equations mid 1 Flashcards
gdp expenditure
Y = C + G + I + X-M
gdp income approach
(wages, salaries, labour income) + OFI (rent, interest, profit) + dep + indirect taxes less subsides
real gdp
valued at the prices of a ref base year
price x quantity
nominal
precise name for real
current year prices
chained dollar
- each year gdp in that year prices (PxQ)
- one year quantity and other year price
- sub 2 - 1 / 1 x 100 to get % change - link to ref year???
labour force
employed + unemployed
unempliyment rate
unemployed / laour force x 100
involuntary part time rate
involuntary PT / labour force x100
labour force participation rate
labour force / working age pop x 100
employment rate
employed / working age pop x 100
natural employment
structural + fricitional
full employment
unemployement rate = nat unemployment
output gap
real GDP - potential GDP
CPI
CPI current year / CPI basee year (100) x 100
inflation rate
cpi this year - cpi last year / cpi last year x 100
GDP deflator
nominal gdp / real gdp x 100
growth rate / % change of real GDP
real gdp in current - real gdp in previous / previous x 100
real gdp/ perosn
real gdp / pop
rule of 70
70 / annual percent growtth rate of variable
real wage rate
money wage rate / price level
labour produtitvyt
real gdp / aggregate labour hours
net investment
gross investment - dep
interest rate
interest / price of asset
real int rate
nominal int rate - inflation rate
quantity of lonable funds demanded
= budget deficit
- rise in real int
- movement on curve
quantity of loanble funds supplied
= budgetv surplus
- rise in int rate increases supply
- movement on curve
crowding out effect
govrnment bud deficit to rasie the real int rate and increase investment
ricardo barro effect
gov budget has no effect on real int or investment
