econ formulas Flashcards
Economic Growth
Economic Growth Rate =
GDP in Current Period - GDP in Previous Period /
GDP in Previous Period × 100
- Measures the percentage change in real GDP over time.
Real GDP = Nominal GDP/Price Index (CPI) × 100
- Adjusts GDP for inflation using the Consumer Price Index (CPI).
Inflation Rate
Inflation Rate = CPI in Current Year - CPI in Previous Year / CPI in Previous Year × 100
- Measures the percentage change in the Consumer Price Index (CPI) from one period to the next.
Unemployment Rate
Unemployment Rate
= Number of Unemployed / Labor Force × 100
- Indicates the percentage of the labor force that is unemployed.
Labor Force Participation Rate
Labor Force Participation Rate
= LaborForce / Working-AgePopulation
× 100
- Measures the proportion of the working-age population that is part of the labor force
Balance of Payments (Current Account Balance)
Current Account Balance
= Exports - Imports + Net Income
+ Net Current Transfers
- Summarises a nation’s transactions with the rest of the world, including trade, income, and transfers.
Terms of Trade (ToT):
Terms of Trade =
Index of Export Prices / Index of Import Prices × 100
- Measures a country’s export prices relative to its import prices.
Price Elasticity of Demand (PED):
PED = % Change in QTY Demanded / % Change in Price
- Measures how responsive quantity demanded is to changes in price.
% change in $ = new price - old price / old price
Budget Deficit or Surplus:
Budget Balance = Government Revenue - Government Spending
- A positive balance is a surplus; a negative balance is a deficit.
Exchange Rate Change:
Exchange Rate Change
= New Exchange Rate - Old Exchange Rate / Old Exchange Rate × 100
- Measures the percentage change in the value of a currency relative to another.