AP MarcoEcon Equations

Question 1

Profit =

Answer 1

revenue - cost

Question 2

Output (OOO)

Answer 2

Other goes over

Question 3

Input (IOU)

Answer 3

Other goes Under*The variable is resources or time

Question 4

Per unit Opportunity Cost=

Answer 4

Opportunity cost/units gained

Question 5

Inflation Rate=

Answer 5

(New # - Old #/ Old #) x 100

Question 6

GDP Deflator=

Answer 6

(Nominal GDP/Real GDP) x 100

Question 7

Nominal GDP=

Answer 7

(Deflator)x(Real GDP)/100

Question 8

% Change in GDP=

Answer 8

(Year 2 - Year 1/Year 1) x 100

Question 9

GDP (Y)=

Answer 9

C+I+G+(X-M)
Consumer Spending + Investment Spending + Government Spending + (Exports - Imports)

Question 10

Unemployment Rate=

Answer 10

(# of unemployed/# of people in the labor force) x 100

Question 11

Consumer Price Index (CPI)=

Answer 11

(Price of market basket/Price of market in base year) x 100

Question 12

Marginal Propensity to Consume (MPC) =

Answer 12

Change in Consumption/Change in disposable income

Question 13

Marginal Propensity to Save (MPS) =

Answer 13

Change in Savings/Change in disposable income

Question 14

MPS =

Answer 14

1-MPC

Question 15

Spending Multiplier =

Answer 15

1/MPS or 1/(1-MPC)

Question 16

Total change in GDP =

Answer 16

Spending Multiplier x Initial change in Spending

Question 17

Simple Tax Multiplier =

Answer 17

MPC x (1/MPS) or MPC/MPS

Question 18

Total Change in GDP =

Answer 18

Tax Multiplier x Initial change in Taxes