - Qs =
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imports
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Qs - Qd =
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exports
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disposable income (Y-T) =
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consumption + saving
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saving =
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current income - spending on current needs
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saving rate =
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saving / income
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wealth =
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assets - liabilities = net value
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gross saving =
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household saving + corporate saving + govt saving + non resident saving
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net saving =
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gross saving - capital consumption allowances (depreciation)
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national saving =
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household saving + corporate saving + govt saving
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non resident saving =
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net capital inflows
aka capital inflows - capital outflows |
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gross investment =
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private sector investment + govt investment
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total govt spending =
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G + transfers
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govt budget balance =
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revenue(taxes***) - spending (G+transfers***)
aka taxes - G - transfers |
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Current accounts =
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Goods and services balance (NX***) + investment income balance + transfers balance
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Net capital inflows (KI) =
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capital inflows - capital outflows
also = non resident saving |
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Current accounts + net capital inflows =
(CA + KI) = |
Zero
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gross saving =
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gross investment
or national saving + non resident saving |
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national saving + net capital inflows =
(S+KI) = |
Gross investment (GI)
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